You are an auditor. ABC Philippines Co., your client, is not sure on what to disclose in its financial statements as its functional currency. Relevant information follows: ABC Philippines Co. is a branch of ABC U.S. Co. ABC Philippines operates in a Philippine Economic Zone Authority (PEZA) Special Economic Zone. ABC Philippines is engaged in the apparel business. All of its raw materials are imported from the main office in the U.S. and all of its finished products are exported directly to U.s. customers. The U.S. customers remit payments to the U.S. main office. The U.S. main office will then provide the Philippine branch its working capital needs. None of ABC Philippines Sos' finished products are sold in the Philippines. The raw materials imported and finished goods exported are denominated in U.S. dollars.
You are an auditor. ABC Philippines Co., your client, is not sure on what to disclose in its financial statements as its functional currency. Relevant information follows: ABC Philippines Co. is a branch of ABC U.S. Co. ABC Philippines operates in a Philippine Economic Zone Authority (PEZA) Special Economic Zone. ABC Philippines is engaged in the apparel business. All of its raw materials are imported from the main office in the U.S. and all of its finished products are exported directly to U.s. customers. The U.S. customers remit payments to the U.S. main office. The U.S. main office will then provide the Philippine branch its working capital needs. None of ABC Philippines Sos' finished products are sold in the Philippines. The raw materials imported and finished goods exported are denominated in U.S. dollars.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
What is ABC Philippines Co.’s functional currency?
A. none of the choices given
B. Philippine peso
C. Either Philippine Peso or U.S dollar
D.U.S. dollar

Transcribed Image Text:You are an auditor. ABC Philippines Co., your client, is not sure on what
to disclose in its financial statements as its functional currency. Relevant
information follows:
ABC Philippines Co. is a branch of ABC U.S. Co. ABC Philippines operates in
a Philippine Economic Zone Authority (PEZA) Special Economic Zone.
Philippines is engaged in the apparel business. All of its raw materials
are imported from the main office in the U.S. and all of its finished
products are exported directly to U.s. customers. The U.S. customers remit
payments to the U.S. main office. The U.S. main office will then provide
the Philippine branch its working capital needs. None of ABC Philippines
Ses finished products are sold in the Philippines. The
imported and finished goods exported are denominated in U.S. dollars.
ABC
raw materials
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