Executives at WorldCom Committed an $11 Billion Fraud by Capitalizing

question 88

Multiple Choice

Executives at WorldCom committed an $11 billion fraud by capitalizing costs that should have been expensed.This fraud had many effects on WorldCom's balance sheet.Which of the following does not describe one of the misstatements that resulted on the company's balance sheet?

• A)Total assets were too high.
• B)Retained earnings were too high.
• C)The balance sheet was in balance.
• D)Total liabilities were too low.

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Definitions:

Dividend Increase

An action taken by a company to raise the dividend amount paid to its shareholders, typically as a sign of strong financial health or increased profitability.

Required Rate of Return

The minimum annual percentage return an investor expects to earn from an investment to consider it worthwhile.

Annual Dividend

This refers to the total amount of dividends a company pays out to its shareholders per year.

Dividends Increase

An action by a company to raise the amount of money distributed to shareholders from its net income over a period.