Which statement is true concerning a dual transfer pricing system?
A)It provides the selling division with a profit but charges the buying division with costs.
B)It provides the buying division with a profit but charges the selling division with costs.
C)It is required by generally accepted accounting principles.
D)None of the answers is correct.

Question

Quizplus · Accepted Answer

A dual transfer pricing system allows the selling division to record a profit by setting a transfer price above cost, while the buying division records the transfer at cost, thus not affecting its profit.

Which Statement Is True Concerning a Dual Transfer Pricing System