1. The currency in which an international subsidiary's parent presents its consolidated financial statements is its A. Currency of the country where the parent is incorporated. B. Local currency. C. Functional currency. D. Reporting currency.

The correct answer is letter "C": Functional currency.

Explanation:

Functional currency is the monetary medium of exchange a company usually generates and expends money with. Functional currency represents the primary currency a firm uses for its operations which is likely to be the official currency of the region where it handles business but that does not always happen.

For book-keeping purposes, a subsidiary's parent uses the functional currency of their operational functional environment.