Question

The Tony Hawk Skate Park has a 5 year instalment loan with monthly payments of $5.000 including interest Currently the first twelve monthly payments have been recorded as a current b y The VP

of Finance, tels board members that he plans to classify the current portion of the installment note as long term. He explains that lenders will be more willing to let the company borrow and will offer lower
interest rate the company reports fewer current liabilities
Murple Choice
The by to borrow at lower
states is more mportant than being ethical
Casting the first the
mort payments as a currently is not required by GAAP
Oo oo
Presenting into whasong current
is acceptable at anycost
O
Reporting the current portion of song.com
teas long-term debt
representation of the fnancial position of the company

Answer 1

How is your break going ?

Answer 2

In general, manipulating financial statements for favorable borrowing terms can be considered unethical.

If the VP of Finance is considering classifying the current portion of the installment note as long-term to make the company's financial position look better, it raises ethical considerations.

Misrepresenting financial information goes against the principles of transparency and honesty in financial reporting. It's important for companies to adhere to accounting standards and ethical practices to maintain trust with stakeholders, including lenders and investors. If there's any doubt about how to classify financial instruments, consulting with accounting professionals or auditors would be a more prudent approach.