Which One of the Following Statements Is False

question 9

Multiple Choice

Which one of the following statements is false?

• A) Financial executives must design financial securities to meet the needs of the firm and its investors.
• B) Financial instruments are subject to full disclosure requirements.
• C) Financial instruments are greatly constrained by law and regulation.
• D) Financial instruments are claims against a company's cash flows and assets.
• E) None of the above.

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Definitions:

Operating Item

Expenses or revenues that arise from the primary operations of a company.

Asset Retirement Obligation

A legal obligation associated with the retirement of a tangible long-lived asset, where the liability is recognized in the period in which it incurs.

Indefinite-Lived Intangible

Non-physical assets without a fixed life and which do not amortize, such as trademarks or brand names, that have potential value as long as they are used by the company.

Impairment

The decrease in an asset's value on a company's financial statements, reflecting that the asset is worth less than its carrying amount.