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Advanced Placement (AP)

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1. Understand the reporting effect: What is the effect on income before taxes of the sales transaction requested by the CFO?
2. Specify the options: If Jim does not record the sales transaction requested by the CFO, what is the effect on total assets and income before taxes of the inventory write-down?
3. Identify the impact: Are investors and creditors potentially harmed by the CFO's suggestion?
4. Make a decision: Should Jim follow the CFO's suggestions?

1 Understand The Reporting Effect What Is The Effect On Income Before Taxes Of The Sales Transaction Requested By The CFO 2 Specify The Options If Jim Does Not class=

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