Which of the Following Actions Was a Key Element of the Enron

question 82

Multiple Choice

Which of the following actions was a key element of the Enron audit fraud?

• A)Capitalizing line costs rather than expensing them.
• B)Misrepresenting bribes from suppliers as a reduction of operating costs.
• C)Shifting debt to off-balance sheet special entities.
• D)Concealing large losses related to securities investments.

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Definitions:

Oligopolistic Producers

These are companies within an industry where a small number of firms hold a large market share, leading to limited competition and potentially collaborative market behaviors.

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, leading to competition based on product differentiation.

Normal Profits

The minimum profit necessary for a company to remain competitive in the market, equivalent to the opportunity cost of capital.

Efficiently

Performing or operating in the best possible manner with the least waste of time and effort.