A person or entity that is related to the entity preparing its financial statements is referred to as a/an:
A)financial party
B)related party
C)unrelated party
D)none of the above

Question

Quizplus · Accepted Answer

A related party is a person or entity that is related to the entity preparing its financial statements in some way, such as through ownership, control, or common management. Examples of related parties include owners, directors, officers, and other key employees, as well as affiliated companies, joint ventures, and subsidiaries. It is important for financial statements to disclose any related party transactions or relationships, as they may indicate potential conflicts of interest or other risks to the entity's financial health.

A Person or Entity That Is Related to the Entity