When determining the functional currency,
A) if the sales prices for the foreign entity's products are generally not responsive on a short-term basis to exchange rate changes, but are determined more by local competition and government regulation, the local currency should be the functional currency.
B) if there is an active local market for the foreign entity's products the local currency should be the functional currency.
C) if factor of production costs for the foreign entity are primarily, and on a continuing basis, costs for components obtained from the parent's country the functional currency should be the home currency.
D) all of the above
Correct Answer:
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Q40: Under the current rate method,
A)income statement items
Q41: FASB 8 is essentially the
A)current/noncurrent method.
B)monetary/nonmonetary method.
C)temporal
Q44: In what year were U.S.MNCs mandated to
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A)The current rate method of
Q55: In implementing FASB 52,
A)the functional currency of
Q56: The "functional currency" is defined in FASB
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A)to
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