Do you agree to the student answer to this question Buddy Dupree is the accounting manager for On-Time Geeks, a tech support company for individuals and small businesses. As part of his job, Buddy is responsible for preparing the company’s trial balance. His supervisor placed a “hard deadline” of Friday at 5p.m. for the completion of the trial balance. Unfortunately, Buddy was unable to get the trial balance to balance by the due date. The credit side of the trial balance exceeded the debit side by $3,000. To make the deadline, Buddy decided to add $3,000 debit to the vehicles account balance. He selected the vehicles account because it will not be significantly affected by the additional $3,000. Questions: Is Buddy behaving ethically? Why or why not? Who is affected by Buddy’s decision? How should Buddy have handled this situation? Businesses, proprietors, and or individuals, are entrusting that when someone is put into a position such as an accounting manager they are going to provide services that are ethical, professional and honest. As the Accounting Manager for ‘On-Time Geeks’, Buddy Dupree behaved unethically when he decided that he can disguise an unbalanced trial balance by mimicking the $3000.00 error. Buddy Dupree’s behavior was no different than theft. Warren, Reeve & Duchac (2018), Accounting – Chapter 2a-4 “Errors affecting the trial balance” tells us that the trial balance is not the final proof of the accuracy of the ledger but it is valuable because errors will affect the equality of the debit and credit. “The trial balance does not provide complete proof of the accuracy of the ledger. It indicates only that the debits and the credits are equal. This proof is of value, however, because errors often affect the equality of debits and credits.” When Buddy Dupree decided to add $3000.00 debit to the vehicle account, thinking in his deceitful mind that by doing so ‘would not affect the account,’ he created a devious problem for the stakeholders, the suppliers, the liability accounts and his coworkers who at some point will have to revisit his work, review the ledger, and find the error. Buddy should have notify his supervisor that he needs more time, he could have review the ledger for any possible entry error. He also could of try dividing the balance by 2 or 9 to verify that he did not enter a debit in the place of a credit or the other way around. He could have also recalculate, sometimes a slip of the finger and we selected an 8 number key instead of the 5 number key, buddy took the wrong choice that will not only have him loose his job but loose respect for himself.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Do you agree to the student answer to this question
Buddy Dupree is the
Questions:
- Is Buddy behaving ethically? Why or why not?
- Who is affected by Buddy’s decision?
- How should Buddy have handled this situation?
Businesses, proprietors, and or individuals, are entrusting that when someone is put into a position such as an accounting manager they are going to provide services that are ethical, professional and honest. As the Accounting Manager for ‘On-Time Geeks’, Buddy Dupree behaved unethically when he decided that he can disguise an unbalanced trial balance by mimicking the $3000.00 error. Buddy Dupree’s behavior was no different than theft. Warren, Reeve & Duchac (2018), Accounting – Chapter 2a-4 “Errors affecting the trial balance” tells us that the trial balance is not the final proof of the accuracy of the ledger but it is valuable because errors will affect the equality of the debit and credit. “The trial balance does not provide complete proof of the accuracy of the ledger. It indicates only that the debits and the credits are equal. This proof is of value, however, because errors often affect the equality of debits and credits.” When Buddy Dupree decided to add $3000.00 debit to the vehicle account, thinking in his deceitful mind that by doing so ‘would not affect the account,’ he created a devious problem for the stakeholders, the suppliers, the liability accounts and his coworkers who at some point will have to revisit his work, review the ledger, and find the error. Buddy should have notify his supervisor that he needs more time, he could have review the ledger for any possible entry error. He also could of try dividing the balance by 2 or 9 to verify that he did not enter a debit in the place of a credit or the other way around. He could have also recalculate, sometimes a slip of the finger and we selected an 8 number key instead of the 5 number key, buddy took the wrong choice that will not only have him loose his job but loose respect for himself.
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