Forensic Accounting

Category - Specialized Forensic Knowledge

What are cookie jar reserves?
  1. Reserves related to owner’s equity
  2. Reserves allowed under accounting standards
  3. General reserves prohibited
  4. None of the above
Explanation
Answer: C - Cookie jar reserves are general reserves that are prohibited under accounting standards. These are disallowed under SFAS 5, which deals with ‘Accounting for Contingencies.’
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