Which of the following practices would not be considered ethical?
A)Failing to record an expense even though cash has been paid.
B)Recording 31 days of sales in April.
C)Using the cash basis of accounting.
D)Adjusting the accounts after a trial balance has been prepared.

Question

Quizplus · Accepted Answer

Since April only has 30 days,recording 31 days of sales would overstate revenue and net income for the month ended April 30;the sales earned on the 31st day would not have been earned during this time period.Expenses are recorded when goods/services are used,not necessarily when cash is paid.GAAP requires companies to use the accrual basis of accounting for external reporting,but small companies may use the cash basis,and the cash basis may be used for internal reporting.After the unadjusted trial balance is prepared,various accounts need to be adjusted to update the accounts.

Which of the Following Practices Would Not Be Considered Ethical