Forensic Accounting

Category - Specialized Forensic Knowledge

Which of the following best describes a cookie jar in relation to accounting standards?
  1. Revenue scheme
  2. Reserve scheme
  3. Credit scheme
  4. Corporate management scheme
Explanation
Answer: B - Cookie jar is a reserve scheme that is generally not allowed under the general accounting standards. This scheme is applied in its various forms, but in essence, the accounting standards does not allow the use of this reserve scheme to be incorporated within the financial statements. All the others including revenue scheme, credit scheme and the corporate management scheme has nothing to do with the cookie jar scheme.
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