1. For reporting purposes, currencies are defined as Operating, International and presentation Domestic and international Foreign, functional and presentation International and functional
1. For reporting purposes, currencies are defined as
Operating, International and presentation
Domestic and international
Foreign, functional and presentation
International and functional
2. The functional currency is
Currency in which the entity reports earnings.
The currency in which the entity primarily operates.
The currency in which the entity presents the financial statements.
The currency in which the entity primarily conducts banking activities
3. Which consideration would not be relevant in determining the entity's functional currency?
The currency in which receipts from operating activities are retained.
The currency in which finance or fund is generated
The currency that influences the cost of the entity.
The currency that the most internationally acceptable for trading
4. Under IFRS, how is presentation currency defined?
The currency in which the financial statements are presented.
The currency that uses the current rate
The currency of the primary environment in which the entity operates.
A currency other than the functional currency
5. Foreign operations that are an integral part of the operations of the entity would have the same functional currency as the entity. Where a foreign operation functions independently from the parent, the functional currency will be:
That of the country of incorporation.
That of the parent.
The same as the presentation currency
Determined using the guidance for determining an entity's functional currency
6. What is the initial measurement of foreign currency transaction?
Closing rate for both monetary items and nonmonetary items.
Historical rate for monetary items and closing rate for nonmonetary items
Historical rate for both monetary item and nonmonetary items.
Historical rate for nonmonetary items and closing rate for monetary items.
7. What is the subsequent measurement of foreign currency denominated monetary items
Closing rate
Average rate
Historical rate
Opening rate
8. What is the subsequent measurement of foreign currency denominated nonmonetary items?
Average rate
Closing rate
Opening rate
Historical rate
9. IAS 21 provides that exchange differences/(gain/loss) arising on the settlement or remeasuring foreign currency transaction shall be recognized in
Share premium
Profit or loss
Other comprehensive income
10. Which of the following items will result to foreign currency transaction gain/loss due to settlement or remeasurement?
Foreign currency denominated non-monetary liabilities such as unearned revenue, warranty liability, premium
Foreign currency denominated non-monetary assets such as inventory, PPE, intangible asset or prepaid asset.
Foreign currency denominated monetary items such as accounts payable,
Foreign currency denominated income statement accounts such as revenue, income, expense or loss.
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