According to AASB 121 the Effects of Changes in Foreign

question 16

Multiple Choice

According to AASB 121 The Effects of Changes in Foreign Exchange Rates, the currency in which an entity primarily generates and expends cash is considered to be the:

• A) economic currency.
• B) domestic currency.
• C) presentation currency.
• D) functional currency.

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Definitions:

Creative Destruction

A concept in economics introduced by Joseph Schumpeter, referring to the process where outdated or obsolete products, services, and technologies are replaced by innovative and more efficient ones, driving economic progress.

Destroyed Industries

Sectors or markets that have suffered severe disruption or collapse, often due to technological changes, market shifts, or external disruptions.

Purely Competitive Industries

Industries in which numerous small firms compete against each other, selling identical or very similar products, and where no single firm can influence market prices.

Innovate

The process of creating new ideas, products, or methods, often resulting in improved efficiency, effectiveness, or competitive advantage.