Suppose in Order to Defraud the Shareholders,a Manager Sets Up

question 21

Multiple Choice

Suppose in order to defraud the shareholders,a manager sets up an independent company that he owns and sells the main company's output to this company.He would be tempted to set the transfer price

• A)below market prices.
• B)above market prices.
• C)at the market price.
• D)in accordance with GAAP.

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Definitions:

Gold Standard

An economic system in which the value of a country’s paper currency is directly connected to gold.

Japan

An island country located in East Asia, known for its advanced technology, distinctive culture, and significant economic influence globally.

Trade Surpluses

Occurs when a country's exports exceed its imports over a given period, indicating a net inflow of domestic currency from foreign markets.

Productivity Rate

Measures the efficiency of production in an economy, often calculated as total output per unit of input, such as labor, over a specific period of time.