A Primary Concern in Determining Whether Retained Earnings Is Correctly

question 27

Multiple Choice

A primary concern in determining whether retained earnings is correctly disclosed on the balance sheet is

• A)correct calculation of the net income or loss for the year.
• B)correct calculation of dividend payments for the year.
• C)whether adjustments to retained earnings have been made correctly.
• D)whether there are any restrictions on the payment of dividends.

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Definitions:

Sarbanes-Oxley Act

A U.S. federal law that aimed to protect investors by improving the accuracy and reliability of corporate disclosures.

Independent Directors

Members of a company's board of directors who do not have a material or pecuniary relationship with the company or related persons, ensuring unbiased governance and decision-making.

CFO

Chief Financial Officer, a senior executive responsible for managing the financial actions of a company.

Auditing Firms

Companies specializing in examining and evaluating the accuracy of financial records and statements of a corporation or entity.