Which of the Following Statements Relating to a Functional Currency

Which of the following statements relating to a functional currency is FALSE?

A) Functional currency is determined on an entity by entity basis
B) Functional currency is a reflection of the primary economic environment in which an entity operates.
C) The primary economic environment is the one in which an entity primarily generates and expends cash.
D) In order to determine what is considered to be a "functional currency," it is imperative that a "foreign currency" be first identified.