COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Determining the comparison is done before determining the function of assets and risks
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Determining the transfer method is done after determining the comparator
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Determining the transfer method is carried out before the analysis of functions, assets and risks
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Determining the comparison is done after determining the transfer method
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Detailed explanation-1: -Horizontal analysis is used in the review of a company’s financial statements over multiple periods. It is usually depicted as percentage growth over the same line item in the base year.
Detailed explanation-2: -What Is the Direct Method? The direct method is one of two accounting treatments used to generate a cash flow statement. The statement of cash flows direct method uses actual cash inflows and outflows from the company’s operations, instead of modifying the operating section from accrual accounting to a cash basis.
Detailed explanation-3: -Under ASC 820, fair value is based on the exit price (the price that would be received to sell an asset or paid to transfer a liability), not the transaction price or entry price (the price that was paid for the asset or that was received to assume the liability).
Detailed explanation-4: -A cash flow statement sets out a business’s cash flows from its operating activities, its financing activities, and its investment activities. An income statement provides users with a business’s revenues and gains, as well as expenses and losses, over a specific period of time.