A very important client, Bob, is in town and his expenses are being covered by X
ID: 389790 • Letter: A
Question
A very important client, Bob, is in town and his expenses are being covered by XYZ company. This client controls a large portion (over 50%) of the business XYZ company does each year. When he submits his expense report, John, the accounts payable manager, discovers a rather expensive line item for a "gentlemen's club" that has been known to be involved in illegal activities. This is an expense that the XYZ company handbook explicitly states that it doesn't cover. Should XYZ company cover the line item or not? Explain your answer.
Explanation / Answer
Yes, XYZ company should cover the line item because the line item consists of a variety of things which if ensured properly can lead the business towards great success.
The line item keeps a check on XYZ company's spendings by grouping financial statement items into cost centers and departments.
Moreover, the line item avoids any kind of confusion by displaying proper detail of expenses, profits, sales costs, revenues, etc. effectively in the line item for XYZ company.
The transmission adjacent line item is a moderate line item that covers the transmission services and other third party services smoothly.
The delivery service line item is concerned with covering the total time consumed in delivering the service. It's also covers manufacturing, repairing and upgrading activities along with other billing and administrative costs that are incurred while delivering a service.
In nutshell, XYZ company should cover the line item because it can assist it in knowing whether it's able to cover its expenses through its income or not. Further, it will also provide data to save ample amount of money effectively.