Which of the Following Statements Is FALSE

question 15

Multiple Choice

Which of the following statements is FALSE?

• A)Once a company goes public,it must satisfy all of the requirements of public companies.
• B)Organizations such as the Securities and Exchange Commission (SEC),the securities exchanges (including the New York Stock Exchange and the Nasdaq),and Congress (through the Sarbanes-Oxley Act of 2002)adopted new standards that focused on more thorough financial disclosure,greater accountability,and more stringent requirements for the board of directors.
• C)The major advantage of undertaking an IPO is also one of the major disadvantages of an IPO: When investors diversify their holdings,the equity holders of the corporation become more concentrated.
• D)Several high profile corporate scandals during the early part of the twenty-first century prompted tougher regulations designed to address corporate abuses.

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Definitions:

Accounts Payable

Obligations or debts owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

Net Income

The amount of money that remains after all operating expenses, interest, taxes, and dividends have been deducted from total revenue.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital.

Book Value

The net value of a company's assets as reported on the balance sheet, calculated as total assets minus total liabilities and intangible assets not readily marketable.