Which of the following transactions are not related party transactions for an entity?
I) An employee purchased the entity's products on normal trading terms.
II) The entity made an agreement with a trade union about increase in employee's wages.
III) A subsidiary of the entity supplied raw materials to the entity.
IV) The entity lent money to one of its directors.
A) I and II only;
B) I and III only;
C) II and IV only;
D) III and IV only.

Question

Which of the following transactions are not related party transactions for an entity?
 I) An employee purchased the entity's products on normal trading terms.
II) The entity made an agreement with a trade union about increase in employee's wages.
III) A subsidiary of the entity supplied raw materials to the entity.
IV) The entity lent money to one of its directors.
A) I and II only;
B) I and III only;
C) II and IV only;
D) III and IV only.

Quizplus · Accepted Answer

I is not a related party transaction because the employee is not considered a related party by definition.
II is not a related party transaction because the trade union is an external third party and not a related party.
III and IV are related party transactions because a subsidiary is a related party as per the definition and lending money to a director is also a related party transaction.

Which of the Following Transactions Are Not Related Party Transactions