Question

1)What is the SEC's position on companies that communicate with investors on social media?

a)It is legal so long as companies inform investors which outlets they intend to use

b)It is illegal to do so

c)There are no limitations on companies communicating through social media

d)It is legal so long as the postings are restricted to Facebook

2)Motivations to smooth net income over time include each of the following except:

a)Maximize bonuses and stock option values

b)Make it appear managers are doing better than they really are

c)Minimize overall taxes

d)Steady increase in earnings each year

Answer 1

1) Option A Companies can communicate on social media as long as the company informs the investors which medium they intend to use to communicate
2) Option C Minimizing overall taxes is not a motivation to smoothen the net income over the time