The Distinction Between Physical Examination of Assets and Examination of Documents

question 13

Multiple Choice

The distinction between physical examination of assets and examination of documents is dependent on the item being examined. If the object being examined has no inherent value, the evidence is called:

• A) physical examination.
• B) documentation.
• C) observation.
• D) confirmation.

---

Definitions:

Retained Earnings

Funds that are not distributed as dividends but are reserved by the company to reinvest in its business, pay off debt, or save for future use.

Deficit

The amount by which expenses exceed income or liabilities exceed assets.

Dividend Yield Ratio

An indicator of the yearly dividends paid by a corporation as a proportion of its stock price.