Thursday, March 10, 2011

Everything in its proper place

One of the really basic accounting ideas is to properly classify expenditures. Should I capitalize or expense this item? Is it a sales or administrative expense? Etc. Unless you do properly classify expenditures you really can't tell just where you are. Yet, another agency within DoD, Tricare Management Activity, has that problem; it misclassified 91% of its $102,709,000 outlays. How can one manage in such circumstances?

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