Determined primarily by? The functional currency of a foreignoperation is determined primarily by ?a) The parent company's currencyb) The currency that mainly influences salespricesc) The reporting currencyd) The local country's currency

The functional currency is the currency of the primary economic environment in which a company…

Answered: The functional currency of a foreign…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

ChapterP3: Part 3: Exchange Rate Risk Management

Section: Chapter Questions

Problem 1Q

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Explain the concepts of Local Currency, Functional Currency and Presentation Currency with suitable examples Explain the rule for translating the Financial Statements of Foreign Operations from Local Currency to Functional Currency
Describe the functional currency concept and briefly describe how a foreign entity’s functional currency Is determined.
which shall be recognized for each item when foreign currency gain or loss that arises from translation of foreign currency denominated transaction to functional currency? a. inventiry b. interest expense c. accounts receivable d. unearned revenue
What are the consequences of accounting for foreign currency translation on financial statement analysis?
what are implications for analysis of financial statements that result from the accounting for foreign currency translation?
Which of the following suggests that the foreign entity's functional currency is the parent's currency? a. Intercompany transaction volume is low. b. Debt is serviced through local operations. c. There is an active and primarily local market. d. Sale prices are influenced by international factors.
A). Why do we need to translate the financial statement of foreign operations? B). Explain the concepts of local currency, functional currency and presentation, orrency with example. K C). How is the profit or loss from translating foreign operations' financial statements from local currency to functional currency treated? D) How are the profit and loss from translating foreign ope ions' financial statements from functional currency to presentation currency treated?
Select the correct definition of indirect exchange rate. O Foreign currency per unit of domestic currency. Domestic currency per unit of foreign currency.
Please answer it if is TRUE or FALSE.
If the functional currency is determined to not be the foreign entity's local currency, translation is done using a. the current rate method b. the functional method c. the remeasurement method d. the derivative method
Assuming that the functional currency of a foreign subsidiary is the local currency, which of the following accounts would be translated at the current rate on the Balance Sheet date (B/S Rate)? a.Additional Paid-In Capital b.Cost of Goods Sold c.Retained Earnings d.Allowance for Doubtful Accounts
The factors used to convert from one country's currency to another country's currency is called Select one: a. Strike price b. Exchange rate c. Cost of capital d. Price translation Next pa Previous page

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The functional currency of a foreign operation is determined primarily by ? a) The parent company's currency b) The currency that mainly influences sales prices c) The reporting currency d) The local country's currency