Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) After deciding to go public, managers of the company work with an underwriter, an investment banking firm that manages the offering and designs its structure.
• B) The shares that are sold in the IPO may either be new shares that raise new capital, known as a secondary offering, or existing shares that are sold by current shareholders (as part of their exit strategy), known as a primary offering.
• C) Many IPOs, especially the larger offerings, are managed by a group of underwriters.
• D) At an IPO, a firm offers a large block of shares for sale to the public for the first time.

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Definitions:

Fees Earned

Income earned from providing services or performing work, recognized in the accounting period when the services are rendered.

Cash

Money in the form of bills or coins; the most liquid asset available.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for, represented as an asset on the balance sheet.

Unearned Revenues

Liabilities recognized when a company receives payment for goods or services yet to be delivered or performed.