In the Making Ethical Decisions box titled "Would You Cook the Books?" the situation provides the student with an ethical dilemma that might present itself to an accounting professional. The story focuses on: Is it ethical to __________________________
A) transfer long-term liabilities on the balance sheet to the balance sheet of a secondary firm?
B) inflate the values of assets on the Balance Sheet?
C) account for sales and profits at a time period, before or after the time these sales and profits actually occurred?
D) change one's method of accounting for inventory during the same fiscal year?

Question

Quizplus · Accepted Answer

It is unethical to account for sales and profits at a time period, before or after the time these sales and profits actually occurred. This is a form of financial statement fraud and can mislead investors and stakeholders. Transferring long-term liabilities, inflating the values of assets, or changing the method of accounting for inventory may also be unethical if done with the intent to deceive or mislead stakeholders.

In the Making Ethical Decisions Box Titled "Would You Cook