Which of the following is an incorrect description of transfer pricing?
A) It measures the value of goods or services furnished by a profit center to other responsibility centers within a company.
B) If a market price exists, this price may be used as a transfer price.
C) It measures exchanges between a company and external customers.
D) If no market price exists, the transfer price may be based on cost.

Question

Quizplus · Accepted Answer

Transfer pricing refers to the pricing of goods, services, and intangibles between related parties within an organization, not exchanges between a company and external customers.

Which of the Following Is an Incorrect Description of Transfer