Which of the following is an indication that the functional currency of a foreign subsidiary is not the Canadian dollar?
A) Only goods imported from the parent are sold by the subsidiary.
B) The parent dictates the subsidiary's operating procedures.
C) Cash to pay obligations is generated by local operations or borrowed from local lenders.
D)Intercompany transactions account for a high proportion of the subsidiary's overall activities.

Question

Quizplus · Accepted Answer

If the cash to pay obligations is generated locally or borrowed from local lenders, it suggests that the subsidiary is operating in a currency other than the parent's functional currency.

Which of the Following Is an Indication That the Functional