ACC 201 -- Week3 Assignment3

ACC 201 -- Week3 Assignment3 - his financial statements...

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GAAP & Ethics 1 Ashley Dyal ACC 201 Ms. Rayford February 26, 2011
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GAAP & Ethics 2 When it comes to the scheme that Mr. Blowhard has pulled on his own company all he has done is hurt his actual earnings. He has made the profits seem quiet high but this is a false pretense to true earnings. When and if the company sells the purchaser will then have to rebuy the all the lines that were recently sold in order to expand properly. This will in the end cause a huge deficit to the new company that was truly unneeded. With a huge deficit in expenses right off the bat there may the chance of collapsing the business from shortly after the purchase. The ethics that Mr. Blowhard used in this were wrong because he only temporarily improved his business and is leaving the issue for a later owner to fix if he plans to expand and make successful profits. It will for sure make
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Unformatted text preview: his financial statements unbalanced for the assets will become heavy once the assets are received leaving the expenses to be very light in weight. The ways he could adjust his improper actions is by using the cash basis accounting method. This would allow for things not to fully match up and no questions to really be asked. He could also use various inventory cost flow methods such as FIFO, LIFO and weighted averages. This would allow for the best option to used in order to benefit the Communication business the best. In the end Mr, Blowhards scheme could be covered up in many ways, but in the end he is really hurting his business and scamming someone into buying something that isnt true in its financial records. GAAP & Ethics 3 References Edmonds, T., Olds, P., McNair, F., & Tsay, B. (2010). Survey of accounting (2nd ed.). New York : McGraw-Hill Irwin...
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This note was uploaded on 04/18/2011 for the course ACC 201 taught by Professor Alao during the Spring '10 term at Ashford University.

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ACC 201 -- Week3 Assignment3 - his financial statements...

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