Question

name: case study the enron scandal 1. what type of company was enron? a) a technology company b) a retail company c) an energy company d) a financial services company 2. why did enrons executives manipulate financial records? a) to lower taxes b) to make the company appear more successful c) to reduce employee salaries d) to attract more government funding 3. what accounting method did enron use to falsely record profits? a) cash accounting b) accrual accounting c) mark - to - market accounting d) double - entry accounting 4. what happened to enron’s stock price after the fraud was exposed? a) it increased slightly b) it collapsed completely c) it remained the same d) it doubled in value 5. who was the ceo of enron during the scandal? a) andrew fastow b) jeffrey skilling c) kenneth lay d) bernie madoff

Explanation:

Question 1

Enron was known as an energy company, involved in energy trading, etc. So option c is correct.

Enron's executives manipulated financial records to make the company seem more successful, to meet earnings expectations and boost stock prices. So option b is correct.

Enron used mark - to - market accounting in a fraudulent way to record profits from future contracts as current profits. So option c is correct.

Answer:

c. An energy company

Question 2