In 2002, the Enron Corporation Was Accused of Falsifying Information

question 187

Multiple Choice

In 2002, the Enron corporation was accused of falsifying information regarding liabilities on Enron's balance sheets, thereby

• A)increasing Enron's assets on the balance sheet.
• B)reducing Enron's profit on the balance sheet.
• C)increasing Enron's net worth on the balance sheet.
• D)reducing Enron's net income on the income statement.

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Definitions:

Predetermined Overhead Rate

The rate used to allocate manufacturing overhead costs to products, computed before the period begins based on estimated costs and activity levels.

Direct Labor-Hours

Full count of working hours by employees in direct connection with the production process.

Job Cost Sheet

A document that records the materials, labor, and manufacturing overhead costs assigned to each individual job.

Machine-Hours

A unit of measure reflecting the amount of time a machine is operated, used in cost accounting and operational management to allocate machine costs to products.