Correct Answer: D

Explanation: The auditor's review of credit ratings of customers with delinquent accounts is normally accomplished during an audit in order to test the adequacy of the allowance for doubtful accounts. The auditor is trying to validate the proper dollar balance in the account. The valuation assertion is concerned with proper dollar valuation.

Today’s question: REG

I. Demonstrate that the "reasonable needs" of its business require the retention of all or part of the 2009 accumulated taxable income.
II. Pay dividends by March 15, 2010.

A)   I only

B)   II only

C)   Both I and II

D)   Neither I nor II

Correct Answer: C

Explanation: Dart can eliminate or reduce the accumulated earnings tax through the dividends paid deduction, which includes those dividends paid during the year plus those paid two and one-half months after the close of the year. It may also be eliminated or reduced by the accumulated earnings credit, which is the greater of:

1. the reasonable needs of the business less the accumulated earnings and profits of prior years,
or
2. $250,000 less the accumulated earnings and profits of prior years.

Hey Andrew,
This question is missing the first part...

AndrewCPA wrote: Today’s question: REG I. Demonstrate that the "reasonable needs" of its business require the retention of all or part of the 2009 accumulated taxable income. II. Pay dividends by March 15, 2010. A)   I only B)   II only C)   Both I and II D)   Neither I nor II

__________________
CPA Exam Club / PLUS / Facebook Study Groups