Posted: January 26th, 2023

300 WORDS    Assume that you are the managerial accountant at Infostore, a manuf

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300 WORDS 
 
Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives, CDs, and DVDs. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because of poor cash flow management. On November 15, the purchasing department purchased excess inventory of CD raw materials in anticipation of the rapid growth of this product beginning in January. To decrease the company’s tax liability, the chief financial officer tells you to record the purchase of this inventory as part of supplies and expense it in the current year; this would decrease the company’s tax liability by increasing expenses. 
Required
In which account should the purchase of CD raw materials be recorded?
How should you respond to this request by the chief financial officer?

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