Transfers Between Divisions Located in Countries with Different Tax Rates

question 34

Multiple Choice

Transfers between divisions located in countries with different tax rates

• A)simplify the determination of the appropriate transfer price.
• B)are decreasing in number as more companies "localize" operations.
• C)encourage companies to report more income in countries with low tax rates.
• D)all of these are correct.

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Definitions:

Selling

Expenses incurred directly and indirectly in making sales, including advertising, sales commissions, and the cost of sales personnel.

Administrative Expenses

Overhead or indirect costs related to the general operation of a company, such as office supplies, legal fees, and management salaries.

Planning Budget

A financial plan that estimates the revenues and expenditures for a certain period of time in advance.

Personnel Expenses

Costs associated with employing staff, including salaries, benefits, training, and taxes.