Summary Blog

http://news.cnet.com/8301-10784_3-9797171-7.html

Summary

This article is directly related to Chris’s article that he found. Microsoft had a deal with Bestbuy. Microsoft would promote Bestbuy if Bestbuy tricked their customers into signing up for Microsoft’s msn internet service trial. The customers were then charged when the trial ended. A California man then had the courage to sue the company for racketeer influenced and corrupt organizations act, or RICO for short. James Odom stated that at the point of service terminals they scanned a CD and said it was for inventory control, even though they had another way of counting inventory. In reality though, what they were actually doing was signing the customer up for the Msn internet trial. No customer got a complete refund and both companies deny and wrongdoing.

Connection

This article relates with everything the text had taught us about accounting; everything from sincerity to cold hard evidence. The Generally accepted accounting principals, or GAAP as many call it are basically what the text book is pushing on us, directly or indirectly. The Principle of Sincerity states that the accounting unit should reflect in good faith the reality of the company's financial status, but during this time Bestbuy and Microsoft have altered documents disproving this. The Principle of non-compensation says that one should show the full details of the financial information. Looking at the article the comparison is clear. The Principle of Prudence says that the company should show what reality really is. Again this scam breaks yet another GAAP. Finally one of the most important rules; The Principle of full disclosure/materiality says all information and values pertaining to the financial position of a business must be disclosed in the records. Even though they had this cheat written on paper, it really wasn’t what they said it was thus making what they wrote flawed.

Reflection

After reading the two articles I don’t feel safe buying from any store anymore. I’m the sort of person who always uses plastic to buy my things rather than money. Using a card seems safer but now it just feels like I could get cheated anytime anywhere. Thinking back it seems like a lot of people prefer using a credit or debit card over using pure cash. If you think about it a lot of people do use a card and BestBuy is a chain corporation world wide. Put one and one together and you get many people falling for this scam. I might not know how much the companies made off this, but I would guess somewhere in the millions just because of this one reason.

Chapter 16 Blog

http://www.rttnews.com/Content/BreakingNews.aspx?Id=879695&Category=Breaking%20News&SimRec=1&Node=B1

Summary

On Wednesday March 11, 2009, American Reprographics Co, which is a company that deals with business to business document management services, announced a company wide wages reduction of 5%. They also announced a 50% deduction from Suriyakumar, who is the chief executive officer. This company is doing this in an attempt to dodge some of the economic repercussions; an effort in cutting costs. The Walnut creek, a California based company, said that they are expected to produce an annual savings of 6 million or 0.08 per share. In this attempt of cutting costs they also plan to close down 50 locations during this year.

Connections

Cutting wages and various other costs would indeed be a good example of what we are learning in chapter 16. This chapter deals with a variety of tax refunds, tax payments and many other situations that we would probably see ourselves in the near future. Cutting wages would also cut how much the government earns of income tax thus decreasing the amount of money Canada has to spend. This wouldn’t just affect the government it would also affect many people in Canada. When paying some of the taxes, some of it goes to the Canadian pension plan, unemployment insurance and any other plans out there. If someone is making less than what they would normally make, then they have a less luxurious retirement fund.

Reflection

In my opinion I think what this company, American Reprographics Co, is doing is something that isn’t very healthy to the economy. Losing money would lower the consumer confidence level slowing down the economy. Most people also pay some sort of pension plan for their retirement and if less is going into that fund, or reserve, then as I have already said, their lives would not be as good as if they had not have this reduction in wages. But again if these companies weren’t to do this, they might go bankrupt and that would put people on the street and those people would be worse off then if they didn’t.

Accounting 12 - Chapter 15 Blog

http://money.cnn.com/news/newsfeeds/articles/marketwire/0477521.htm

Summary

Data I/O Corporation (NASDAQ: DAIO) is the leading provider of manual and automated device programming systems. With over 35 years of expertise, Data I/O delivers everything from automobile devices to wireless connectivity. To boot they are also a world wide corporation. On February 25, 2009 they announced the rescheduling of the company’s financial results for the forth quarter in 2008 to March 5, 2009. They claim that this is due to the postponement of their audit committee meeting to next week. The financial results will be released after the market closes the same day. This rearrangement of the financial results will definitely leave an impact on the investing market.

Connections

Chapter 15, a chapter about comparing financial statements, the above article is living and breathing proof that these concepts, built into the textbook, do really apply to real life situations. When released, this company’s financial results should contain the various numbers that both outsiders and insiders would use in order to make decisions about the future. Outsiders would use this information to collect taxes, see if this company is worth investing into, and also have the ability to tell if this company will do well in the future, or pay their loans. Insiders would obviously use this information as well. How well the company is doing, how much they are making, and if they are reaching their targets; these are just some of the questions answered in the financial results. Others could also use the information given to compare this company to other company’s, to see which is worth more to invest in.

Reflection

This company is one that is the future. This company delivers many electronic devices and will probably do fair on future fiscal periods due to poor consumer confidence. However, with my experience, I can foresee that in the fourth quarter of 2008, which is the one to be released in March, will do well. People might not be spending as much, but when our standard of living is going up everyday, maybe not in the next few years, people buy more of the little things that make their lives a little bit more exciting. Those little things bring us the happiest moments in our life, of course next to our family and friends.