The "Floor" in Transfer Pricing Is

question 129

Multiple Choice

The "floor" in transfer pricing is

• A)the transfer price that would leave the buying division no worse off if an input is purchased from an internal division.
• B)the transfer price that would leave the selling division no worse off if the good is sold to an internal division.
• C)the transfer price that would leave the buying division worse off if an input is purchased from an internal division.
• D)none of these.

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Definitions:

Accounts Payable

Represents a company's obligation to pay off a short-term debt to its creditors or suppliers.