Which of the Following Statements Is Not in Accordance with AASB

question 9

Multiple Choice

Which of the following statements is not in accordance with AASB 124 Related Party Disclosures?

• A) A related-party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged.
• B) If there have been transactions between related parties, an entity shall disclose the nature of the related party relationship as well as information about the transactions and outstanding balances necessary for an understanding of the potential effect of the relationship on the financial statements.
• C) Transactions between the reporting entity and its key management personnel are deemed material.
• D) In AASB 124 Related Party Disclosures, two entities having a director in common are assumed related parties.

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Definitions:

April

The month that comes fourth in the Gregorian calendar year.

Factory Overhead

All indirect costs, including indirect materials, labor, and expenses, incurred during the manufacturing process.

Machine Hours

A measure of production time or operation, referring to the total hours a machine is used or operates within a given period.

Overapplied Amount

This term refers to a situation where the allocated or applied costs in cost accounting exceed the actual costs incurred.