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Author Question: Ima Broke is the sole owner of Miracles, Inc Ima needs another loan from a bank to expand her ... (Read 67 times)

Mr. Wonderful

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on: Jul 5, 2018
Ima Broke is the sole owner of Miracles, Inc Ima needs another loan from a bank to expand her business.
 
  In order to improve the chances of receiving a loan, she decides to report the principal of one of Miracles, Inc's loans as contributed capital instead of a liability on the balance sheet. Discuss the ethical issue with Ima's treatment of the loan.
  What will be an ideal response?

Question 2

The control concern that there will be a high risk of data conversion errors relates primarily to which of the following information systems functions?
 a. data control
  b. data entry
  c. data librarian
  d. database administration


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dawsa925

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Reply #1 on: Jul 5, 2018
Answer to Question 1

Ima Broke is misrepresenting the company's financial position. The principal of loans has to be paid back when due, but the company has no obligation to give money back to its owners. A potential creditor will be misled and may decide to lend the money only to find out later that the company does not have the ability to pay back its loans when due.

Answer to Question 2

B


Mr. Wonderful

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Reply 2 on: Jul 5, 2018
Thanks for the timely response, appreciate it

bigcheese9

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Reply 3 on: Yesterday
Excellent

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