Please list The potential accounting errors or operating problems that might have caused the unexpected fluctuations for each of the accounts below: 1. COGS-Change in COGS larger than change in sales. COGS increasing faster than sales. Still profitable but it could be a troubling sign if trend continues. May not stay profitable for long 2. WARRANT EXPENSE- why warranty expense can be increased? 3. Interest expense- Why is it important to confirm that if interest expense declined, debt must be also decreasing? 4. Income before taxes- declining 5. Income tax expense-declining 6. Net income-net income and gross profit decreased 7. Cash-drastic increased and then declined in another year 8. Accounts Receivable-Increased year to year 9. Prepaid expensed-Sudden decrease and then sudden shoot
Please list The potential accounting errors or operating problems that might have caused the unexpected fluctuations for each of the accounts below:
1. COGS-Change in COGS larger than change in sales. COGS increasing faster than sales. Still profitable but it could be a troubling sign if trend continues. May not stay profitable for long
2. WARRANT EXPENSE- why warranty expense can be increased?
3. Interest expense- Why is it important to confirm that if interest expense declined, debt must be also decreasing?
4. Income before taxes- declining
5. Income tax expense-declining
6. Net income-net income and gross profit decreased
7. Cash-drastic increased and then declined in another year
8.
9. Prepaid expensed-Sudden decrease and then sudden shoot
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
