A customer has sold 20,000 shares of ABC stock at $5 per share just before a stock split. Which statement about the customer's confirmation is TRUE?

The situation described involves a customer who sold shares of stock just before a stock split. In the context of a stock split, the intent is to adjust the share price and the number of shares outstanding, which makes the shares more accessible to investors. When a customer sells shares just before a split, the sale confirmation should reflect the accurate pricing after accounting for the split.

If the stock split occurs after the sale of the shares, the sale confirmation initially stating the sale at $5 per share would not correctly represent the adjustment that needs to be made due to the split. The firm must ensure that the confirmation is accurate and properly reflects the situation, meaning the confirmation would need to be corrected to reflect the split-adjusted price for the shares involved. This ensures that the client receives the proper settlement, taking into account the split's impact on share count and price.

Therefore, stating that the firm made an error and must correct the confirmation to $5 per share accurately reflects the requirement for adjustments following a stock split.