... late in the quarter and earnings appear to be falling short of last quarter's. * Borrow sales from next quarter --contact customers and offer a substantial discount if they place orders this quarter --acquire a small firm with good earnings that you can consolidate into yours How to smooth earnings-downfalls * Raise expenses --Invoke non essential expenses like training programs, etc --Begin required maintenance sooner than planned. * Rainy Day Reserves --When should revenue be recognized? 1. Relative easy for the firms to account for bad debts losses and returns of detective items 2. More difficult to deal with contingent sales agreements 3. There can be big problems with "new economy" firms like software sellers Loading the Distribution Channel --The firm persuades its customer to purchase more now than it needs by offering better credit terms. --But more now means less later. --With a more generous discount it may mean less now and less later. --When should expenses be recognized? 1. The firms managers may decide that ...

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