For a Reporting Entity That Has Participated in Related-Party Transactions

question 15

Multiple Choice

For a reporting entity that has participated in related-party transactions that are material, disclosure in the financial report should include:

• A) the nature of the relationship and the terms and manner of settlement.
• B) details of the transactions within major classifications.
• C) a statement to the effect that a transaction was consummated on terms no less favourable than those that would have been obtained if the transaction had been with an unrelated party.
• D) a reference to deficiencies in the entity's internal control.

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Definitions:

Non Oil

Pertaining to economic sectors or industries that are not related to the extraction or processing of oil.

Corporation

A legal entity that is separate and distinct from its owners, capable of conducting business, entering into contracts, and owning assets.

Inventory Investment

The purchase of goods and materials for future sale or use, representing a business investment in stock.

Proprietorships

The simplest form of business organization owned by a single person, responsible for all the business’s operations and liabilities.