Question

A company from the United Kingdom uses British pounds in its normal operations, reports in the European Union in euros, and reports in the United States in U.S. dollars. The company is owned by a private equity firm in Japan. What is the company's functional currency? (AICPA 2018)

A. The Euro.
B. The British pound.
C. The U.S. dollar.
D. The Japanese yen.

Answer 1

B. The British pound.

Step-by-step explanation:

The functional currency is the principal currency used by a company in the environment in which it operates. According to this definition, the functional currency of this company is the British Pound because the firm is from the United Kingdom and the British Pound is the currency that is used in its operations.