Because the Full-Cost Method of Transfer Pricing Includes Fixed Cost,it

question 108

Multiple Choice

Because the full-cost method of transfer pricing includes fixed cost,it can:

• A)Pass strict accounting requirements for determining transfer prices.
• B)Pass strict governmental requirements for determining transfer prices.
• C)Establish consistency across state and national borders.
• D)Violate OECD agreements.
• E)Cause sub-optimal short-term decision making.

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Definitions:

Highly Liquid Investments

Investments that can be quickly converted into cash without a significant loss in value.

Specific Amount

A precise quantity or financial figure identified within a transaction or financial statement, not generalized or estimated.

Deposit Ticket

This is a document that accompanies a bank deposit, listing the amounts of cash and checks being deposited and their respective details.

Negotiable Instrument

A document guaranteeing the payment of a specified amount of money, either on demand or at a set time, with the payer specified on the document.