The FASB Define Related Parties as

question 31

Multiple Choice

The FASB define related parties as

• A)customers of the company
• B)investments accounted for using the cost method of accounting for investment securities
• C)trusts for the benefit of employees,such as,pension and profit sharing trusts that are managed by management
• D)principal owners of the company and their immediate families
• E)employees of the company and their immediate families
• F)both A and B
• G)both B and E
• H)Both C and D

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Definitions:

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by shareholders' equity.

Total Assets

The sum of all resources owned by a company, valued in terms of the financial benefits they bring, and listed on the balance sheet.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including debts and other financial commitments.

Return on Total Assets

A financial ratio that measures a company's ability to generate net income from its total assets, indicating efficiency in asset use.