Below are some terms frequently used when discussing earnings management. Explain each term, describe under what circumstances management would likely use it, and given an example of how management might engage in this type of management. In your example, explain what accounts would be used and how.

A. Big Bath

B. Cookie jar reserves

C. Discretionary accruals.

D. Explain why researchers have to distinguish between discretionary and non-discretionary accruals when examining whether management uses accruals to manage earnings.