An Audit Program for the Examination of the Retained Earnings

question 57

Multiple Choice

An audit program for the examination of the retained earnings account should include a step that requires verification of the:

• A)gain or loss resulting from disposition of treasury shares.
• B)market value used to charge retained earnings to account for a two-for-one stock split.
• C)authorization for both cash and stock dividends.
• D)approval of the adjustment to the beginning balance as a result of a write-down of an account receivable.

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Definitions:

Worker Productivity

The amount of goods and services that a worker produces in a given period of time.

College Education

A postsecondary education program that leads to an academic degree or professional qualification, typically offered by colleges and universities.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production or resource.

Resource Price

The cost associated with acquiring a resource needed for production, such as labor, materials, or capital.