Transfer prices are the amounts charged by one segment of an organization for a product or service that it supplies to another segment of the same organization.

Question

Quizplus · Accepted Answer

This statement is true. Transfer prices are used to measure the performance of each segment, and to ensure that each segment is charged at a fair market value for the goods or services that it receives from other segments within the organization.

Transfer Prices Are the Amounts Charged by One Segment of an Organization