Homework Help: accounting1

Posted by butler on Tuesday, August 14, 2007 at 7:07am.

Your client is preparing financial statements to show the bank. You know that he has incurred a computer repair expense during the month, but you see no such expense on the books. When you question the client, he tells you that he has not received the official bill, although he knows the expense was $1,250. Your client is on the accrual basis of accounting. He does not want the computer repair expense on the books as of the end of the month because he wants his profits to look good for the bank. Is your client behaving ethically by suggesting that the computer repair expense not be booked until the official bill is presented? Are you behaving ethically if you go along with the client's request? What principle is involved here?

I think the situation is unethical and they would be breaking some company laws, i could not thnik of the correct words, please help ... thanks

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