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Should anita be permitted to weigh in on adjusting entries

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Question: Anita Brown is the manager of a wholesale food company. Her compensation, in part, is incentive-based. In other words, the higher the company income, the higher her incentive compensation. Each year, in an effort to influence her bonus, Anita makes several recommendations, concerning adjusting entries, to the company controller. One of her favorites is to ask the controller to reduce the estimate of doubtful accounts.

1. How does lowering the estimate of doubtful accounts affect the income statement and balance sheet?

2. Is there an ethical consideration in this case? If so, what is it?

3. Should Anita be permitted to weigh in on adjusting entries under these circumstances? Why or why not?

Please number your responses to correspond to the questions asked and review the attached grading rubric prior to completing the assignment. Appropriate grammar and punctuation is expected.

Reference no: EM132764734

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