Pat,an Accountant,includes a False Statement in a Report for Quantity

question 53

Multiple Choice

Pat,an accountant,includes a false statement in a report for Quantity Overstock,Inc.,that is filed with the Securities and Exchange Commis-sion.Quantity publishes a misleading ad about its future prospects.Rita sees the ad and calls Stan,who buys stock in Quantity.Under Section 18 of the Securities Ex-change Act of 1934,liability may attach to

• A)Pat's report.
• B)Quantity's ad.
• C)Rita's call.
• D)Stan's purchase.

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Definitions:

Close Revenue

The process of transferring the balances of all revenue accounts to the income summary account at the end of an accounting period.

Expense Accounts

Accounts used in accounting to record all expenses a company incurs during a specific period.

Adjusted Trial Balance

An adjusted trial balance is a listing of all company accounts that will appear in the financial statements after adjusting entries have been made for the accounting period.

Income Statement

A financial statement that shows a company's revenue and expenses over a specified period, leading to the net income or loss for the period.