BKAR5033_Int Transfer Pricing

Q1. Which of the following objectives is not achieved through the use of lower transfer prices?

• Improving the competitive position of a foreign operation.

• Minimizing import duties.

• Protecting foreign currency cash flows from currency devaluation.

• Minimizing income taxes when transferring to a lower-tax country.

Q2. Which international organization has developed transfer pricing guidelines that are used as the basis

for transfer pricing laws in several countries

• World Bank.

• Organization for Economic Cooperation and Development.

• United Nations.

• International Accounting Standards Board.

Q3. Which one of the following types of intercompany transactions is most likely to be audited?

• Sales of tangible property

• Licenses of intangible property

• Intercompany loans

• Intercompany services

Q4. Which of the following is not a method commonly used for establishing transfer prices?

• Cost-based transfer price

• Negotiated price

• Market-based transfer price

• Industrywide transfer price.

Q5. U.S. Treasury Regulations require the use of one of five specified methods to determine the arm’s

length price in a sale of tangible property. Which of the following is not one of those methods?

• Cost-plus method.

• Market-based method.

• Profit split method.

• Resale price method.

Q6. The greatest number of advance pricing agreements have been negotiated with the IRS for which type of intercompany transaction?

• Sales of tangible property

• Licenses of intangible property

• Intercompany loans

• Intercompany services