What Do IASB Standards Say About Related Party Transactions

question 32

Multiple Choice

What do IASB standards say about related party transactions?

• A)They are illegal in most countries and must be avoided.
• B)Related party transactions should be eliminated from the financial statements.
• C)They must be disclosed in the notes to the financial statements.
• D)none of the above

Understand how to construct and interpret common size financial statements.

Understand the concept of trend analysis using base years in financial statements.

Learn the breakdown and components of Return on Assets (ROA).

Calculate and interpret ratios related to balance sheet items (e.g., long-term liabilities, accounts receivable).

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Definitions:

Modus Tollens (MT)

A form of logical argument where the denial of the consequent leads to the denial of the antecedent.

Simplification (Simp)

A logical operation that breaks down complex arguments or propositions into simpler components.

Modus Ponens (MP)

A form of valid argument in deductive logic that, if a given premise is true ('if P then Q'), and the antecedent (P) is also true, then the consequent (Q) must be true.

Universal Generalization (UG)

A principle in logic where a statement applies to all members of a category or class.