The government says Skilling knew Enron wrongly dipped into reserves to pad earnings when business units failed to meet income targets through regular operations.
"Did you think of reserves as a place you could just pull out money for earnings?" Skilling attorney Daniel Petrocelli asked.
"You couldn't," Skilling replied. He repeated a phrase he'd used before, that once a reserve was set aside, it was in a "lock box" and couldn't be tapped.
Several prosecution witnesses testified that they felt pressure from Skilling to use reserves to pad earnings when such funds were supposed to be used for specific expenses, like litigation costs.
During, prosecutor Sean Berkowitz displayed a chart for jurors that showed more than $1 billion in reserves were "available for earnings" in the spring of 2001. Skilling bristled and insisted the prosecutor misinterpreted the document.
On Thursday, Skilling explained that the $1 billion reserve increased to $1.3 billion by the end of the first quarter of 2001, reducing reported earnings, to prepare for risks and contingencies.
"The whole characterization of reserves as a cookie jar is demonstratively untrue," the ex-CEO said.
Skilling appeared refreshed Thursday after a grueling three days of cross-examination, from which he emerged looking tired. Skilling often simmered with tension as Berkowitz repeatedly challenged his truthfulness. He could face Berkowitz again Thursday after Petrocelli finishes questioning him a second time.
That tension dissipated when Skilling was back in his own lawyer's hands.
"Do you think you're so smart that you can fool this jury?" Petrocelli asked late Wednesday.
"Of course not," Skilling replied.
Skilling's testimony is expected to wrap up Thursday, and his co-defendant, Enron founder Kenneth Lay, is expected to begin testifying as early as Monday, said George Secrest, one of Lay's lawyers.
"He's waited a long time," Secrest said after court recessed for the day.
Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors from 1999 through 2001. Lay faces six counts of fraud and conspiracy that focus on his actions after Skilling abruptly resigned from Enron in mid-August 2001 through the company's descent into bankruptcy protection four months later.