Assume the functional currency of a foreign entity is the U.S.dollar,but the books are kept in euros.The objective of remeasurement of a foreign entity's accounts is to
A)produce the same results as if the foreign entity's books were maintained in the currency of the largest customer.
B)produce the same results as if the foreign entity's books were maintained solely in the local currency.
C)produce the same results as if the foreign entity's books were maintained solely in the U.S.dollar.
D)produce the results reflective of the foreign entity's economics in the local currency.

Question

Quizplus · Accepted Answer

The objective of remeasurement is to produce the same results as if the foreign entity's books were maintained solely in the U.S. dollar, which is the functional currency. This is because the U.S. dollar is considered the reporting currency of the parent company or the parent country, and the financial statements are prepared in this currency. Remeasurement ensures that the financial statements reflect the economic reality of the foreign entity in the functional currency of the parent company.

Assume the Functional Currency of a Foreign Entity Is the U.S.dollar,but