Asked by Gustavo Perez-Ramirez on Jul 13, 2024
Verified
A related party transaction occurs when a company enters into a transaction with individuals or other companies that are connected in some way with it or its management.
Related Party Transaction
Financial transactions between entities that are considered to have a special relationship, such as companies with common ownership.
- Assess the significance of related party transactions and subsequent events in financial reporting.
Verified Answer
SS
Shameka SteeleJul 15, 2024
Final Answer :
True
Explanation :
This statement is true. A related party transaction involves dealings between a company and entities or individuals who have a close relationship with the company, such as its directors, shareholders, or subsidiaries. Such transactions require special disclosure and monitoring to avoid conflicts of interest and ensure fair prices and terms.
Learning Objectives
- Assess the significance of related party transactions and subsequent events in financial reporting.
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