Financial statement analysis is a judgmental process

Which of the following is true of retained earnings?

A) Retained earnings decrease with payment of dividends. B) Retained earnings increase with purchase of assets. C) Retained earnings decrease with collection of revenue. D) Retained earnings increase with payment on account.

Alex studies the projected financial returns from his customers including the money, resources, time and information involved in managing each account. Based on this analysis he may decide to

A. Formalize customer loyalty B. Fire some customers C. Utilize a push and pull financial information strategy D. Develop strategic, sustainable functional trusts E. None of the above