The Greatest Advantage of Using a Negotiated Transfer Price Is

question 112

Multiple Choice

The greatest advantage of using a negotiated transfer price is:

• A) It is generally the most efficient method of determining transfer prices.
• B) This may be the most practical approach when conflicts exist between selling and buying divisions.
• C) The method produces transfer prices that are acceptable under international financial reporting standards.
• D) Tax problems are avoided because the method is considered "arm's-length."
• E) It is required for federal income tax purposes.

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