QUESTION 1 1. You are the new controller for the consumer


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QUESTION 1 1. You are the new controller for the consumer division of XYZ Company. In the past five years, XYZ’s earnings have grown by at least 15% annually, with the consumer division’s earnings growing by over 20% annually over the same time-period. In the 4th quarter of the current year, however, it is projected that consumer’s income will grow by 8% and XYZ’s will grow by 10%. The consumer division’s president wants you to take some of the following “end of the year” actions in order to improve consumer’s reported earnings. Under the previous controller, these types of actions were more or less taken as acceptable practices. Deferring routine monthly maintenance on equipment by an outside vendor until January. 2. Extending the close of the fiscal year beyond December 31 so that some sales from next year are counted in the current fiscal year. 3. Altering dates on shipping documents so that sales made in January of the next year appear to have occurred in December of the current year. 4. Giving salespeople a double bonus to exceed December targets. 5. Reducing the number of December advertising spots and increasing the number to be run in January. 6. Deferring advertising costs by asking the outside advertising agency to delay sending out bills for December advertisements until January or by having the agency indicate that advertisements run in December were run in January. 7. Persuading customers to accept merchandise for shipment in December that they would normally not order until the following year. sonelauguste15
posted a question · Feb 21, 2016 at 3:40pm

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