Which of the Following Was a Consequence of the Scandal

question 37

Multiple Choice

Which of the following was a consequence of the scandal involving Enron Corporation?

• A)Forty-two energy-producing companies controlled by the private sector closed down.
• B)Most U.S. industries turned to Middle Eastern companies for energy and fuel.
• C)More companies resorted to unethical business practices.
• D)Enron started paying high salaries and bonuses to all its employees.
• E)Twenty thousand Enron employees lost much of their pensions.

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Definitions:

Accrual-based Net Income

The measure of an organization's earning power from ongoing operations, calculated by adding non-cash expenses and revenues booked but not paid to net income under cash accounting.

Domestic Corporations

Companies that are incorporated and operate within the country where they were formed.

Excess Fair Value

The amount by which the fair market value of an asset exceeds its carrying value on the balance sheet.

Franchise Contract

A legal agreement granting a person or group the rights to operate a business under the franchisor's model and brand for a specified period.