I was having lunch with my boss, Dave, and my co-worker, Christy. Christy is in Accounting. They are talking about a Clearance Sale that our Public Relations department is offering to our members on some older publications. Christy encouraged it, saying the products were expensed two years ago, so anything they earned on the sale was a bonus.
“But,” I said, meekly. “I thought I learned in my Accounting class that you have to record the Cost of Goods Sold at the time you record the Revenue.”
Christy looked at me. “We don’t do it that way.”
I scowled at her. Then thought for a minute. We are a non-profit. We don’t sell things for the purpose of making money. “Wait. Is that because we don’t actually book the publications as Assets?”
“Yes,” she replied.
I was all pleased with myself. Christy turned to Dave and said, “This is the problem with educating employees. They start to ask questions.”