When determining the functional currency, Multiple Choice if the sales prices for the foreign entity's products are generally not responsive on a short-term basis to exchange rate changes, but are determined more by local competition and government regulation, the local currency should be the functional currency. if there is an active local market for the foreign entity's products the local currency should be the functional currency. if factor of production costs for the foreign entity are primarily, and on a continuing basis, costs for components obtained from the parent's country the function currency should be the home currency all of the options When using the currentoncurrent method, current assets are defined as Multiple Choice inventory that is currently salable. assets with a maturity of one year or less. assets with a maturity of 90 days or less. none of the options Under the current rate method Multiple Choice assets and liabilities should be translated based on their maturity. monetary accounts have a similarity because their value represents a sum of money whose currency equivalent after translation changes each time the exchange rate changes. monetary accounts are translated at the current exchange rate; other accounts are translated at the current exchange rate if they are carried on the books at current value; items carried at historical cost are translated at historic exchange rates. all balance sheet accounts are translated at the current exchange rate, except for stockholders' equity. A "plug" equity account, named cumulative translation adjustment (CTA), is used to make the balance sheet balance, since translation gains or losses do not go through the income statement according to this method