If a Product Has an External Market and Divisions Are

question 37

True/False

If a product has an external market and divisions are treated as profit centres, cost-based transfer prices can often lead to suboptimal decisions.

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Definitions:

Bank Statement

A summary of financial transactions which have occurred over a given period on a bank account held by a person or business with a financial institution.

Deposits

Funds placed into a bank account or with some other entity for safekeeping, which can include money put in savings or checking accounts.

Electronic Funds Transfers

The electronic transfer of money between accounts by consumer electronic systems rather than the exchange of cash, checks, or other paper documents.

Internal Control Of Cash

Procedures and measures implemented by a business to monitor, manage, and protect its cash transactions and holdings.