Which of the Following Was Not Pointed to by the SEC

question 48

Multiple Choice

Which of the following was not pointed to by the SEC as a motivation for fraud in the Xerox's case?

• A) Xerox misled investors by polishing its reputation on Wall Street and to boost the company's stock price.
• B) Xerox top management overrode the internal control to manipulate earnings.
• C) Xerox failed to disclose GAAP violations that led to acceleration in the recognition of approximately $3 billion in equipment revenues.
• D) Xerox recognized a greater amount of revenue on leases in early years than warranted and didn't break out revenues that should have been deferred and recognized in future years.

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Definitions:

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good changes as production volume changes.

Average Variable Cost Curve

A graphical representation that shows how the cost per unit of producing a variable quantity of goods changes as the quantity of output is altered.

Break-even Point

The point at which total costs and total revenue are equal, meaning a business is not making a profit but also not incurring any losses.

Marginal Cost

The rise in overall expenses associated with the production of an extra unit of a good or service.