Is Buddy behaving ethically? Why or why not?Who is affected by Buddy’s decision?How should Buddy have handled this situation?

No buddy is not behaving ethically because the principles of accounting are not applied in…

Answered: Is Buddy behaving ethically? Why or why…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Is Buddy behaving ethically? Why or why not?
Who is affected by Buddy’s decision?
How should Buddy have handled this situation?

Expert Solution

Step 1

No buddy is not behaving ethically because the principles of accounting are not applied in preparation of trial balance and it is adjusted just to meet the deadline.

The trial balance is prepared on double entry concept and the debits and credits have to match. There should not be any manual adjustment in preparation of trial balance of the firm just to meet the deadline of reporting.

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