An Audit Program for the Examination of the Retained Earnings

question 3

Multiple Choice

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

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

---

Definitions:

Dimensioning

The practice of specifying part sizes, shapes, and features on technical drawings or CAD models, including dimensions, tolerances, and other critical specifications.

Two-Axis

Referring to systems, machines, or components that operate or move in two different directions or planes, typically described by x and y coordinates.

Negative Y Values

Represent values below the horizontal axis in a Cartesian coordinate system, typically indicating a decrease or loss.

Accurately Positioning

The precise placement or alignment of components in relation to each other or to a reference point, crucial for the correct functioning of mechanical systems.