Assume You Are a CPA and the Accounting Manager of a Small

question 35

Essay

Assume you are a CPA and the accounting manager of a small privately-owned business that has three co-equal shareowners. Your company receives $1,000 from a cash sale of merchandise taken by the customer. Your boss tells you to recognize only $700 and put the other $300 in reserves. What would you do and say and why? Use ethical reasoning to support your position.

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Definitions:

Traditional Theory

This term encompasses theories that rely on established norms and practices, often contrasting with modern or contemporary theories.

Budget Line

All combinations of goods for which the total amount of money spent is equal to income.

Rational Producers

Producers who aim to maximize their profits or benefits by making decisions based on logical analysis and available information.

Input Prices

The costs associated with the purchase of the raw materials, labor, and other inputs required in the production of goods or services.