Glencoe Accounting

Chapter 13: Payroll Liabilities and Tax Records

Extend: Matter of Ethics

Money Shuffling

• Imagine that the president of a real estate development company asks you, his accountant, to reclassify some purchases from expenses to assets to make his financial position look stronger. He plans to use the adjusted financial statements to secure a loan for a new development project. He suggests that after the loan is secured, the entries can be reversed.
• Form discussion groups of three to four students. Discuss how you might handle this situation. Does it make a difference that the entries will be reversed?
• Prepare an outline of your course of action and the potential consequences of your choices.