The "cookie jar reserves" earnings management technique involves ________.
A)increasing earnings in the current period in anticipation of significant future decreases
B)decreasing losses in the current period to allow the firm to show increased net income in the future
C)increasing earnings so as to increase managers' compensation
D)increasing losses in the current period to allow the firm to show increased net income in the future

Question

Quizplus · Accepted Answer

The "cookie jar reserves" technique involves increasing losses or setting aside reserves in the current period, which can be reversed in future periods to inflate earnings and show increased net income.

The "Cookie Jar Reserves" Earnings Management Technique Involves ________