Accounting Report: Ethics, Ledger Accounts, and Trial Balance Analysis

This accounting report addresses ethical considerations, ledger accounts, and trial balance analysis. It begins with an introduction outlining the report's structure, followed by an examination of stakeholder interests, Freda's request to manipulate financial statements, and the ethical issues involved, concluding with whether Lucia can remain ethical. The report then presents ledger accounts for various transactions, including cash at bank, accounts receivable, truck, accounts payable, capital, drawings, rent, advertising expenses, fuel, and trucking services. A trial balance is also provided. Finally, the report discusses professional accountants' ethical responsibilities and reviews cases where accounting laws were breached, detailing penalties imposed for non-compliance. The report concludes by emphasizing the importance of ethical standards in business operations and the correct preparation of financial records.

Accounting assignment

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
A. Stakeholders which are included............................................................................................1
B. Reasons behind Freda demand...............................................................................................1
C. Various ethical issues which are involved..............................................................................2
D. Can Lucia remain ethical by entering wrong amounts...........................................................2
Question 2........................................................................................................................................2
Question 3........................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In business there are various aspects which are required to be taken into consideration so
that proper functioning can be carried out. In this report three questions will be answered which
will be covering different points (Kew and Watson, 2010). Firstly the principles in respect of
ethics and governance will be discussed. Then ledger accounts and trial balance will be prepared
in the manner which has been specified. Together with them an essay will be provided in which
manner in which breach of ethical standards shall be considered will be described.
Question 1
A. Stakeholders which are included.
In any business there are various stakeholders who are involved. It will be required that
they shall be identified so that while carrying out operations there interest will be considered
(Warren and Young, 2011). The stakeholders which are present in the given case are:
 All the shareholders whether they are present or potential of Vroom Limited.
 Lucia, accountant of company
 Freda Chuse who is manager of given entity.
B. Reasons behind Freda demand.
In the given case it is provided that Freda who is manager of Vroom Limited is asking
her accountant Lucia to show less amount of profits in financial statements. She is doing so as
currently a grant is being provided to company by government of $100000 in order to carry out
proper training of apprentice mechanics and if higher profits will be reported then there are
chances that it may be lost (Zhang and et. al., 2012). It is provided that bonus will be increased if
$3 million are earned and will remain at same level thereafter. So there will be no additional
advantage which will be gained by company if profits are reported at $3.5 million. So it will be
determined that if any increase in bonus is possible during current period as otherwise it will be
beneficial for it to defer all the amount which has been earned in excess of $3 million. By doing
so the risk associated in respect of withdrawal of grant by government will be eliminated and
also there will be no negative impact which will have to be borne in respect of bonus amount. So
all of these are some of the reasons due to which such condition is put by Freda.
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C. Various ethical issues which are involved.
In accounting it will be responsibility of Lucia to check that all the assets, liabilities and
gains and losses shall be recorded in appropriate manner and that too in correct time. So as in
given scenario he has been asked to misstate the financial records and show those transactions
which have not taken place in current period which will be against the ethical requirements. By
this true position and performance of company will not be reflected (Kieso and et. al., 2012). For
this purpose there are various techniques which can be used so that such as change in methods
used for calculations which will be acceptable but as in present situation they will be used to
manipulate the accounts, so will be considered as unethical. For gaining the benefit of grant it
will not be suitable to force Lucia to carry on such activities. This is also unethical as
pressurising someone to perform their work in wrong manner is also considered as against ethics.
D. Can Lucia remain ethical by entering wrong amounts.
An accountant is responsible to make entries in accounts in which they can record
incomes and expenses. So Lucia will also be authorised to incorporate various expenses and
gains with the help of adjusting entries. They will be such amounts which are not paid or
received in actual terms but are represented in accounts in order to maintain the profits at low
level. This can be performed but if due to the the financial position of the company will be
presented in wrong manner in front of investors and shareholders then it will be considered as
unethical (Thapar, 2012). This is because the main purpose for which accounts are made to
provide the outsiders with relevant information as this will be helpful for them in making of
important decisions. If they will be made in inappropriate manner then it will be misleading for
them which will be against the ethical principles set by authorities. So it can be said that
providing shareholders with wrong data is an unethical activity.
Question 2
Ledger accounts of Carrying your load
Cash at bank A/c
Date Particulars Amount Date Particulars Amount
01/07/17 To capital 620000 04/07/17 By Accounts payable 540000
12/07/17 To trucking services 6200 05/07/17 By rent 1600
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13/07/17 To trucking services 9000 10/07/17 By drawings 4000
14/07/17 To accounts
receivable
12000 12/07/17 By advertising expenses 1200
14/07/17 By Fuel expenses 8800
14/07/17 By balance c/d 91600
647200 647200
Accounts receivable A/c
Date Particulars Amount Date Particulars Amount
09/07/17 To Trucking service 12000 14/07/17 By Cash at bank 12000
13/07/17 To trucking services 9600 14/07/17 By balance c/d 1600
21600 21600
Truck A/c
Date Particulars Amount Date Particulars Amount
02/07/17 To Accounts
payable
540000 14/07/17 By balance c/d 540000
540000 540000
Accounts payable A/c
Date Particulars Amount Date Particulars Amount
04/07/17 To Cash at bank 540000 02/07/17 By Truck 540000
540000 540000
Capital A/c
Date Particulars Amount Date Particulars Amount
01/07/17 To balance c/d 620000 01/07/17 By Cash at bank 620000
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620000 620000
Drawings A/c
Date Particulars Amount Date Particulars Amount
10/07/17 To Cash at bank 4000 10/07/17 By Balance c/d 4000
4000 4000
Rent A/c
Date Particulars Amount Date Particulars Amount
05/07/17 To Cash at bank 1600 05/07/17 By balance c/d 1600
1600 1600
Advertising expenses A/c
Date Particulars Amount Date Particulars Amount
12/07/17 To Cash at bank 1200 12/07/17 By balance c/d 1200
1200 1200
Fuel A/c
Date Particulars Amount Date Particulars Amount
12/07/17 To Cash at bank 8800 12/07/17 By balance c/d 8800
8800 8800
Trucking service A/c
Date Particulars Amount Date Particulars Amount
09/07/17 By Accounts receivable 12000
12/07/17 By cash at bank 6200
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13/07/17 By accounts receivable 9600
13/07/17 By cash at bank 9000
14/07/17 By balance c/d 36800
36800 36800
Carrying your load
Trial balance as on 14th July 2017
Particulars Debit Credit
Cash at bank 91600
Accounts receivable 540000
Truck 9600
Capital 620000
Drawings 4000
Rent 1600
Trucking services 36800
Fuel expense 8800
Advertising expenses 1200
Total $656800 $656800
Question 3
Professional accountants are required to possess all the knowledge regarding ethics and
governance in present environment. By the help of them they will be able to deal with all the
ethical issues in better manner (Cabrera, 2012). This is very serious matter as if ethics are not
followed then it will have a negative impact on business and due to this reason it is given
importance by professionals. This has been recently done in many cases and some of them are
presented here under:
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1. The first case which can be discussed is of Harvey Goodman in which it was found that
he has breached the law which is made in respect of quality review. It was identified that
in spite of being selected he has not carried out review. He has also not informed about it
and when asked no response has been made. The hearings which were made by
disciplinary tribunal were not attended by him.
Due to all this there were various penalties which were imposed upon him and it include
forfeiture of his membership and all fines were also imposed on him. Severe reprimand was
given as professional conduct was breached. Also fine of 1000$ was required to be paid by him
as he has not provided any response to correspondence. All of these were correct and shall be
paid by him.
2. The another case is about Mr. Leo Sheppet who has breached the law under section 8.1 of
APES 310. this is related to manner in which clients money shall be dealt with. He failed
to comply with the provisions and when was asked to clarify the matter he was not able
to provide any satisfactory response in this respect (McGregor, 2014). It was found that
he has attended the sessions which were conducted by tribunal and also provided
acceptance in respect of four complaints. It was identified that accounts have not been
audited from last seven years.
For this various penalties were imposed which were required to be paid by them. Their
membership had been forfeited for a period of five years. Also the quality review will have to be
carried out and all the cost that will be incurred in respect of it is to be borne by him. An audit is
to be carried out in which unqualified report must be provided by auditor and that shall be given
to GMPC.
3. This is related to Mr Arun Kalwadia who has breached Article 39(a)(ii)G for which he
was found guilty. The section 134.1(1) which is related to attainment of property by
deception was not fulfilled. He had gained an amount of $105000 with the making of
false invoices and they had been paid by government entity. For this reason sentence was
made on him for a period of 3 years.
As all the complaints made against him have been proved so penalties were imposed by tribunal
in which forfeiture of membership was made for duration of eight years (Rummery, 2011).
Before this he was required to complete the programme made by CPA. Also all the subscriptions
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and costs which were outstanding were required to be paid by him. The cost was also to be paid
which amounted to $698.92.
So above are presented some of the cases in which various laws have been breached by many
persons. All the rules and regulations which will have to be followed are explained and also the
manner in which the situations are taken into consideration by tribunal is specified. The
liabilities or can say fines which are to be paid by them for non compliance is provided above
according to the cited decisions made in this regard.
CONCLUSION
From the above mentioned report it can be concluded that there are various provisions
that are required to be complied by all the businesses. For ensuring success it will be needed that
all the work shall be done according to ethical standards. The manner in which ledger posting
will be done and trial balance will be made is also provided. There are many such decisions
which are made by tribunal and have been provided by which it is understood that ethics and
governance is very important and shall be followed by all.
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