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Ethics and Accounting: Is Ashton's (Amy's) conduct ethical?

Ashton Martin (Amy Martinez) is a student who plans to attend approximately four professional events a year at her college. Each event necessitates a financial outlay of $100 to $200 for a new suit and accessories. After incurring a major hit to her savings for the first event, Ashton developed a different approach. She buys the suit on credit the week before the event, wears it to the event, and returns it the next week to the store for a full refund on her charge card.

1. Comment on the ethics exhibited by Ashton and possible consequences of her actions.
2. How does the merchandising company account for the suits that Ashton returns?

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Solution Preview

1. This is a very unethical practice that has ethical and economic consequences. If all people engaged in this same practice, we would easily where it would begin to have an effect on the economy. The ethical consequence primarily includes the fact that Amy essentially used the product, obtained full use from it, and returned it after it's use in an attempt to recover her money. In addition, we have to think of the next owner, who will likely be a ...

Solution Summary

This solution discusses why Amy's activities are unethical and provides the accounting treatment for the return in 292 words.