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:

Presentment

The process of formally presenting a document, such as a check or bill of exchange, for acceptance or payment.

Negotiable

Capable of being transferred or sold with ease, often referring to financial instruments that can be transferred from one party to another.

Payment Time

The specific period within which a payment is due or expected to be made.

Nonexistent Organization

An entity that is claimed or thought to exist but in reality does not.