Regarding Related-Party Transactions

question 52

Multiple Choice

Regarding related-party transactions,

• A) transactions between related parties are usually presumed to take place at arms length.
• B) related parties do not include members of the immediate family of company management.
• C) both IFRS and ASPE deal only with disclosure requirements for such transactions.
• D) ASPE requires that some related-party transactions be remeasured.

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Definitions:

Income Statement Accounts

Accounts that reflect income, expenses, gains, and losses, which are used to determine the net income of a business.

Deferred Revenue

Income received by a company for products or services yet to be delivered or completed, considered a liability until the revenue is earned.

Unearned Rent

Income received by a property owner for which the services (use of property) have not yet been provided.

Expense Accounts

Accounts used to track money spent or costs incurred in a business's operational activities.