Question

Which of the following statements is false?

a) The Securities and Exchange Commission (SEC) is the governmental agency that regulates the stock market and enforces reporting standards for publicly traded corporations.
b) An increase or decrease in income will ultimately affect the balance sheet.
Stockholders' Equity is financing provided by the owners and by the operations of the business.
c) Equipment, accounts payable, cash, and inventory would all be found in the asset section of a balance sheet.
d) Earning revenue is an operating activity of a business.

Answer 1

The false statement is option c) as accounts payable is a liability, not an asset, on a balance sheet. The balance sheet comprises assets, liabilities, and stockholders' equity.

Step-by-step explanation:

The statement that is false among the options provided is option c) Equipment, accounts payable, cash, and inventory would all be found in the asset section of a balance sheet. Accounts payable is not an asset but a liability. A balance sheet categorizes items into assets, liabilities, and stockholders' equity. Assets include things of value like equipment, cash, and inventory. Liabilities, such as accounts payable, represent what a company owes to others. Stockholders' equity represents the ownership interest in the company.]

Stockholders' Equity indicates financing provided by the owners and the ongoing operations. The Securities and Exchange Commission (SEC) is indeed the governmental agency that regulates the stock market and enforces reporting standards for listed companies. An increase or decrease in income affects the balance sheet because it changes the equity. Lastly, earning revenue is an operating activity for a business, reflecting the company’s primary business activities.