Ethical Scenario

Tessa Romine is the accounting manager for All About Style, a graphic design company specializing in projects for small businesses. As part of her job, Tessa is responsible for preparing the companys adjusted trial balance from which the financial statements will be prepared. Her supervisor, Jim Fogel, placed a firm deadline of Friday at 5:00 pm for the completion of the adjusted trial balance. Unfortunately, Tessa was not able to get the trial balance to balance by the due date. The credit side of the trial balance exceeded the debit side by $2,500. To meet the deadline, Tessa decided to add a $2,500 debit to the vehicles account balance. She selected the vehicles account because it will not be significantly affected by the additional $2,500.

1. Did Tessa behave ethically? On which accounting principles or assumptions do you base your answer? Please discuss.

2. Who is affected by Tessas decision? How will they be impacted? Please discuss.

3. How should Tessa have handled this situation?