RELATED PARTIES Flashcards
1.Related parties include all of the following, except
a. Parent, subsidiary and fellow subsidiaries
b. Associates
c. Key management personnel and close family members of such key management personnel
d. Two venturers simply because they share joint control over a joint venture
d. Two venturers simply because they share joint control over a joint venture
- A related party transaction is a transfer
a. Between related parties when a price is charged.
b. Between related parties, regardless of whether a price is charged.
c. Between unrelated parties when a price is charged.
d. Between unrelated parties, regardless of whether a price is charged.
b. Between related parties, regardless of whether a price is charged.
- Unrelated parties include which of the following?
a. Providers of finance in the normal course of business
b. Government agencies
c. Single customer with significant volume of business
d. All of these are unrelated parties
d. All of these are unrelated parties
- Close family members of an individual include all, except
a. The individual’s spouse and children
b. Children of the individual’s spouse
c. Dependents of the individual or individual’s spouse
d. Brothers and sisters of the individual
d. Brothers and sisters of the individual
- The minimum disclosures about related party transactions include all of the following, except
a. The amount of the transaction
b. Amount of outstanding balance
c. Allowance for doubtful accounts related to the outstanding balance
d. Nature of the relationship
d. Nature of the relationship
- Which is not included in key management personnel compensation?
a. Short-term benefit tern
b. Share-based payment
c. Termination benefit
d. Reimbursement of out-of-pocket expenses
d. Reimbursement of out-of-pocket expenses
- Which of the following is not a mandated disclosure about related party transactions?
a. Relationship between parent and subsidiaries
b. Names of all the associates that an entity has dealt with during the year.
c. Name of the entity’s parent and, if different, the ultimate controlling party.
d. If neither the entity’s parent nor the ultimate controlling entity produces financial statements available for public use, then the name of the next most senior parent that does so.
b. Names of all the associates that an entity has dealt with during the year.
- Which of the following is not a required minimum disclosure about related party transaction?
a. The amount of related party transaction
b. The amount of the outstanding balance
c. The amount of similar transaction with unrelated parties to establish that comparable related party transaction has been entered at arm’s length
d. Doubtful debt related to the outstanding balance
c. The amount of similar transaction with unrelated parties to establish that comparable related party transaction has been entered at arm’s length
- Related party transactions include all, except
a. A venturer sold goods to the joint venture.
b. Sold a car to the uncle of the entity’s finance director.
c. Sold goods to another entity owned by the daughter of the managing director.
d. All of these are related party transactions.
b. Sold a car to the uncle of the entity’s finance director.
- All of the following are related party transactions, except
a. Transferred goods from inventory to a subsdiary
b. Sold an entity car to the wife of the managing director
c. Sold an asset to an associate
d. Took out a huge bank loan
d. Took out a huge bank loan
- An entity that entered into a related party transaction would be required to disclose all, except
a. Nature of the relationship between the parties.
b. Nature of any future transactions planned between the parties and the terms involved.
C. Peso amount of the transaction.
d. Amount due from or to related parties.
b. Nature of any future transactions planned between the parties and the terms involved.
- Which is not a required related party disclosure?
a. The son of the chief executive officer of the entity
b. The parent of the entity
c. An entity that has a common director with the entity
d. Joint venture in which the entity is a venturer
c. An entity that has a common director with the entity
- All of the following are related parties, except
a. Joint venture in which the entity is a venturer
b. A postemployment benefit plan for the employees
c. An executive director of the entity
d. The partner of a key manager is a major supplier
d. The partner of a key manager is a major supplier
- Which of the following is not a related party?
a. A shareholder owning twenty percent
b. An entity providing banking facilities
c. An associate
d. Key management personnel
b. An entity providing banking facilities
- Which of the following should be included in key management personnel compensation?
a. Social security contributions
b. Postemployment benefits
c. Social security contributions and postemployment benefits
d. Social security contributions, postemployment benefits and dividends to shareholders
c. Social security contributions and postemployment benefits
- Which should be disclosed as related party transaction in the entity’s separate financial statements?
a. Key management personnel compensation
b. Sales to affiliated entities
c. Key management personnel compensation and sales to affiliated entities
d. Neither key management personnel compensation nor sales to affiliated entities
c. Key management personnel compensation and sales to affiliated entities
- Financial statements shall include disclosure of material transactions between related parties, except
a. Nonmonetary exchange by affiliates
b. Sales of inventory by a subsidiary to the parent when consolidated financial statements are prepared.
c. Expense allowance for executives which exceed normal business practice
d. An entity’s agreement to act as surety for a loan to the chief executive officer
b. Sales of inventory by a subsidiary to the parent when consolidated financial statements are prepared.
- An entity has cosigned the mortgage note on the home of its president guaranteeing the indebtedness in the event that the president should default. The entity considers the likelihood of default to be remote. How should the guarantee be treated in the financial statements?
a. Disclosed only
b. Accrued only
c. Accrued and disclosed
d. Neither accrued nor disclosed
a. Disclosed only
- Which of the following transactions nost likely would be a related party transaction requiring disclosure?
a. The entity borrowed P1,000,000 from Southwest Bank issuing a noninterest-bearing note.
b. The entity borrowed P2,000,000 from Northwest Bank at a rate significantly above the prevailing market rate.
c. The entity borrowed P500,000 from Eastwest Bank with no scheduled terms for how or when funds will be repaid.
d. The entity borrowed P3,000,000 from West Bank at a rate which is a little below the prevailing market rate.
c. The entity borrowed P500,000 from Eastwest Bank with no scheduled terms for how or when funds will be repaid.
