SuperMeds Corporation Develops a New Drug That Controls Severe Acne

question 49

Multiple Choice

SuperMeds Corporation develops a new drug that controls severe acne. The drug is not approved by the government for sale in the United States because one of its ingredients is a banned chemical. This chemical is not banned in Mexico. Whether it is ethical for SuperMeds to sell the drug in Mexico depends on​

• A) ​the effect of any "bad" publicity from the sale.
• B) ​the number of potential customers.
• C) ​which legal standards are applied.
• D) ​which ethical standards are applied.

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Definitions:

Loss Contingencies

Potential losses that may occur in the future and are recorded in financial statements if they are probable and can be reasonably estimated.

Accrue

The process of recording expenses and revenues that have been incurred or earned, respectively, but not yet received or paid, in order to reflect the true financial position of an entity.

Estimated Loss

An anticipated loss that a company might suffer due to various risks and uncertainties, and which is accounted for in advance.

Appropriation

The allocation or setting aside of funds by a company for a specific purpose or the restriction of retained earnings distributed to shareholders.