Repo 105:
A) Is a toll that Enron used for off-the-book entities.
B) Allowed debt instruments to be sold prior to public announcement of financial results.
C) Was used by WorldCom to capitalize ordinary expenses.
D) Was Chases' derivative trading strategy.

Question

Quizplus · Accepted Answer

Repo 105 was a tactic used by Enron to temporarily remove assets from the balance sheet and generate cash through the sale of short-term debt instruments. It was used prior to the announcement of financial results to make the company appear more financially stable than it actually was. It was later discovered to be a fraudulent accounting practice. None of the other answer choices are correct.