accounting discussion post

Your discussion post should be a minimum of 10 sentences to earn full credit.  If you struggle to find content for your initial discussion post, try incorporating other parts of the chapter or other reading material.  There is a lot of material discussed in the chapter that can be related to your post.  Discussion posts will be graded on content and length.  To earn full credit, be sure to address the topic and meet the minimum length requirement.

As an accounting manager for a growing graphic design company you are responsible for preparing the monthly financial statements and presenting them to the owner for evaluation. Since you have implemented many fiscal controls and new computer systems, the company continues to show improvement to the bottom line and is experiencing net income growth that exceeds the industry average for your region. This is something to be proud of. Due to this fact, the owner would like to increase her compensation 40%. She feels she should be rewarded for this increased performance. As part of this discussion you need to inform her that you are experiencing cash flow problems and you may need to increase the line of credit at the bank in order to pay suppliers and meet payroll. The owner is shocked to find that profits are up and cash is down.

• What are some reasons that would explain this situation?
• How would you explain this to the owner?