In order to identify the foreign exchange component of a transaction, a company must establish the currency in which its books and records should be maintained.

Question

Quizplus · Accepted Answer

Keeping accurate records in a particular currency is essential for identifying the foreign exchange component of a transaction, as it allows for the calculation of exchange rate variability and any resulting gains or losses. Therefore, a company must establish the currency in which it will maintain its books and records.

In Order to Identify the Foreign Exchange Component of a Transaction