Test your understanding 2 – Key concepts Fred is a certified accountant. He runs his own accountancy practice fro home, where he prepares personal taxation and small business account for about 75 clients. Fred believes that he provides a good service and his clients generally seem happy with the work Fred provides. At work, Fred tends to give priority to his business friends that he plays golf with. Charges made to these clients tend to be lower than others - although Fred tends to guess how much each client should be charged this is quicker than keeping detailed time-records. Fred is also careful not to ask too many questions about clients affairs when preparing personal and company taxation returns. His clients are grateful that Fred does not pry too far into their affairs, although the taxation authorities have found some irregularities in some tax returns submitted by Fred. Fortunately the client has always accepted responsibility for the errors and Fred has kindly provided his services fre of charge for the next year to assist the client with any financial penalties Required: Discuss whether the moral stance taken by Fred is appropriate.

Test your understanding 2 – Key concepts Fred is a certified accountant. He runs his own accountancy practice fro home, where he prepares personal taxation and small business account for about 75 clients. Fred believes that he provides a good service and his clients generally seem happy with the work Fred provides. At work, Fred tends to give priority to his business friends that he plays golf with. Charges made to these clients tend to be lower than others - although Fred tends to guess how much each client should be charged this is quicker than keeping detailed time-records. Fred is also careful not to ask too many questions about clients affairs when preparing personal and company taxation returns. His clients are grateful that Fred does not pry too far into their affairs, although the taxation authorities have found some irregularities in some tax returns submitted by Fred. Fortunately the client has always accepted responsibility for the errors and Fred has kindly provided his services fre of charge for the next year to assist the client with any financial penalties Required: Discuss whether the moral stance taken by Fred is appropriate.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 24P

See similar textbooks

Similar questions

Tom’s Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has approached Tom about doing his taxes but is concerned about the fees Tom normally charges. The costs and revenues at Tom’s Tax Services follow
Scenario Jane is the accounts payable clerk for ABC Corporation. One of her job duties is to process the travel expenses of the chief financial officer and pay the associated business credit card bill. Jane has noticed lately that the CEO’s expense reports are steadily increasing in amount and frequency. From receipts and other documentation that Jane processes, she suspects the CEO is running personal expenses through the company; however, she is not 100% sure. Questions 1. What responsibility or role does the accountant have in this process? 2. Should information provided by management and other non-accounting personnel be assumed accurate or is it the accountant’s responsibility to investigate each item submitted for legitimacy? 3. In the situation that follows, does Jane have any responsibility to find out the legitimacy of the expenses she is processing or is her job to just pay the bill?
6 Becky and Carl work for a marketing firm. The two accountants discuss the organization’s financial performance. Carl asks Becky, “What’s the bottom line?” Becky reviews a financial report that shows the firm’s profitability over the last quarter. The document Becky reviews is called the Multiple Choice tax return. ledger. audit. income statement. 7 Diedre works at Sally’s Autobody Workshop. Her main job responsibility is to record the routine, day-to-day business transactions of the firm. Based on this information, Diedre is a Multiple Choice tax accountant. forensic accountant. bookkeeper. CMA. 8 A new fitness company called Jump Athletics receives a trademark for its brand name. The trademark received by Jump Athletics is a Multiple Choice return on asset. current asset. liquid asset. fixed asset. 9 Rowena, a senior manager at Top of the Line Publishing, wants a quick snapshot of the company’s financial position before she goes to a manager’s meeting. In this case, which of the…
Mark is a young business student at the Florida State University , who works part-time as a Accountant at the Bank of America . Mark has been married about two years. Mark’s wife is currently taking care of their new born son, while Mark finishes school. Mark is well liked by all those who know him. In fact, those who know Mark would describe him as outgoing, funny and very intelligent.At Bank of America Mark’s primary responsibility is to set up new accounts, make initial loan reviews and work as a Accountant. While at work, Mark always appears to be working hard, and rarely misses work (even for vacation). Oftentimes, Mark is the first one to volunteer to stay late and look over accounts or help clean up.Over the last four months, Mark’s Company supervisor noticed Mark make many interesting purchases. Four months ago, Mark purchased a an Iphone 14. One month ago, Mark bought three new wool suits, which he frequently wears to work. Two months ago, Mark traded in his old Benz for a…
Mark is a young business student at the Florida State University , who works part-time as a Accountant at the Bank of America . Mark has been married about two years. Mark’s wife is currently taking care of their new born son, while Mark finishes school. Mark is well liked by all those who know him. In fact, those who know Mark would describe him as outgoing, funny and very intelligent.At Bank of America Mark’s primary responsibility is to set up new accounts, make initial loan reviews and work as a Accountant. While at work, Mark always appears to be working hard, and rarely misses work (even for vacation). Oftentimes, Mark is the first one to volunteer to stay late and look over accounts or help clean up.Over the last four months, Mark’s Company supervisor noticed Mark make many interesting purchases. Four months ago, Mark purchased a an Iphone 14. One month ago, Mark bought three new wool suits, which he frequently wears to work. Two months ago, Mark traded in his old Benz for a…
You have graduated from Holmes Institute with a Master’s Degree in Professional Accounting, and you’re employed as an accountant/financial advisor, for an accounting firm called Big Business Accountants.Harry is a client, and he has made an appointment to see you. Harry is keen in starting a business. This business he is proposing to start is a bakery. Harry has qualifications in bakery which includes making cakes, bread, pastries.Harry, has saved up his money and he has about $50,000.00 in cash. He hasn’t bought any equipment but he has found a shop which he is considering leasing where his bakery business will be operating from.Harry has always been an employee and now he would like to know what type of business structure he should have for his bakery. Use IRAC formula that is issue, rule, application and conclusion for above case regarding the business structure.
"Dennis Jones, an old college friend, contacted you last week. Dennis owns several car washes, and he believes that financial statement fraud may be occurring. (He pays each car wash manager a bonus if a certain level of profits is earned and is worried that some managers are overstating profits to earn a higher bonus.)Dennisiscomingovertoday to see whether you can help him determine if his suspicions are valid. He is bringing along the financial statements for each car wash (income statements, balance sheets, and cash flow statements) for the last five years.1.What kind of financial statement analysis could you perform to help Dennis detect possible fraud?"
You are a accountant, working for a small firm of accountants and report to the Accounts’ Manager. One of the trainees recently joined your company, and the Accounts’ Director has asked her to provide information on her previous company’s client base. This information would then be used to attract new clients and encourage them to change their accountants and move to your firm. This will increase the revenue of the firm. What advise will you give the trainees? Inform the trainee that she should keep confidentiality and should not reveal any information about her previous clients. Advise the trainee to contact her old employer and obtain permission to use the information on their client base. Advise the trainee that she should be loyal towards her new employer and should therefore provide the information to the Accounts’ Director as requested. Inform the trainee that revealing such information is illegal, and that it is a crime under the regulations
Indicate whether the follow statement is true or false: It will be acceptable for Triple D to just make use of a Debtors Control account for record keeping on all their customer's credit. Scenario Damen Dayal, Charles Dlamini, and Darren Denbury are three young entrepreneurs. While at school, at the age of 17, they turned their love for surfing into a business by manufacturing customisable surfboards. Customers (Debtors) can choose the dimensions to suit their height and body weight, and can submit images and quotes to be used in the graphic design. They named their business Triple D. Triple D started as a little shoestring operation in Damen's grandparent's garage. Initially sales were slow, however after displaying a few posters throughout the neighbourhood and asking family and friends to 'spread the word', the number of orders began to increase. Now that they have matriculated, they wish to find ways to grow the business. Charles proposed that they take their business to the next…
Mel Snow is the manager of a firm, Taxation Matters, which specialises in the preparation of incometax returns. The firm offers two basic products: the preparation of income tax returns for wage andsalary earners, and the preparation of income tax returns for small businesses. Any clients requiringmore complex services are referred to Snow’s brother Roger, who is a partner in a large firm ofchartered accountants.The processing of wage and salary tax returns is quite straightforward, and the firm uses a softwarepackage to process data and print the return. A software package is also used to prepare returns forsmall businesses, although more information is required, particularly about business expenses.Snow has only recently joined Taxation Matters and he is concerned about the firm’s pricing policy,which sets flat fees of $60 per return for wage and salary clients and $300 for small businesses. Hedecides to use activity-based costing to estimate the costs of providing each of these…
Mel Snow is the manager of a firm, Taxation Matters, which specialises in the preparation of incometax returns. The firm offers two basic products: the preparation of income tax returns for wage andsalary earners, and the preparation of income tax returns for small businesses. Any clients requiringmore complex services are referred to Snow’s brother Roger, who is a partner in a large firm ofchartered accountants.The processing of wage and salary tax returns is quite straightforward, and the firm uses a softwarepackage to process data and print the return. A software package is also used to prepare returns forsmall businesses, although more information is required, particularly about business expenses.Snow has only recently joined Taxation Matters and he is concerned about the firm’s pricing policy,which sets flat fees of $60 per return for wage and salary clients and $300 for small businesses. Hedecides to use activity-based costing to estimate the costs of providing each of these…
Mel Snow is the manager of a firm, Taxation Matters, which specialises in the preparation of incometax returns. The firm offers two basic products: the preparation of income tax returns for wage andsalary earners, and the preparation of income tax returns for small businesses. Any clients requiringmore complex services are referred to Snow’s brother Roger, who is a partner in a large firm ofchartered accountants.The processing of wage and salary tax returns is quite straightforward, and the firm uses a softwarepackage to process data and print the return. A software package is also used to prepare returns forsmall businesses, although more information is required, particularly about business expenses.Snow has only recently joined Taxation Matters and he is concerned about the firm’s pricing policy,which sets flat fees of $60 per return for wage and salary clients and $300 for small businesses. Hedecides to use activity-based costing to estimate the costs of providing each of these…