In auditing debits and credits to retained earnings, other than net income and dividends, the auditors first concern is
A) whether the transactions should have been included in retained earnings.
B) whether the transactions have been accurately recorded.
C) whether the transactions are classified correctly in the footnotes.
D) whether the transactions existed as of the balance sheet date.

Question

Quizplus · Accepted Answer

Transactions other than net income and dividends that affect retained earnings should be scrutinized to ensure they are appropriate for inclusion in retained earnings, as this impacts the accuracy of the financial statements.

In Auditing Debits and Credits to Retained Earnings, Other Than