Guillermo Furniture Store Scenario Essay

615 Words Jun 20th, 2011 3 Pages
Guillermo Furniture Store Scenario

Accounting is a daily function in many areas in our lives. Whether it is budgeting in our homes, or business, accounting services are useful and necessary. Guillermo Navallez has a very successful furniture business near his home in Sonora, Mexico. In the 1990’s Guillermo’s business was facing new competition. Rising costs and falling prices were causing Guillermo’s profit margin to shrink (University of Phoenix Guillermo Furniture Store Scenario, 2011). In this paper discussion topics will include how Guillermo can use budget and performance reports in his decision-making process, how ethics can play a role in the process, and relevant accounting information in the decision-making process.
…show more content…
It is the application of values to decision making. These values include honesty, fairness, responsibility, respect, and compassion”. If Guillermo wants to compete with the competition currently threatening to put him out of business, he clearly has some ethical business decisions to make. He may have to consider cutting down his workforce replacing them with high-tech robotics. If the decision is made, Guillermo knows the impact it will have on his employees and their families in their tight knit community. Maintaining honesty and integrity in explaining to his employees why such measures are necessary is paramount. Guillermo will have to explain how through the use of robotics, products can be turned out more rapidly and accurately therefore allowing the business to profit on a higher scale.
Relevant Accounting Information All accounting information is relevant for businesses in the decision-making process. Guillermo can definitely benefit from scorekeeping. “Scorekeeping is the accumulation and classification of data” (Horngren, Sundem, Stratton, Burgstahler, & Schatzberg, 2008). Government tax filings, yearly income statements, cash flow statements, and balance sheets are necessary components of the scorekeeping process. All measures will allow Guillermo to keep track of all necessary accounting business functions.
Although budget and

Related Documents