Which of the following defines a foreign-based entity that uses a functional currency different from the local currency?
I.A U.S.subsidiary in Britain maintains its accounting records in pounds sterling,with the majority of its transactions denominated in pounds sterling.
II.A U.S.subsidiary in Peru conducts virtually all of its business in Latin America,and uses the U.S.dollar as its major currency.
A) I.
B) II.
C) Both I and II.
D) Neither I nor II.

Question

Quizplus · Accepted Answer

A foreign-based entity that uses a functional currency different from the local currency is one that conducts its business primarily in a currency other than the local currency. In option II, the U.S. subsidiary in Peru uses the U.S. dollar as its major currency, which is different from the local currency (Peruvian sol), fitting the definition.

Which of the Following Defines a Foreign-Based Entity That Uses