Under IAS 21, Which of the Following Is NOT a Factor

question 13

Multiple Choice

Under IAS 21, which of the following is NOT a factor in determining functional currency?

• A) It is the currency that influences sales prices for goods and services.
• B) It is the currency that mainly influences labor, material and other costs of providing goods and services.
• C) It is the currency least likely to experience hyperinflation.
• D) It is the currency in which funds from financing activities are generated.

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Definitions:

Stock Price

The cost of purchasing a single share of a particular stock on the stock market.

Levered Firm

A company that utilizes debt financing as a significant portion of its capital structure.

Indirect Bankruptcy Costs

Expenses related to bankruptcy that are not direct costs such as legal and administrative fees, including damage to corporate reputation and loss of business opportunities.