A General Principle of Disclosure Is That Material Related-Party Transactions

Multiple Choice

A general principle of disclosure is that material related-party transactions should be disclosed. As the auditor of the Clarence Company, you have noted the following transactions entered into by Clarence during the past fiscal year:

Assuming all of the above transactions are material, which transaction or transactions above most likely would be a related party transaction requiring disclosure in Clarence's financial statements?

A) Only I above.
B) Only III above.
C) Both I and III above.
D) Both II and III above.