(essay) The owner of a company asks you if he can charge all his personal expenses to his business. He said that he owns the company anyway. Explain to the business owner the business entity assumption and the ethical considerations of his idea.
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(essay) The owner of a company asks you if he can charge all his personal expenses to his business. He said that he owns the company anyway. Explain to the business owner the business entity assumption and the ethical considerations of his idea.
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- The owner of a company asks you if he can charge all his personal expenses to his business. He said that he owns the company anyway. Explain to the business owner the business entity assumption and the ethical considerations of his idea.While meeting with a CPA, a new business owner finds out that the business is considered a pass-through entity. What does that mean? a) The profits of the business are taxed as income to the owner. b) The profits of the business are taxed as income to the company. c) The owner's personal assets are not at risk even if the business fails. d) The business will only have a few employees.Question:Prepare a reflection paper that incorporates your answers to the following independent questions: 1. What problems can you foresee if a business manager does not have a basic knowledge of accounting? 2. The owner of a company asks you if he can charge all his personal expenses to his business. He said that he owns the company anyway. Explain to the business owner the business entity assumption and the ethical considerations of his idea. 3. After examining the financial statements, the owner of a small business expressed surprise that the firm's cash balance had decreased during the month even though there was substantial net income. Do you think this owner is right to expect the cash to increase because of a substantial net income? Why or why not? 4. Jiffy Trading runs 10 branches and pays for a variety of expenses. Anna, the Accounts Payable Clerk of Jiffy Trading writes the checks for each supplier and the Accounting Manager signs the checks. Anna decided she…
- Hudson Signs, Inc., needs funds, and Alley Hudson, the president, has asked you to considerinvesting in the business. Answer the following questions about the different ways that Hudsonmight organize the business. Explain each answer.a. What forms of organization will enable the owners of Hudson Signs, Inc., to limit theirrisk of loss to the amounts they have invested in the business?b. What form of business organization will give Alley Hudson the most freedom to manage the business as she wishes?c. What form of organization will give creditors the maximum protection in the event thatHudson Signs, Inc., fails and cannot pay its debts?Comment on the performance of Bart D’Souza’s company. How is the company doing? He is working at this business part-time. Should he quit his other job and work at this full-time? Should he do the opposite – and exit the business? Or, should he stay the course and see how things unfold? What other kinds of information might you want to know to answer these questions?You are a lawyer who has her own business. You buy a Mercedes convertible that you use primarily to take trips to the beach and vacation get - aways. You claim it as a business expense because you drive a client to lunch once a month. Which accounting principle does this violate? Objectivity Concept Unit of Measure Concept Business Entity Concept Cost Concept
- Two of your friends, Sony and Ted, are planning on starting a new business. Knowing you are studying accounting they come to you for advice as to the best business form they should use for their business. They want to be able to raise capital; they also want protection against claims by creditors. As an accounting student: What business form would you recommend to Sony and Ted for their business? Why?A close friend of yours, who is a history major and who has not had any college courses or any experience in business, is receiving the financial statements from companies in which he has minor investments (acquired for him by his now-deceased grandfather). He asks you what he needs to know to interpret and to evaluate the financial statement data that he is receiving. What would you tell him?Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The managementof Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussingthe audit fee, Allnet’s management suggests a fee range in which the amount depends on thereported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. What are the ethical factors in this situation? Explain.
- Tana Thorne is an accountant who aspires to become a partner in a public accounting company. Thorne is invited by Allnet Company's management to submit a proposal to audit Allnet's financial accounts. When considering the audit charge, Allnet's management offers a price range based on Allnet's reported earnings. The more the profit, the greater the audit fee payable to Thorne's business. What ethical considerations apply to this situation? Explain.What kind of support will Salem provide to his company for the professional accountants ethics code?In each case below, I have given a goal that a business might have. What you need to do is to indicate for each whether the goal can better be achieved if the business is organized as a sole proprietorship or as a corporation. goal: to minimize taxes on profits of the business goal: the ability to freely transfer ownership interests in the business