Question

Question 1) The SEC adopted Regulation FD, to curb public companies’ practice of:

Group of answer choices

A) Routinely filing extensions for annual reports (Form 10-K)

B) Selectively disclosing information

D) Hiring auditors for non-audit services such as consulting engagements

E) None of the above

Question 2) Identify which of the following items would be reported in the income statement.

a.	Cash	d.	Wage expense	g.	Net income
b.	Sales	e.	Wages payable	h.	Inventory
c.	Long-term debt	f.	Retained earnings	i.	Cost of goods sold

Items reported in the income statement would include:

Group of answer choices

A) b, e, g, and h

B) a, b, d, and i

C) b, e, f, and g

D) d, f, g, and h

E) b, d, g, and i

Answer 1

1. B) Selectively disclosing information

Explanation:

Regulation FD (for “Fair Disclosure”), promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prohibits companies from selectively disclosing material nonpublic information to analysts, institutional investors, and others without concurrently making widespread public disclosure.   The rule reflects the view that all investors should have equal access to a company’s material disclosures at the same time.   Since its enactment in 2000, Regulation FD has fundamentally reshaped the ways in which public companies conduct their conference calls, group investor meetings, and so‐called “one‐on‐one” meetings with analysts and investors.

E) b, d, g, and i

Explanation:

The items of the Income statement include sales, cost of goods sold, wages payable and Net income. Whereas, the items of balance sheet includes cash and inventory (on the assets side) and wages payable, retained earnings and long term debt (on the liabilities side)