Net income of john and sue a hardware store that decreased in 2002 Mike Sneed the owner thinks he will need a loan in 2003 from a bank, late in 2002 he tells his accountant to record a $10,000 sale of furniture to his family even if the merchandise won't be sent from the company until January 2003 he tells his a accountant make these adjusting entries for December 2002, salaries to his workers $900 prepaid insurance that has lapsed $400 why is he taking this action and is this ethical and why telling which persons it helped and the persons it hurts by this being done.
Ethics in accounting and financial decision making
Financial Accounting is the information accumulation, processing, and communication system designed to meet the decision-making needs of external users, including actual and potential investors, creditors, employees, and the general public.
This action is unethical because accounting is the means by which information about an enterprise is communicated and, thus, is sometimes called the language of business. Costs, prices, sales volume, profits, and return on investment are all accounting measurements. Accountants summarize this information in a balance sheet, income statement, and statement of cash flows. The statement of cash flows provides information about cash receipts and cash payments of an entity during a period. ...
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