The Term Transfer Price Refers To

question 48

Multiple Choice

The term transfer price refers to:

• A)the price at which a product or service is sold to a government entity.
• B)the price at which a product or service is sold by one segment to another related segment.
• C)the price at which a product or service is sold by a segment to an outside party.
• D)None of the answers are correct.

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Definitions:

Allowance for Doubtful Accounts

A financial accounting provision representing the estimated amount of receivables that may not be collected.

Receivables

Amounts owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects on its credit sales by dividing total credit sales by the average accounts receivable.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.