1. Which of the following does not affect retained earnings? 3. Actual paymentfdistribution of dividends. b. Adjustment of prior period's profits. c. Board of directors' decision relating to recapitalization. d. Profit ofa corporation during the period. 2. A change from a higher par value to a lower par value share capital: 3. Decreases total assets. b. Decreases total shareholders' equity. c. Does not affect total shareholders' equity. d. Increases total shareholders' equity. 3. In a share split up, a larger number of shares replaces the original shares with: 3. Corresponding decrease in the par value of both the original shares replaced and the new shares issued. b. Corresponding decrease in the par value of the new shares issued. c. Corresponding decrease in the par value of the original shares replaced. d. No effect on the par value for each share. 4. Quasireorganization is allowed: a. For both financiallytroubled and stable companies. b. For financiallytrou bled entities. c. For stable companies. d. When approved by the board of directors. rII