Which of the Following Factors Is a Primary Indicator Used

question 39

Multiple Choice

Which of the following factors is a primary indicator used to choose a functional currency?

• A)Autonomy of the subsidiary
• B)Proportion of intercompany transactions
• C)Sources of competitive forces and regulations
• D)Ability of subsidiary to generate cash flows to service its debts

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Definitions:

Direct Materials

The raw materials directly used in the manufacturing of a product, easily traceable to the finished good.

Product

An item or service created through a process and offered in the market to satisfy consumer needs or wants.

Advertising Expense

Costs incurred in promoting products or services, classified under operating expenses in the income statement.

Period Cost

Expenses that are not directly tied to the production of goods or services, such as sales, administrative, and other operating expenses.