Chapter_4_Solutions - Chapter 4 - Selected Solutions LO 1...

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Chapter 4 -- Selected Solutions LO 1 SD 3 Although an accountant facing a deadline may find it frustrating and potentially embarrassing to admit that the trial balance will not balance, it is unethical to compound one error by introducing another error. The consequences to the in- dividual and the company of covering up a problem can be worse than the initial embarrassment. For instance, the fact that the adjusted trial balance is off by $1,320 does not necessarily mean that the error is limited to that amount. There may be two or more larger errors that offset each other, and they may have sig- nificant impact on the financial statements. Also, it could prove embarrassing to the company and damage relations with the bank if the bank were to discover the error and conclude that the company was trying to cover up aspects of its performance. The best thing for Jay to do would be to go to the chief accountant and disclose the problem. With help, Jay may find the error. If not, preliminary
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This note was uploaded on 12/10/2009 for the course BUS 311 taught by Professor Fas during the Spring '09 term at American University in Bulgaria.

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Chapter_4_Solutions - Chapter 4 - Selected Solutions LO 1...

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