Kara Williams is the new controller for Colors, a designer and manufacturer of sportswear. Shortly before the
Question:
a. Postpone planned advertising expenditures from December to January.
b. Do not record sales returns and allowances on the basis that they are individually immaterial.
c. Persuade retail customers to accelerate January orders to December.
d. Reduce the allowance for bad debts (and bad debts expense).
e. Colors ships finished goods to public warehouses across the country for temporary storage until it receives firm orders from customers. As Colors receives orders, it directs the warehouse to ship the goods to nearby customers. The assistant controller suggests recording goods sent to the public warehouses as sales.
Requirement
Which of these suggested strategies are inconsistent with IMA standards? What should Williams do if Lucas insists that she follow all of these suggestions?
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