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

Question

Quizplus · Accepted Answer

An advance of one week's salary to an employee is not a related-party transaction as the employee is not a related party to the company. Related-party transactions involve transactions between parties that have a close relationship or connection with the company, such as affiliates, owners, or key management personnel. Options B, C, and D involve transactions with related parties and would be classified as related-party transactions.

Which of the Following Would Most Likely Not Be Classified