LEGALITY OF PRICING POLICIES (copy)

Question 1

Are those set for goods or services which are bought by one division of a firm from another division.

Accepted Answer

TRANSFER PRICES

Question 2

Resale price method is often used.

Accepted Answer

FALSE

Question 3

It takes the price at which an associated enterprise sells a product to a third party.

Accepted Answer

RESALE PRICE

Question 4

Traditional transaction methods rely on actual transactions.

Accepted Answer

TRUE

Question 5

Compares the terms and conditions (including the price) of a controlled transaction to those of a third party transaction.

Accepted Answer

COMPARABLE UNCONTROLLED PRICE

Question 6

Resale Price Method is also known as the Resale Minus Method.

Accepted Answer

TRUE

Question 7

Transaction between the taxpayer and an independent enterprise.

Accepted Answer

INTERNAL CUP

Question 8

There are six transfer pricing methods that may be used to examine the arms length nature of controlled transactions.

Accepted Answer

FALSE

Question 9

These methods measure the net operating profits realized from controlled transactions and compare that profit level to  the profit level realized by independent enterprises.

Accepted Answer

TRANSACTIONAL PROFIT METHODS

Question 10

Are used to calculate or test the arm‘s length nature of prices or profits.

Accepted Answer

TRANSFER PRICING METHODS