Transactions with and Amounts Receivable from or Payable to a Key

question 27

Multiple Choice

Transactions with and amounts receivable from or payable to a key management person and their related parties are excluded from additional disclosures when:

• A) The transactions occur within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with an unrelated person.
• B) The information about them does not have a potential to affect adversely decisions about the allocation of scarce resources made by the users of the financial report, or the discharge if accountability by the key management person.
• C) These are trivial or domestic in nature.
• D) All of the given answers.
• E) The transactions occur within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with an unrelated person and the information about them does not have a potential to affect adversely decisions about the allocation of scarce resources made by the users of the financial report, or the discharge if accountability by the key management person.

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Definitions:

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjusting entries have been made, verifying the equality of debits and credits.

Error Detection

The process of identifying inaccuracies, inconsistencies, or mistakes in financial information or accounting records.

Income Statements

Financial statements detailing a company's revenues, expenses, and profits over a specific period, highlighting operational performance.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, serving as a check that the total debits equal the total credits before financial statements are prepared.