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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 839 |
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The balance sheet will be affected because the stockholders' equity will be overstated by the addition of the retained earnings and supplies will be overstated as well. Another problem is that if the decrease in supplies isn't recorded, then the company might question why I would order supplies in January since nothing was recorded on the books...
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They might believe that the supplies were being taken by the employees instead of used by the company. Since all of these financials are looked at by the stockholders, and the governing bodies, it is best to record the expense and not receive my bonus then to cause the company and myself major embarrassment by not recording the expense...
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