In the Making Ethical Decisions Box Titled "Would You Cook

question 354

Multiple Choice

In the Making Ethical Decisions box titled "Would You Cook the Books?" the situation provides the student with an ethical dilemma that might present itself to an accounting professional. The story focuses on: Is it ethical to __________________________

• A) transfer long-term liabilities on the balance sheet to the balance sheet of a secondary firm?
• B) inflate the values of assets on the Balance Sheet?
• C) account for sales and profits at a time period, before or after the time these sales and profits actually occurred?
• D) change one's method of accounting for inventory during the same fiscal year?

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Definitions:

Cash Flows

This refers to the net amount of cash being transferred into and out of a business, especially in the context of operating, investing, and financing activities.

Financial Statement

A written record that conveys the business activities and financial performance of a company, commonly including balance sheet, income statement, and cash flow statement.

Dividends Declared

This is the amount of earnings a company's board of directors decides to distribute to shareholders in the form of dividends.

Income Tax Expense

The amount of expense that a company reflects on its income statement due to federal, state, and foreign income taxes.