Case Scenario:
Terry Bailey, an accountant, has worked for the past eight years as a payroll clerk for Fairwell Furniture, a small furniture manufacturing firm in the northeast. Terry recently experienced unfortunate circumstances. Her teenage son required minor surgery and the medical bills not covered by Terry's insurance have strained Terry's family.
Terry works hard and is a model employee. Although she received regular performance raises during her first few years with Fairwell, Terry's wages have not increased in three years. Terry asked her supervisor, Bill Jameson, for a raise. Bill agreed that Terry deserved a raise, but told her he could not currently approve one because of sluggish sales.
A disappointed Terry returned to her duties while the financial pressures in her life continued. Two weeks, Larry Tyler, an assembly worker at Fairwell, quit over a dispute with management. Terry conceived an idea. Terry's duties included not only processing employee terminations but also approving time cards before paychecks were issued and then distributing the paychecks to firm personnel. Terry decided to delay processing Mr. Tyler's termination, to forge timecards for Larry Tyler for the next few weeks, and to cash the checks herself. Since she distributed paychecks, no one would find out, and Terry reasoned that she was really entitled to the extra money anyway. In fact, no one did discover her maneuver and Terry stopped the practice after three weeks.
Does Terry's scheme affect Fairwell's balance sheet? Explain your answer.