The FASB define related parties as
A)customers of the company
B)investments accounted for using the cost method of accounting for investment securities
C)trusts for the benefit of employees,such as,pension and profit sharing trusts that are managed by management
D)principal owners of the company and their immediate families
E)employees of the company and their immediate families
F)both A and B
G)both B and E
H)Both C and D

Question

Quizplus · Accepted Answer

According to the FASB, related parties include principal owners of the company and their immediate families (choice D) as well as trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by management (choice C). Therefore, the best choice is H, which includes both of these options.

The FASB Define Related Parties as