Fred King runs a small bookstore coffee shop. His newest employee has recommended a new, lower-cost vendor for the store's coffee supplies
However, the store would have to pay this vendor in cash, and the vendor cannot guarantee the brands or flavors of coffee from month to month. Fred immediately feels uncomfortable with the deal and says he'll pass. Fred is exhibiting good ethical judgment.
Indicate whether the statement is true or false.
Answer: TRUE
Explanation: At times, an alternative will seem too good to be true. An ethical manager will question unusual business practices. A request for payment in cash, for example, could be an attempt by the vendor to bypass paying sales tax.
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Which of the following statements is true of the Generally Accepted Accounting Principle (GAAP)?
A) It is used by auditors as a guide for their nonaudit services only. B) It is the accepted form of accounting principles around the world. C) It cannot be modified once established by the American Institute of Certified Public Accountants. D) It sets rules for how corporations must set their accounts on their financial statements.
Successful entrepreneurs use their financial records to prepare ________ income statements that show sales and costs for the previous period
A) Quarterly B) Yearly C) Monthly D) Biannually E) None of the above