Enron Corporation Filed for Bankruptcy Following a Number of Revelations

question 76

Multiple Choice

Enron Corporation filed for bankruptcy following a number of revelations about its accounting procedures. Enron used a complex structure of corporations and off-the-books debt to mask its true financial picture from the markets. When asked about the propriety of Enron's reporting methods, many analysts have responded, "They simply did what most corporations do." Their comments:

• A)reflect analysis under the Nash model.
• B)reflect analysis under the Blanchard/Peale model.
• C)reflect rationalization.
• D)reflect Wall Street Journal analysis.
• E)None of the above

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Definitions:

Misrepresentation

The act of providing false or misleading information about a material fact in a transaction.

Contract Price

The amount of money agreed upon by parties involved in a contract for services or goods to be provided or delivered.

Delegatee

A person or party that is designated to act or make decisions on behalf of another, typically in a specified capacity or for particular issues.

Performance Duty

The obligation of a party to a contract to fulfill the terms of the agreement as specified.