Review the attached Safety-Kleen Corporation Mini Case.

Post a response to the following questions as a response to this post. Please give this some thought! I look forward to hearing your ideas and opinions on this case!

Discuss whether large adjustments, such as those included in this case, necessarily indicate improper accounting procedures.

What does the SECs document in paragraph 26 mean when it says three top executives improperly recorded several adjusting entries to capitalize operating expenses? Drawing on concepts presented in Chapters 2 and 3, explain why it is improper to record payroll expenses for marketing personnel as assets.

What accounting concept is violated by recording an expense for management bonuses when they are paid rather than when they are earned by managers? Why is Safety-Kleens accounting treatment of these bonuses considered improper?

On December 12, 2002, the SEC filed a lawsuit against four executives of Safety-Kleen Corp., one of the country's leading providers of industrial waste collection and disposal services. The primary issue was that the executives had directed others in the company to record improper adjustments in 1999 and 2000, which had the effect of overstating net income during those periods. The following table was included in the SEC's court documents to demonstrate the (combined) effect of proper and improper adjustments on net income. (All amounts are in millions.)