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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

You are preparing a post-closing trial balance for the company where you work, but it doesn’t balance. You are tired, and besides, you don’t think the company pays you for this much hassle and extra time. You decide to increase the balance of an asset account to make the totals balance. Discuss this action and explain whether it is ethical or illegal.

To determine

Explain whether the decision to increase the balance of an asset account to balance the unbalanced post-closing trial balance, is ethical or legal.

Explanation

Post-closing trial balance: Post-closing trial balance is a summary of all the asset, liability, and capital accounts and their balances, after the closing entries are prepared. So, post-closing trial balance reports the balances of real or permanent accounts only.

It is both unethical and illegal to increase the balance of an asset account to balance the unbalanced post-closing trial balance...

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