How can transfer pricing be used to shift income around the world?
What will be an ideal response?
Setting a low transfer price increases the income of the affiliate that is purchasing the good because it lowers the cost of the good. The affiliate that is selling the good has lower revenue and hence lower income. Setting a high transfer price decreases the income of the affiliate that is purchasing the good because it increases the cost of the good. The affiliate that is selling the good has higher revenue and hence higher income.
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Tavella Company applies the consistency convention. What does this mean?
a. Tavella Co. uses the same names for all its expenses as its competitors. b. Tavella Co. has selected certain accounting principles that can never be changed. c. Tavella Co. applies the same accounting principles each accounting period. d. Tavella Co. applies the same accounting principles as it competitors.
Most people will obey the orders of a person wearing a uniform, even if there is no war or apparent emergency. This is an effect of the principle of ________.
Fill in the blank(s) with the appropriate word(s).
According to the sources of meaningful work articulated by Lips-Wiersma and Morris, how does the source “unity with others” differ from “serving with others”?
a. It emphasizes impact on humanity. b. It involves a sense of belonging, such as with coworkers. c. It is more related to personal growth. d. It is more concerned with making a difference in the lives of others.
Capital expenditures are costs that are charged to Stockholders' Equity accounts
Indicate whether the statement is true or false