Ethical issue Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price. Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept. To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

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Answer 5

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

Answer 6

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

Answer 7

Chapter 3, Problem 3.7BYP

(a)

To determine

Ethical issue

Company R is recording the adjustment entries in order to show the profits in the current year. It will help in maintaining the price of stock at an above level. President of the company decides this accounting treatment due to change in legislation by the government. The action taken by the government affects the sales of the company. President of the company decides to change the accounting records in order to nullify the effect of legislation on stock price.

Adjusting entries: Adjusting entries are the entries that are recorded by the corporation to changes its accounting records into the accruals concepts. Before issuing the financial statement, the corporation is required to adjust the income statement and balance sheet is updated on the accrual concept.

To determine: The stakeholders of the organization which are affected by the variation in the legislation related to products.

Answer 8

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

Answer 9

(b)

(1)

To determine

The ethical issues raised in the situation of change in legislation according to the request of the president.

Answer 10

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

Answer 11

(2)

To determine

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

Answer 12

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

Answer 13

(c)

To determine

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 3 - Prob. 1Q Ch. 3 - Prob. 2Q Ch. 3 - Prob. 3Q Ch. 3 - Prob. 4Q Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - 7. Why may a trial balance not contain up-to-date...Ch. 3 - Prob. 8Q Ch. 3 - Prob. 9Q Ch. 3 - Prob. 10Q

The ethical issues raised in the situation of change in legislation according to the request of the president.

The ethical issues raised in the situation of recording the adjusting entries according to the request of the person M.

It is ethical to accrue the revenues and defer expenses to another year to which such revenues and expenses do not relate.

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