Which of the following would NOT be classified as a related- party transaction?
A) Sales of merchandise between affiliated companies
B) Exchanges of equipment between two companies owned by the same person
C) An advance of one week's salary to an employee
D) Loans or credit sales to the principal owner or client

Question

Quizplus · Accepted Answer

Related-party transactions involve transactions between a company and its related parties, such as its subsidiaries, affiliates, owners, or key management personnel. Therefore, an advance of one week's salary to an employee is not considered a related-party transaction, as the employee is not a related party of the company. The other options listed involve transactions between related parties and would be considered related-party transactions.

Which of the Following Would NOT Be Classified as a Related-