Is Anyone Listening? Situation #3

Our assignment is to analyze one of the four situations provided and explain if it is ethical or not.

Situation # 3

Lynette Tillar and Bob Rebold are co-workers and good friends. Their supervisor, George Parton, has previously reprimanded them for spending too much time chatting on the phone and visiting. George has decided to access their e-mail to see if they are wasting company time with personal online communications as well.

George's actions are not ethical because:

• George should not go through other people's e-mails without their permission. It is invasion of privacy.
• Personal e-mail accounts do not have anything to do with the business field. George should not have a reason to go through their personal information.
• Lynette and Bob should have the right to talk to each other whenever they want to as long as they do their work; it is a free country.

Chapter 11

Vocabulary

1. Customer - a person or business to whom merchandise or services are sold.
2. Sales Tax - a tax on a sale of merchandise or services.
3. Cash Sale - a sale in which cash is received for the total amount of the sale at the time of the transaction.
4. Credit Card Sale - a sale in which a credit card is used for the total amount of the sale at the time of the transaction.

Important Facts

• Sales tax rates are usually stated as a percentage of sales.
• Every business collecting a sales tax needs accurate records of the amount of total sales and total sales tax collected.
• The amount of sales tax collected is a business liability until paid to the state government. It is recorded in a separate liability account titled "Sales Tax Payable".
• To calculate Sales Tax: Price of Goods X Sales Tax Rate = Sales Tax
• A credit card slip is prepared for each credit card sale. At the end of the week, they are included with the business's bank deposit.
• When a credit card transaction is entered on the cash register, a paper tape is printed as a receipt for the customer.
• At the end of the week, a cash register tape is printed showing total cash and credit card sales. It is then used as the source document for weekly cash and credit card sales transactions.
• Invoice - a form describing the goods or services sold, the quantity, and the price. It is prepared by the seller when merchandise is sold on account.
• Sales Invoice - (also called sales ticket or sales slip) an invoice used as a source document for recording a sale.
• Three copies of the invoice are prepared. One goes to the customer, one to the shipping department, and one is kept by the business as a source document.

What is the difference between a Proprietorship and a Partnership?

Proprietorship

A proprietorship is owned by one person, and therefore has only one capital account. This person is responsible for everything involved with the business. If the person's business fails, the sole owner is responsible for handling all liabilities owed. A Proprietorship uses an eight column journal for recording transactions.

Partnership

A Partnership uses the assets and abilities of two or more people. This is an advantage because one person is not responsible for handling everything in the business. The work and costs for operating may be split among the owners. However, the capital must also be split among owners. If the business fails, all owners are responsible for paying the burdens. A partnership uses an eleven column journal when recording transactions.