When It Is Not Clear What the Functional Currency Is

question 7

Multiple Choice

When it is not clear what the functional currency is, an accountant must use professional judgment to choose the functional currency. What is the main criterion upon which the choice should be based?

• A)Whether it faithfully represents the accounting effects of the transactions and events
• B)Whether it faithfully represents the economic effects of the transactions and events
• C)Whether it faithfully represents the translation effects of the transactions and events
• D)Degree to which it minimizes accounting exposure

Understand the concept and implications of minimum efficient scale.

Identify the point at which diseconomies of scale set in for a firm.

Distinguish between economies and diseconomies of scale.

Interpret the effects of input increases on average and marginal costs.

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Definitions:

Works Councils

Employee representative bodies within a company, primarily in European countries, that participate in discussing and negotiating workplace matters.

Job Rotation

A workplace strategy involving regularly moving employees between different jobs or tasks to diversify their skills and prevent job boredom.

Seniority Based Pay

A compensation system where employees' wages are determined by the length of service in a company or organization.

Enterprise Unionism

A form of unionism in which workers organize into unions on a per-company basis, rather than by trade or industry.