Hi
Accounting currency (i.e., functional currency) is the currency in which a company transact its business. In normal scenario it is the country's main currency. In certain cases, it can be functional currency of the parent company even thought the main currency of the country is different. From an AX perspective, all financial transactions (in transaction currency) posted in company will be converted into accounting currency using the exchange rate in exchange rate master. If the transaction currency is same as that of functional currency, the exchange rate will be set as 'one'.