______ May Enhance Detection of Random Errors, Because They Are

question 2

Multiple Choice

______ may enhance detection of random errors, because they are performed with each test, whereas ______ detect(s) the sum of all processes in the testing system and does/do not require prior knowledge of a potential error.

• A)quality control, external controls
• B)internal controls, external controls
• C)internal controls, quality control
• D)quality control, internal controls

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Definitions:

Residual Dividend Policy

A method where dividends are based on earnings minus capital expenditures and working capital needs; basically, dividends are paid from leftover or residual earnings.

Target Capital Structure

The mix of debt, preferred stock, and common equity with which the firm plans to finance its investments. Companies often target a specific structure to optimize their cost of capital.

Capital Requirements

The amount of capital a bank or financial institution must hold to meet regulatory requirements and cover potential losses.

Dividend Payment

A distribution of a portion of a company's earnings to shareholders, typically in the form of cash or additional stocks.