Conducting merchandising activity


You are the owner of a retail store conducting merchandising activity. You need to go to the bank for a loan and know that your profits are too low and the bank will probably deny your request. In what ways can you manipulate your income statement and your balance sheet to falsely show increased profit that is, net income. Be specific as to the how you would accomplish this. Keep in mind that the net profit on the income statement ends up on the balance sheet in retained earnings so you have to make adjustments to both and also possibly the cash flow statement so it all ties together and balances. List at least four different ways.

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Accounting Basics: Conducting merchandising activity
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