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    Accounting

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    The net income of Simon and Hobbs, a department store, decreased sharply during 2000. Carol Simon, owner of the store, anticipates the need for a bank loan in 2001. Late in 2000, Simon instructs the store's accountant to record a $10,000 sale of furniture to the Simon family, even though the goods will not be shipped from the manufacturer until January 2001. Simon also tells the accountant not to make the following December 31, 2000 adjusting entries:

    -Salaries owed to employees: $900
    -Prepaid insurance that has expired: $400
    -Why is Simon taking this action? Is her action ethical? Give your -reason, identifying the parties helped and the parties harmed by Simon's action.

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    Solution Preview

    Simon's actions are not ethical at all. Net Income of Simon and Hobbs is decreasing, thus the actions that Simons is taking is to boost its net income.

    The $10,000 sale of furniture will appear as a source of revenue and will increase the top ...

    Solution Summary

    The solution does a great job of explaining the question being asked. The answer is brief and concise and is very easy to understand for anyone looking for a basic understanding of this topic. Overall, an excellent response to the question being asked.

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