Which of the following defines a foreign-based entity that uses a functional currency different from the recording currency? I. A U.S. subsidiary in Britain maintains its accounting records in pounds sterling, with the majority of its transactions denominated in pounds sterling. II. A U.S. subsidiary in Peru conducts virtually all of its business in Latin America, records transactions in the respective local currencies, and uses the U.S. dollar as its major currency. 

A. Both I and II.
B. II.
C. I.
D. Neither I nor II.


Answer: B

Business

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