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

question 51

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: 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.

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Definitions:

Mode

describes the value that appears most frequently in a data set.

Mean

A statistical measure that represents the average value of a set of numbers.

Range

in statistics, is the difference between the highest and lowest values in a data set.

Corpus Callosum

The thick bundle of nerve fibers that connects the left and right hemispheres of the brain.