One of the first steps in translating the financial statements of a foreign subsidiary is the identification of the functional currency of that entity. Which of the following indicates that the...

One of the first steps in translating the financial statements of a foreign subsidiary is the identification of the functional currency of that entity. Which of the following indicates that the functional currency is the local currency of the foreign entity?

(a) There is a high volume of intercompany transactions.

(b) Financing is primarily denominated in the local currency.

(c) Sales are mostly in the United States, or sales contracts are denominated in dollars.

(d) Sales prices are primarily responsive in the short term to exchange rate changes.