Using the Comparable Profits Method of Transfer Pricing, the Transfer

question 51

Multiple Choice

Using the comparable profits method of transfer pricing, the transfer price is determined by:

• A) referring to an objective measure of profitability earned by uncontrolled taxpayers on comparable, uncontrolled sales.
• B) adding a standard profit margin to the operating expenses of the buying division.
• C) dividing a reasonable amount of profit between the selling and buying divisions.
• D) comparing the normal profits of the selling and buying divisions and basing the price on the highest margin.

---

Definitions:

Sensory Memory

The shortest-term element of memory, it is the ability to retain impressions of sensory information after the original stimuli have ended, acting as a buffer for incoming sensory information.

Long-Term Memory

A type of storage in the brain capable of holding information for long periods, from hours to a lifetime.

Primary Memory

Also known as short-term memory, it is the component of the mind responsible for the transient holding of information.

Long-Term Memory

The stage of the memory process that is capable of storing information for extended periods, from hours to a lifetime.