Ethics in Accounting Name Professor Course Institution Date Improper Bank Reconciliation and Accounting Systems Transaction done in any enterprise has to pass through various recording entries of the enterprise for them to be verified ascertained and be recognized. In case a transaction is made whether receivables or payable first it is recorded in the original book of entry which is known as the journals. The general ledger gets it information which isclassified. Tabulated and organized in a presentable format. Inanother word the general ledger is the final book of entry which gives the status of the enterprise performance and financial health attributes. The case of Linebarger Company which is on the trail of too late. One is to communicate with the customer that whenever a payment is made an information be conveyed immediately to the company. Also checks should use the fastest means to get to the company premises to avoid delay by the postal process. Such means may include personal delivery. The second measure is to effect changes in the internal procedures by often reconciling bank and cash account to get the true picture of the company performance in the financial information. Withthe adoption of the above recommendations the company will have salvaged an upcoming misery and avert lethal consequence’s that can trail the company down to its knees if not closely monitored and evaluated. [...]
Instructions: Read the following scenario. Answer the questions that follow. Your answers should result in a 2-3 page submission. Reference back to your text book for guidance on how to think through the scenario. Scenario: Imagine you are the assistant controller in charge of general ledger accounting at Linbarger Company. Your company has a large loan from an insurance company. The loan agreement requires that the company’s cash account balance be maintained at $200,000 or more, as reported monthly. At June 30, the cash balance is $80,000. You give this update to Lisa Infante, the financial vice president. Lisa is nervous and instructs you to keep the cash receipts book open for one additional day for purposes of the June 30 report to the insurance company. Lisa says, “If we don’t get that cash balance over $200,000, we’ll default on our loan agreement. They could close us down, put us all out of our jobs!” Lisa continues, “I talked to Oconto Distributors (one of Linbarger’s largest customers) this morning. They said they sent us a check for $150,000 yesterday. We should receive it tomorrow. If we include just that one check in our cash balance, we’ll be in the clear. It’s in the mail!” Questions What is the accounting problem that the Linbarger Company faces? What are the ethical considerations in this case? Provide rationale for why these are ethical considerations. What are the negative impacts that can happen if you do not follow Lisa Infante’s instructions to wait one more day to post the balance? Who will be negatively impacted if you do comply? Provide a rationale for why these individuals will be impacted. What is one alternative that you could pursue in this scenario? Support your recommendations with information you learned in this class.