Your friend works part-time at a local company. He is concerned about some of the practices he has observed and asks for your advice. “! was surprised to see the sales manager agree to open a new credit account over the phone. When | asked him about that, he said: “We have been trying to get that account for years. | couldn’t keep them waiting. Then when | was working in the warehouse, the employees would sometimes accept returns from customers’ trucks. They just wrote a note on the customer's invoice. Then | was talking to the bookkeeper about uncollectible accounts, and she said:

‘Handling a bad debt is easy. | just press the delete button on my computer’ She also told me she hates the new year because that is when the company president makes her write off all the receivables. He never wants to do them at the end of the year because he says they will affect that year’s performance. She also said that it upsets her to think of all the previous year’s sales that are now not going to be paid for.”

Required: Write a short report outlining the advantages and disadvantages of the activities your friend observed. For each situation, explain what policy you would recommend. TYK-1