MCI had millions in “unapplied cash” sloshing around, waiting until someone could figure out how to apply it to the right accounts. One manager reported with pride that he had used this accounting gap to “clean up” about $4 million in bad debt accounts.3 This ploy worked because the following month, when the loose cash got properly assigned to the account of the customer who paid it, the old bad debt it was covering for would go back on the books as a spanking new balance that wasn’t even due yet.
