Introduction:
This examination must address your utilization of ethics in considering and basic leadership and your potential for struggle in circumstances with individuals who have distinctive translations of moral conduct.
According to the Ethics Awareness Inventory [EAI] (Williams Institute for Ethics and Management [WIEM], 2003), Moral viewpoint is well on the way to be founded on commitment, and least liable to be founded on value. In this paper, I will apply the consequences of this inventory to my own and expert improvement, clarifying how my instructive experience has molded my moral reasoning, tending to my utilization of ethics in considering and basic leadership, and examining my potential for struggle in circumstances with individuals of various moral points of view. The EAI states that my moral point of view depends on "a person’s obligation or commitment to do what is ethically right".
To discuss:
Why is the store manager reluctant to admit that these computers have little sale value?
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Cornerstones of Financial Accounting
- Ethics and Inventory An electronics store has a large number of computers that use outdated technology in its inventory. These computers are reported at their cost. Shortly after the December 31 year end, the store manager insists that the computers can be sold for well over their cost. But the stores accountant has been told by the sales staff that it will be difficult to sell these computers for more than half of their inventory cost. Required: What are the consequences for the business of failing to recognize the decline in value?arrow_forwardWhy should the person in charge of cash receipts not also be in charge of keeping the aAssume you're the assistant controller at a bookstore that's run by an independent bookseller. Manual, periodic inventory updating, physical counts at year end, and the FIFO technique for inventory costs are all used by the firm. How would you tackle the question of whether or not the organization should move to computerized perpetual inventory updating? Can you make a compelling case for the advantages of perpetual? Explain.ccounts receivable records? Explainarrow_forwardItems Included in Inventory The following are several items that Golosow Companys controller has questioned regarding their inclusion in inventory: a. An invoice has been received for goods ordered. The goods were shipped FOB destination but have not been received. b. Purchases have been ordered and received (shipping terms were FOB destination), but no invoice has arrived. c. Product was shipped to a customer today, FOB destination, and the invoice mailed. d. Purchases are in the receiving department, but they are damaged and will be returned. e. Product is in the shipping department, and the invoice has not been mailed to the customer. Shipping terms are FOB shipping point. f. Golosow has inventory in its possession from Tate Company. The inventory is to be sold by Golosow under a consignment arrangement with Tate. Required: 1. For each of the preceding items, indicate whether Golosow should include them in inventory. Justify your answer. 2. Next Level Describe the basic criterion for including items in inventory.arrow_forward
- A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure? A. No changes would be made since the person paying the bills is different from the person ordering the inventory. B. The person in accounts payable should generate the purchase order. C. The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received. D. The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.arrow_forwardWares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded tooffer a wide variety of home decorating products through its six stores across the state. After someinitial problems with stock control, it installed a new automated inventory system in April this year.The system replaced another automated system that had been modified so often over the years thatthe auditor had advised Wares’ management that they did not regard it as reliable. That is, theauditor was unable to rely on the old system sufficiently to assess control risk for inventory as anythingless than high.Required:a) Explain the normal process an auditor would expect to find in the client’s systems governingchanges to computer programs. Why is an auditor concerned about program changes? b) Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence aboutthe performance of the inventory control system from every month in the year or from a sampleof…arrow_forwardHardcase Luggage Shop is a small retail establishment located in a large shopping mall. This shop has implemented the following procedures regarding inventory items:a. Because the shop carries mostly high-quality, designer luggage, all inventory items are tagged with a control device that activates an alarm if a tagged item is removed from the store.b. Because the display area of the store is limited, only a sample of each piece of luggage is kept on the selling floor. Whenever a customer selects a piece of luggage, the salesclerk gets the appropriate piece from the store’s stockroom. Because all salesclerks need access to the stockroom, it is not locked. The stockroom is adjacent to the break room used by all mall employees.c. Whenever Hardcase Luggage Shop receives a shipment of new inventory, the items are taken directly to the stockroom. Hardcase’s accountant uses the vendor’s invoice to record the amount of inventory received.State whether each of these procedures is appropriate…arrow_forward
- Ethics Case Electronics, Inc. is a high-volume, wholesale merchandising company. Most of its inventory turns over four or five times a year. The company has had 50 units of a particular brand of computers on hand for over a year. These computers have not sold and probably will not sell unless they are discounted 60 to 70%. The accountant is carrying them on the books at cost and intends to recognize the loss when they are sold. This way, she can avoid a significant write-down in inventory on the current year’s financial statements. 1. Is the accountant correct in her treatment of the inventory? Why or why not? 2. If the computers cost $1,000 each and their market value is 40% of their cost, journalize the entry necessary for the write-down. 3. In groups of three or four, make a list of reasons why inventories of electronic equipment might have to be written down.arrow_forwardExplain inventory overstatement. A merchandising company has asked you to advise it on how to detect fraudulent financial reporting. Management wants your help in detecting inventory overstatement. Further, management wants to know how to find evidence of inventory overstatement. Using your own numbers, make up an example to show management the effect of overstating inventory. Show how inventory overstatement at the end of Year 1 carries through to the beginning inventory overstatement in Year 2. Prepare a brief report to management suggesting ways management could detect inventory overstatement.arrow_forwardFirst In, First Out Suppose you are the assistant controller for a retail establishment that is an independent bookseller. The company uses manual, periodic inventory updating, using physical counts at year end, and the FIFO method for inventory costing. How would you approach the subject of whether the company should consider switching to computerized perpetual inventory updating? Can you present a persuasive argument for the benefits of perpetual? Explain.arrow_forward
- Assume you're the assistant controller at a bookstore that's run by an independent bookseller. Manual, periodic inventory updating, physical counts at year end, and the FIFO technique for inventory costs are all used by the firm. How would you tackle the question of whether or not the organization should move to computerized perpetual inventory updating? Can you make a compelling case for the advantages of perpetual? Explain.arrow_forwardInventory management is an important aspect of retail strat- egy. For example, it is important to know when it is time to reorder and how much to order at a time, a metric called re- order point. As consumers buy a product day after day, the inven- tory level declines. The question for retailers is how low they should allow the inventory level to dedine before they place an order; that is, when is the optimal time to reorder? If you order too late, you take a chance of losing sales because you are out of stock. If you order too soon, consumer tastes may change, and you will be stuck with excess and unsellable mer- chandise. And generally, retailers do not want more inventory on hand than is necessary to avoid stock-outs because inven- tory ties up cash. Hence, the decision of when to order and how much to order is critical to a retailer's bottom line. The simplest formula to determine the reorder point is the following: Reorder point x Usage rate + Lead time Usage rate is basically how…arrow_forwardNeed Help on the following question. Question #1 You have been hired by the CEO of a soon-to-be-opened bookstore to develop procedures to help control inventory. List, describe, and defend four procedures you recommend be implemented to control inventory. As part of your response, be sure to describe any potential costs associated with these procedures.arrow_forward
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