A(n) _____ Is a Tool That Companies Can Employ to Identify

question 39

Multiple Choice

A(n) _____ is a tool that companies can employ to identify and measure their ethical commitment to stakeholders.

• A)ethics audit
• B)social audit
• C)financial audit
• D)performance audit
• E)external audit

---

Definitions:

Earned Surplus

Profits that a company has retained rather than distributed to shareholders, typically used for reinvestment in the business or to pay down debt.

Undistributed Profits

Profits earned by a company that have not been paid out as dividends to shareholders and are retained for reinvestment.

Earned Surplus Test

A financial analysis method used to determine a company's ability to declare dividends based on its accumulated, undistributed profits.

Capital Surplus

Represents the amount received by a company from the sale of shares above their par value, often reflecting the excess of invested capital over the nominal value of equity.