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You are Julia, a new Accounts Receivable Clerk for Nixon Paper and Office Supply. Toward the end of the month, Carol Reed, a very personable sales associate, tells you that the previous A/R clerk always recorded a Sales Invoice when she got a verbal agreement from a customer to buy paper or office supplies. She has a verbal order from her favorite customer for $10,000 of paper and wants you to make a Sales Invoice today.
You know that in order to make a Sales Invoice you need a purchase order from the customer. You also know that Ms. Reed receives a monthly bonus based on the monthly sales. If her sales are above $20,000, she gets a 10 percent bonus.
Question 1: Would you agree to record the sales of products before receiving the purchase order from the customer? What effect would it have on the customer, on the Sales Associate, on the company, and on the job?
Financial Statement Analysis and Preparation
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Computation of Free Cash Flow
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