The Minimum Potential Transfer Price Is Determined by

question 2

Multiple Choice

The minimum potential transfer price is determined by

• A)incremental costs in the selling division.
• B)the lowest outside price for the good.
• C)the extent of idle capacity in the buying division.
• D)negotiations between the buying and selling division.

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Definitions:

Cost Principle

An accounting principle that states assets and services should be recorded at their original cost, not their current market value.

Accounting Records

Documents that record and summarize financial transactions and events in accordance with accounting standards and principles.

Ethical Violations

Breaches of moral principles or professional standards of conduct, often resulting in negative consequences.

Relevance

The importance of financial information in making economic decisions for users of accounting data.