Ashford University ACC 205 Week 1 DQ

Wk 1 DQ
DQ 1 Accounting and
the Business Environment

Accounting and the Business Environment. From Chapter 1, Ethical Issue 1-1,
page 59. Complete all parts of the case and respond to at least two of your
classmates’ postings.
Ethical Issue 1-1
The board of directors of Xiaping Trading Company is meeting to discuss the
past year’s results before releasing financial statements to the bank. The
discussion includes this exchange:
Wai Lee, company owner: “This has not
been a good year! Revenue is down and expenses are way up. If we are not
careful, we will report a loss for the third year in a row. I can temporarily
transfer some land that I own into the company’s name, and that will beef up
our balance sheet. Brent, can you shave $500,000 from expenses? Then we can
probably get the bank loan that we need.”
Brent Ray, company chief accountant:
“Wai Lee, you are asking too much. Generally accepted accounting principles are
designed to keep this sort of thing from happening.”
Requirements
1. What is the fundamental ethical issue
in this situation?
2. How do the two suggestions of the
company owner differ?

DQ 2 Recording
Business Transactions

Recording Business Transactions. Define the terms “debit” and “credit”. Explain
how debits and credits affect the following: assets, liabilities, owner’s
capital account, revenues and expenses. Respond to at least two of your
classmates’ postings