Evaluating Performance
When comparing various divisions within a company, describe what problems can arise from evaluating divisions that have different accounting methods, as described in Chapter 11 of your text. Cite three examples of accounting methods that could cause divisions’ profits to differ. Your initial post should be 250 words.
Book is Managerial accounting: Decision making for the service and manufacturing sectors(2012). San Diego, CA: Bridgepoint Education
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One problem that can arise when using different accounting methods is inaccuracy in accounting. For instance, if one method uses a different method of the division then it could lead to skewed analysis (Schneider, 2012). In the same regard, the value of inventory, costs, and overhead can also be overstated or understated especially if there is a comparison between the methods. As a result, if the management utilizes different methods of accounting, then it is …
308 words APA