Scenario: You've just been hired as the assistant treasurer of a specialty retail chain of...
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Accounting
Scenario: You've just been hired as the assistant treasurer of a specialty retail chain of nine stores. Your main responsibility is to maintain the company's high credit rating by paying all bills when due and taking advantage of all cash discounts.
Your manager instructs you to continue preparing all checks "net of discount" and dating the checks the last day of the discount period. "But", he continues, "we always hold the checks for at least four days beyond the discount period before mailing them. That way we get another four days of interest on our money. Most of our creditors need our business and don't complain. If they do complain, we blame it on the mail room or the post office. We've only lost one discount of every hundred we take this way; I think everybody does it."
Discussion Requirements:
1. What are the ethical considerations in this situation?
2. Who are harmed or benefited?
3. Should you continue the prior practice regarding taking purchase discounts?
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