A company told the accountant to not adjust the following entries: salary owed $1000, expired pp insurance $500--Is income overstated or understated, why did company take these actions, are they ethical, what advice can you give me?
submitted by Kimberly

Arnold

Is the salary still owed? If so, it belongs on the balance sheet. Leaving a prepaid that should have been expensed will understate expenses, fluffing up net income. Why do it? Depends on a number of factors. Advice: Do what is right. Black is not white.