COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Determination of Transfer Pricing or Transfer Pricing is the determination of prices in Transactions that are influenced by a special relationship
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Transfer Pricing or Transfer Pricing is the application of prices in transactions that are affected by a special relationship
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Transfer Pricing or Transfer Pricing is the determination of profits in Transactions that are affected by a special relationship
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Transfer Pricing or Transfer Pricing is pricing in affiliated Transactions
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Detailed explanation-1: -Transfer pricing is an accounting and taxation practice that allows for pricing transactions internally within businesses and between subsidiaries that operate under common control or ownership. The transfer pricing practice extends to cross-border transactions as well as domestic ones.
Detailed explanation-2: -The Comparable Profits Method This net profit is then compared to the net profits in comparable uncontrolled transactions of independent enterprises. The CPM is the most commonly used and broadly applicable type of transfer pricing methodology.
Detailed explanation-3: -Transactional net margin method (TNMM) The TNMM is one of two transactional profit methods outlined by the OECD for determining transfer pricing. These types of methods assess the profits from particular controlled transactions.