Guillermo_Furniture_Store_Paper

Guillermo Furniture Store Scenario Antoine Cameron University of Phoenix Accounting ACC/561 Diane Rogers October 04, 2010 Guillermo Furniture Store Scenario Guillermo Navallez owns a furniture store near his home in Sonora Mexico. As of the present time Guillermo has been very successful with his business. Recently there has been competitors entering the furniture market nearby and can make the furniture with the same quality as Guillermo in half the time with new technology. Guillermo needs to use budgets and performance reports in his decision-making process to stay competitive in the market. Guillermo Decision Making Process Guillermo is faced with some tough decisions to keep his business afloat. Guillermo can use budgets and performance reports in his decision-making to “use the information for day-to-day operating decisions and for long-range strategic decisions” (Horngren, 2008, p. 5). Guillermo can also use the budget and performance reports to see which would be more profitable for him, to stay as only a furniture manufacturer, or move into the distribution side of the business. The scorekeeping can paint a clear picture for Guillermo to decide which way his business should move forward so he can be most profitable, whereas still maintaining the quality of life he wants. Ethics influence Accounting Decisions “Companies often rely on accountants to safeguard company ethics. Accountants have a special responsibility to make sure that managers act with integrity and that information disclosed to customers, suppliers, regulators, and the public is accurate. If accountants do not take this responsibility seriously, or if the company ignores the accountants’ reports, dire consequences can follow” (Horngren, 2008, p. 9). Guillermo ethics cannot be deterred by the state of his business. Guillermo could easily fudge numbers to make his company look better to larger companies trying to acquire the smaller companies. I believe Guillermo with stay ethically and morally strong because he has a couple of ideas to keep his company solvent. Relevant Accounting Information I believe the most relevant information Guillermo should consider is his budget data. Other companies are moving in and Guillermo needs to examine his monthly budget and his production numbers, to make sure he is turning a profit. Guillermo should take a look at his production numbers for March and see is it worth just focusing on manufacturing. If Guillermo decides to shift his business to distribution, then he can look at his assets and liabilities, and maybe sell some of his equipment since his production numbers would go way down. This could make his business even more profitable because he won’t have to budget for the upkeep of the equipment. Conclusion Guillermo’s business is in a phase which he has to make some decisions to keep his business profitable. Most companies today are faced with making tough accounting decisions when businesses changes, or when competition gets fierce. I believe it is important to scrutinize a company’s accounting numbers and always find ways to improve the company’s business no matter if the business is flourishing or not. Reference Horngren, C. T. (2008). Managerial Accounting, the Business Organization, and Professional Ethics. In Introduction to Management Accounting Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspxg