You are an accounting student taking a class in accounting. Your professor has given you an assignment for the weekend. He wants you to look at each ethical scenario listed below and answer the questions related to that scenario.
Mr. Right and Mr. Wrong own an antique store in a partnership. They share profits and losses equally and receive an annual salary of $50,000, as per the partnership agreement. Mr. Right travels the country buying antiques. Mr. Wrong manages the store. From time to time, they use some of the small items from the store merchandise for personal use. Mr. Wrongs daughter is getting married, and she loves an antique piece that costs $5,000. Mr. Wrong makes the following entry on the books to record the transaction:
Debit Credit
Cost of goods sold $5,000
Inventory $5,000
How should Mr. Wrong have recorded the transaction?
What are the ethical aspects of Mr. Wrongs action?

Sample solution

Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell. 

In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.

God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.

Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.

To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.

 

References

Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.

Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies4(8), 487.

Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.

Sample Answer

Sample Answer

 

 

Ethical Scenario Analysis: Mr. Wrong’s Transaction

How Should Mr. Wrong Have Recorded the Transaction?

In this scenario, Mr. Wrong’s recording of the transaction raises significant ethical and accounting concerns. The correct way to record the transaction of Mr. Wrong giving an antique piece valued at $5,000 to his daughter involves recognizing that this transaction is not a legitimate business expense or cost of goods sold. Instead, it is a personal transaction that benefits Mr. Wrong and should not affect the business’s financial statements.

Thus, the appropriate entry should be:

Correct Journal Entry:

Account Debit Credit
Drawings (or Mr. Wrong’s Capital Account) $5,000
Inventory $5,000

Explanation:

– Drawings (or Mr. Wrong’s Capital Account): This account reflects the personal withdrawals Mr. Wrong makes from the partnership for his own use. Since he is taking an item from the store for personal use without compensating the partnership, it should be recorded as a drawing.

– Inventory: The inventory account should still be credited to reflect the reduction in merchandise available for sale due to the personal withdrawal.

This method accurately represents the nature of the transaction by indicating that Mr. Wrong is taking an asset from the business for personal reasons rather than documenting it as a business expense.

Ethical Aspects of Mr. Wrong’s Action

1. Conflict of Interest

Mr. Wrong’s decision to take an antique piece from the store for his daughter’s wedding raises a conflict of interest. As a partner in the business, he should prioritize the interests of the partnership and its financial health over personal interests. This action could lead to perceptions of favoritism and undermine trust between partners.

2. Misrepresentation of Financial Statements

By categorizing the withdrawal as “Cost of Goods Sold,” Mr. Wrong is misrepresenting the financial statements of the partnership. This misrepresentation can lead to inaccurate reporting of profits and inventory levels, potentially misleading stakeholders such as investors, suppliers, and tax authorities.

3. Violation of Partnership Agreement

The partnership agreement likely contains provisions that govern the use of business assets. By taking an item for personal use without proper documentation or compensation, Mr. Wrong is violating these terms, which could lead to legal repercussions or disputes between partners.

4. Ethical Responsibility to Stakeholders

Mr. Wrong has an ethical responsibility to consider all stakeholders involved in the antique store, including customers, employees, and partners. Taking merchandise for personal use undermines this responsibility by prioritizing personal gain over the integrity and sustainability of the business.

5. Trust and Transparency

Trust is fundamental in any partnership. Mr. Wrong’s actions can erode trust between him and Mr. Right if not properly disclosed and accounted for. Transparency in transactions is essential for maintaining a healthy working relationship.

Conclusion

In conclusion, Mr. Wrong should have recorded the transaction as a personal withdrawal rather than a business expense to adhere to ethical accounting practices. His actions raise several ethical concerns, including conflicts of interest, misrepresentation of financial statements, violations of partnership agreements, and a lack of transparency with stakeholders. It is crucial for professionals in accounting and business management to maintain ethical standards to foster trust, integrity, and transparency in their operations.

 

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