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Related Parties Problem 4-1: D. Two Ventures Simply Because They Share Joint Control Over Joint Venture

The document discusses related parties and related party transactions. It defines related parties to include parents, subsidiaries, associates, and key management personnel. A related party transaction is a transfer between related parties, whether or not a price is charged. Minimum required disclosures for related party transactions include the transaction amount, outstanding balance, and nature of the relationship.

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3K views3 pages

Related Parties Problem 4-1: D. Two Ventures Simply Because They Share Joint Control Over Joint Venture

The document discusses related parties and related party transactions. It defines related parties to include parents, subsidiaries, associates, and key management personnel. A related party transaction is a transfer between related parties, whether or not a price is charged. Minimum required disclosures for related party transactions include the transaction amount, outstanding balance, and nature of the relationship.

Uploaded by

jake doinog
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 4

Related Parties
Problem 4-1
1. Related parties include and fellow, except

a. Parent, subsidiary and fellow subsidiaries


b. Associates
c. Key management personnel and close family members of such key
management personnel
d. Two ventures simply because they share joint control over joint venture

2. 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

3. Unrelated parties include which of the following?

a. Provides of finance in the course of their normal dealings with an entity by


virtue only of those dealings
b. Government agencies
c. Single customer with whom an entity transacts a significant volume of
business merely by virtue of the resulting economic dependence.
d. All of these are unrelated parties

4. 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

5. 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
Problem 4-2
1. Which is not included in key management personnel compensation?

a. Short-term benefit
b. Share-based payment
c. Termination benefit
d. Reimbursement of out-of-pocket expenses

2. Which of the following is not a mandated disclosure about related party


transactions?

a. Relationship between parent and subsidiaries


b. Name 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.

3. 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 the 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

4. Related party transactions include all, except

a. A venture 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

5. All of the following are related party transactions, except

a. Transferred goods from inventory to a subsidiary


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
6. An entity that entered into a related party transaction would be required to
disclose all of the following information, except

a. Nature of the relationship between that parties


b. Nature of any future transactions planned between the parties and the
term involved
c. Peso amount due from or to related parties at the end of reporting
period.
d. Amount due from or to related parties at the end of reporting period.

7. 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 venture

8. All of the following are related parties, except

a. Joint venture in which the entity is a venture


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 of the entity

9. Which of the following is not related party of an entity?

a. A shareholder of the entity owning twenty percent


b. An entity providing banking facilities to the entity
c. An associate of the entity
d. Key management personnel of the entity

10. 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

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