A General Principle of Disclosure Is That Material Related-Party Transactions

question 63

Multiple Choice

A general principle of disclosure is that material related-party transactions should be disclosed.As the auditor of the Clarence Company,you have noted the following transactions entered into by Clarence during the past fiscal year:
I.Clarence borrowed $1,000,000 from the Southwest Bank issuing a noninterest-bearing note.
II.Clarence borrowed $2,000,000 from BH Savings at a rate significantly above the market rate prevailing at that time for such a borrowing.
III.Clarence borrowed $500,000 from First Bank with no scheduled terms for how or when funds will be repaid.
Assuming all of the above transactions are material,which transaction or transactions above most likely would be a related party transaction requiring disclosure in Clarence's financial statements?

• A)Only I above.
• B)Both II and III above.
• C)Both I and III above.
• D)Only III above.

Understand cognitive and intellectual changes from middle to late adulthood and factors influencing cognitive retention.

Describe Erik Erikson's stages of psychosocial development relevant to young children.

Identify and describe Diana Baumrind's primary dimensions of parenting and the four parenting styles.

Differentiate between cross-sectional, longitudinal, and sequential designs, and their application in studying changes in marital satisfaction with age.

---

Definitions:

Argument

A sequence of statements or reasoning aimed to demonstrate a position as true or logically sound.

Explanandum

Explanandum is the phenomenon or event that is being explained in a scientific or philosophical context.

Hypothesis

An educated guess or proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Explanation

A proclamation or summary that illuminates by delving into more specific details or presenting important facts or notions.