A factor pointing toward the use of the foreign currency as the functional currency is the foreign unit selling its products locally rather than in the United States.

Question

Quizplus · Accepted Answer

The use of the foreign currency as the functional currency is more appropriate when the foreign unit conducts its business and sells its products primarily in the local market rather than in the United States, as this indicates that the foreign unit's economic environment is primarily denominated in the local currency.

A Factor Pointing Toward the Use of the Foreign Currency