Rand, an Accountant, Includes a False Statement in a Report

question 8

Multiple Choice

Rand, an accountant, includes a false statement in a report for Social Media Inc. that is filed with the Securities and Exchange Commission. When Teo buys stock in Social Media and loses money on the investment, he files a suit against Rand, alleging fraud under the 1934 Securities Exchange Act. To avoid liability, Rand can show that he

• A)intended to defraud Social Media, not Teo.
• B)intended to profit on stock trades generally, not only Teo's.
• C)is an otherwise competent accountant.
• D)had no knowledge that the statement was false.

Identify types of income that are subject to federal income tax and those that are not.

Recognize the requirements for reporting taxable interest and dividends, including their treatment and exceptions.

Grasp the concept of economic benefit and its implications for income recognition.

Understand the criteria for identifying taxable and nontaxable income, including the impact of state tax refunds and other specific items.

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