How the accounting should have been done

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Assignment: Accounting

You own an automobile parts company and have been approached by a leading car manufacturer to supply parts to the company. How would you determine that the car manufacturer has a good record of servicing sales and paying its suppliers? What are the signs you would look out for in the financial statements for the possibility of bad debts? What are the advantages and disadvantages of allowing customers to make purchases on credit?

Task

We have been learning the proper GAAP way to record transactions. Chapter 3 discussed the adjusting process and impacts on the financial statements if the required adjusting entries were omitted. This week we are finishing the accounting cycle and the production of the financial statements. Research an article in an accounting or business publication about a real-world situation where the company accounting was not done properly. The article should discuss the details, the effects on the financial statements and on the stock price.

Question A. Summarize the details of the article.

Question B. Discuss what was not done properly and how the accounting should have been done. Relate this to the text learning.

Question C. Give the effects on the financial statements of the improper accounting and on the stock price.

Question D. Give your opinion of the situation and if the article left out anything else you would like to know to better understand the importance of proper accounting according to GAAP.

Reference no: EM133514233

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