It is standard accounting procedure, or a generally accepted accounting principle (GAAP), to make a journal entry
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Question:
It is standard accounting procedure, or a generally accepted accounting principle (GAAP), to make a journal entry to remove the current year's principle from the long-term liabilities. This entry reduces the long-term liabilities and increases the current liabilities. Your company has a bank loan that requires a current ratio of 1.5 times. The owner has asked you, the bookkeeper, not to make the adjusting entry that would take the current portion from the long-term liabilities. If you make the adjusting entry, the company's loan will need to be repaid immediately (or the loan called). What should you do?
Related Book For
Ethics in Accounting A Decision Making Approach
ISBN: 978-1118928332
1st edition
Authors: Gordon Klein
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