Recognizing more bad debt expense in a year than is necessary in order to have flexibility in recognizing bad debt expense in a future year is an example of
A) a big bath charge.
B) a cookie jar reserve.
C) creative acquisition accounting.
D) premature recognition of revenue.

Question

Quizplus · Accepted Answer

A cookie jar reserve involves overestimating expenses in one period to create reserves that can be used to boost profits in future periods.

Recognizing More Bad Debt Expense in a Year Than Is