Which of the Following Statements Is FALSE

question 66

Multiple Choice

Which of the following statements is FALSE?

• A) Many IPOs, especially the larger offerings, are managed by a group of underwriters.
• B) At an IPO, a firm offers a large block of shares for sale to the public for the first time.
• C) After deciding to go public, managers of the company work with an underwriter, an investment banking firm that manages the offering and designs its structure.
• D) The shares that are sold in the IPO may either be new shares that raise new capital, known as a secondary offering, or existing shares that are sold by current shareholders (as part of their exit strategy), known as a primary offering.

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Definitions:

Uncollectible Account

Refers to receivables that a company has deemed impossible to collect, recognizing it as a bad debt expense.

Repayment of Loan

The process of paying back borrowed money to the lender, typically involving periodic payments of principal and interest over a set term.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.

Accounts Payable

Liabilities of a business that are due to creditors within a short period of time, usually for the purchase of goods and services.