There are two broad categories of foreign currency issues that arise in financial reporting.They are:

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Accounting for foreign currency transactions involves recording transactions in a company's functional currency and then converting them to the reporting currency at the exchange rate at the time of the transaction. Translating the accounts of foreign subsidiaries involves converting their financial statements from their functional currency to the reporting currency. These are the two broad categories of foreign currency issues that arise in financial reporting. The other choices are not accurate categorizations of foreign currency issues in financial reporting.

There Are Two Broad Categories of Foreign Currency Issues That