Which of the Following Statements Is CORRECT

question 54

Multiple Choice

Which of the following statements is CORRECT?

• A) In most corporations,the CFO ranks above the CEO.
• B) By law in most states,the chairman of the board must also be the CEO.
• C) The board of directors is the highest ranking body in a corporation,and the chairman of the board is the highest ranking individual.The CEO generally works under the board and its chairman,and the board generally has the authority to remove the CEO under certain conditions.The CEO,however,cannot remove the board,but he or she can endeavor to have the board voted out and a new board voted in should a conflict arise.It is possible for a person to simultaneously serve as CEO and chairman of the board,though many corporate control experts believe it is bad to vest both offices in the same person.
• D) The CFO generally reports to the firm's chief accounting officer,who is normally the controller.
• E) The CFO is responsible for raising capital and for making sure that capital expenditures are desirable,but he or she is not responsible for the validity of the financial statements,as the controller and the auditors have that responsibility.

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Definitions:

General Journal Entries

The initial records where all financial transactions of a business are noted, using the double-entry method of accounting.

Account Balance

The amount of money in a financial repository at any given moment, which can include debts owed or credits available.

Financial Statement

Reports that provide detailed information about a company's financial performance and position, including the balance sheet, income statement, and cash flow statement.

Temporary/Permanent

Refers to classifications of accounts or differences affecting the timing of tax declarations and financial accounting records.