______________ accounting comes from the concept that management can manipulate the financial results of a company by adding or taking away reserves depending on the circumstances.
A) Hypothetical
B) Lease accounting
C) Cookie jar
D) Virtual

Question

Quizplus · Accepted Answer

Cookie jar accounting refers to the practice of adjusting financial reserves to manipulate future financial results. This can be done in order to smooth out earnings, so that profits remain consistent over time, or to create a reserve for future losses that will help to cushion the company's financial position in rough times. This can be misleading to investors, as it hides the true financial health of the company.

______________ Accounting Comes from the Concept That Management Can Manipulate