For a company that has A$ as its functional currency, which of the following is not a foreign currency transaction?
A) goods sold at prices denominated in UK pounds
B) equipment sold at prices denominated in Japanese Yen.
C) inventory sold to a customer in Hong Kong who pays in A$.
D) borrowing funds where amounts are payable in NZ$.

Question

Quizplus · Accepted Answer

Since A$ is the functional currency of the company, any transaction involving A$ is not considered a foreign currency transaction. Therefore, option C (selling inventory to a customer in Hong Kong who pays in A$) is not a foreign currency transaction. Options A, B, and D involve currency other than the functional currency of the company and are considered foreign currency transactions.

For a Company That Has A$ as Its Functional Currency