Sherry Tsang has just started up a small corporation that produces clothing. She has applied for and

Question:

Sherry Tsang has just started up a small corporation that produces clothing. She has applied for and received a government grant. The grant will automatically be renewed as long as the business shows a profit at year end. Because she is trying to control costs, Sherry will prepare the financial statements. The bank has lent Sherry money and is also waiting for the year-end statements. It will decide whether to renew the loan or not.

Instructions

a. Ethics Discuss the ethical issues of Sherry preparing her own financial statements.

b. Which GAAP should she follow? Explain.

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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