The Amount of Time Spent Verifying Owners' Equity Is Frequently

question 60

Multiple Choice

The amount of time spent verifying owners' equity is frequently minimal for closely held corporations because

• A) these companies are so small that it is not necessary to audit the capital section.
• B) the few owners all have access to the books so the auditor spends more time on accounts like liabilities, which affect outsiders.
• C) there are few if any transactions during the year for the capital stock accounts, except for earnings and dividends.
• D) there is no public interest in these companies.

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Definitions:

Transitivity

In preferences, it's the principle that if option A is preferred to B, and B is preferred to C, then A should be preferred to C.

Nonsatiation

The assumption in economics that more of a good or service is always preferred to less, implying that there is no saturation point in consumption.

Prefer

Expressing a choice or inclination towards one option or item over another.

Market Basket

A set of goods and services that are typically consumed by a household or used to track the cost of living or inflation.