Sorry for the mistake on the 23rd! Here is the full question and answer:

Dart Corp., a calendar year domestic C corporation, is not a personal holding company. For purposes of the accumulated earnings tax, Dart has accumulated taxable income for 2009. Which step(s) can Dart take to eliminate or reduce any 2009 accumulated earnings tax?

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.

Today’s question: AUD

Which of the following types of audit evidence is the least persuasive?

A)   Prenumbered purchase order forms

B)   Bank statements obtained from the client

C)   Test counts of inventory performed by the auditor

D)   Correspondence from the client's attorney about litigation

Correct Answer: A

Explanation: Internal evidence, consisting of documents such as purchase orders that are produced within the client's system, is generally considered low in competence and therefore the least persuasive.

• "Bank statements obtained from the client" is an example of external-internal evidence, is considered more competent.
• "Test counts of inventory performed by the auditor" is evidence obtained directly from an external source, is better than evidence that goes through the client before reaching the auditor.
• "Correspondence from the client's attorney about litigation." is an example of the most persuasive evidence because it is obtained directly by the auditor through physical observation.