The objective of transfer pricing is to encourage each division manager to transfer goods and services between divisions if overall company income can be increased by doing so.

Question

Quizplus · Accepted Answer

Transfer pricing is a method where goods and services are transferred between different divisions of the same company. The objective of this method is to encourage divisional managers to transfer goods and services if it will increase the overall income of the company. Therefore, the statement is true.

The Objective of Transfer Pricing Is to Encourage Each Division