Problem - Adjustments are very important in accrual-based accounting in ensuring that the balances of accounts are correct before preparation of the financial statements. In this Discussion, you will look at adjustment data and how it affects the integrated financial statement framework.
Assume that you and two friends are debating whether to open an automotive and service retail chain that will be called Auto-Mart. Initially, Auto-Mart will open three stores locally, but the business plan anticipates going nationwide within 5 years.
Currently, you and your future business partners are debating whether to focus Auto-Mart on a "do-it-yourself" or "do-it-for-me" business. A do-it-yourself business emphasizes the sale of retail auto parts that customers will use themselves to repair and service their cars. A do-it- for-me business emphasizes the offering of maintenance and service for customers.
Address the following questions:
Should Auto-Mart implement a do-it-yourself or do-it-for-me business emphasis? Support your selection with analysis and details.
List the advantages and disadvantages of each emphasis and arrive at a conclusion as to which emphasis to implement.
Provide examples of a real-world business that uses a do-it- yourself or do-it-for-me business emphasis? In your opinion, which is most profitable?