WorldCom Classified $3

question 22

Multiple Choice

WorldCom classified $3.85 billion in operating expenses as long-term investments. How would this make WorldCom's financial statements more attractive to investors?

• A) by decreasing depreciation
• B) by reducing capital expenditures
• C) by raising its reported earnings
• D) by boosting its cash flows

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Definitions:

Direct Observation

The method of gathering data through immediate, firsthand observation of people or phenomena.

Knowledge

Acquainted with or understanding of facts, information, descriptions, or skills acquired through experience or education.

Visual

Relating to seeing or sight, involving the use of vision.

Reasoning

The process of thinking about something in a logical way in order to form a conclusion or judgment.