The SEC's Complaint in Its Case Against GE Included a Charge

question 8

Multiple Choice

The SEC's complaint in its case against GE included a charge that the company:

• A)Used off-balance sheet entities to manipulate earnings
• B)Falsified inventory values to inflate earnings
• C)Used non-GAAP measures to meet EPS estimates
• D)Used EBITDA to obscure reported earnings

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Definitions:

Inefficient Divisions

Parts of an organization that operate with lower productivity or effectiveness compared to expected standards.

Production Costs

The total expense involved in manufacturing goods, including raw materials, labor, and overhead costs.

General Rule

A principle or guideline that applies broadly and is considered to be of general use or value.

External Sales

Sales made to parties outside of the company, as opposed to internal transactions.