09 Feb The Adjustment Process
Assume you are the controller of a small retail shop in your area, and the chief executive officer (CEO) has requested that you explain to them why the net income that you are reporting for the year is so low, when the CEO knows for a fact that the cash accounts are much higher at the end of the year than they were at the beginning of the year. Write a memo to the CEO to offer some possible explanations for the disparity between financial statement net income and the change in cash during the year.
You need to write a memo of at least 2-3 pages explaining the possible reasons for these discrepancies. You need however, to be specific in addressing only key factors without getting into the weeds.
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