On a recent trip to Brazil, Lou Delgado, sales manager of Cyber Systems, took his wife along for a vacation and included her airfare and meals on his expense report, which he submitted for reimbursement. Donna Alliksar, vice-president of sales and Delgado's boss, thought his total travel and entertainment expenses seemed excessive. However, Alliksar approved the reimbursement because she owed Delgado a favour. Alliksar, well aware that the company president routinely reviews all expenses recorded in the cash payments journal, had the accountant record the expenses of Delgado's wife in the general journal as follows:
Sales Promotion Expense ..................9,000
Cash .......................................................9,000
Required
1. Does recording the transaction in the general journal rather than in the cash payments journal affect the amounts of cash and total expenses reported in the financial statements?
2. Why did Alliksar want this transaction recorded in the general journal?
3. What is the ethical issue in this situation? What role does accounting play in the ethical issue?