1) Select Increase, Decrease, or No effect, to indicate the effect on retained earnings for the listed transaction: Resale of treasury stock for less than book value

1. Increase

2. No effect

3. Decrease

2) A change in reporting entity and a material error correction are both reported prospectively.

1. True

2. False

3) Whether a company decides to fund its business using debt or equity has no impact on the overall financial outcome of the business.

1. True

2. False