Which of the following statements accurately describes the concept of "Functional Currency" in accounting for foreign exchange transactions? A) Functional currency is the currency used by a company's management for internal accounting and reporting purposes. 3) Functional currency is the currency in which a foreign subsidiary's financial statements are prepared and presented to its local regulatory authorities. C) Functional currency is the currency of the country where a company's headquarters are ocated and where the majority of its transactions take place. D) Functional currency is the currency in which a company's largest foreign customer conducts its business transactions.
Which of the following statements accurately describes the concept of "Functional Currency" in accounting for foreign exchange transactions? A) Functional currency is the currency used by a company's management for internal accounting and reporting purposes. 3) Functional currency is the currency in which a foreign subsidiary's financial statements are prepared and presented to its local regulatory authorities. C) Functional currency is the currency of the country where a company's headquarters are ocated and where the majority of its transactions take place. D) Functional currency is the currency in which a company's largest foreign customer conducts its business transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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This is Accounting MCQ i want answer and explanation why it's correct and another incorrect
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Transcribed Image Text:Which of the following statements accurately describes the concept of "Functional
Currency" in accounting for foreign exchange transactions?
A) Functional currency is the currency used by a company's management for internal
accounting and reporting purposes.
B) Functional currency is the currency in which a foreign subsidiary's financial statements
are prepared and presented to its local regulatory authorities.
C) Functional currency is the currency of the country where a company's headquarters are
located and where the majority of its transactions take place.
D) Functional currency is the currency in which a company's largest foreign customer
conducts its business transactions.
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