Which of the Following Transactions Is Considered a Related-Party Transaction

question 14

Multiple Choice

Which of the following transactions is considered a related-party transaction?

• A) Borrowing funds from the pension fund maintained by the company.
• B) Transferring monies to a subsidiary.
• C) Selling inventory to a parent.
• D) All of the above.

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Definitions:

Certainty Effect

The tendency for people to give greater weight to outcomes that are certain, compared to outcomes that are probable, often observed in decision-making under uncertainty.

Definite Outcomes

A term used to describe results or consequences that are clear, predictable, and unambiguous.

Probabilities

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.