You Decide: Can wages payable be deferred to make the financial statements look better?
Response to the following problem:
It is early December and you have just been hired as an accountant for a local computer hardware store. Business is expanding due to the increased number of sales reps your boss just hired. Your boss is excited about expanding the business into other nearby communities, but will need a loan from the bank to do so. He has hired you to clean up the books and get the company's financial information ready so he can present it to the bank's loan officer after the first of the year. On December 30, your boss asks you not to record the sales force's wages for the month of December because he won't be able to pay them until mid January. He wants the financial statements to be in good shape when he visits the loan officer. What should you do?