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Functional currency is the currency that influences sales price, labour, material and other costs of a companys goods and services. (a) Explain factors that should

Functional currency is the currency that influences sales price, labour, material and other costs of a companys goods and services. (a) Explain factors that should also be considered to determine the functional currency of a foreign operation.

(b) Explain what will happen if a business transaction is denominated in foreign currency but reported in functional currency.

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