Which One of the Following Statements Is Correct

question 63

Multiple Choice

Which one of the following statements is correct?

• A)A spin-off frequently follows an equity carve-out.
• B)A split-up frequently follows a spin-off.
• C)An equity carve-out is a specific type of acquisition.
• D)A spin-off involves an initial public offering.
• E)A divestiture means that the original firm ceases to exist.

Understand inventory management techniques and their financial implications.

Identify the key components of a firm's credit analysis and collection policy.

Understand the concepts and applications of credit instruments in financial management.

Comprehend the importance and methods of managing receivables and the implications for cash flow.

---

Definitions:

Common Shares

A type of equity security that represents ownership in a corporation, with holders possibly entitled to dividends and voting rights.

Net Income

The ultimate earnings of a corporation after reducing total income by any expenses, taxes, and costs.

Prior Period Adjustments

Adjustments made to correct financial statements of previous periods due to errors or changes in accounting policy, ensuring accuracy in current financial reporting.

Statement Of Retained Earnings

A financial document that shows how a firm's earnings are reinvested in the business or paid out to shareholders.