Which of the Following Was Not a Technique Used by Enron

question 15

Multiple Choice

Which of the following was not a technique used by Enron to manage earnings?

• A) Used reserves to increase earnings when reported amounts were too low
• B) Deliberately overstated the allowance for uncollectibles and adjusted it downward in future years
• C) Used mark-to-market estimates to inflate earnings in violation of GAAP
• D) Selected which operating assets to "sell" to the SPEs, affecting the gain on transfer and earnings effect

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Definitions:

Discretionary Policy

A type of fiscal or monetary policy that involves non-automated, active decisions by policymakers to influence economic conditions.

Time Lag

The delay between the cause or initiation of an event and its effect or outcome, often used in the context of economic policy impacts.

Economic Problem

The fundamental issue arising from the scarcity of resources relative to human wants, necessitating choices and prioritization in the allocation of resources.

Policy Change

Alterations or adjustments made by government or organizations in existing policies to address new issues or improve outcomes.