How would respond to the situation

Reference no: EM132479863

Scenario: You are the accountant for Speedy Company and are preparing the financial statements for 2019. Near the end of 2019, Speedy loaned its president $100,000 (a material amount) because she was having financial difficulties. The note was properly recorded as a note receivable by Speedy. You are unsure of how to classify this note on the 2019 ending balance sheet and ask the president when the note is due. She replies, "We never really set a due date; might repay it in 2020 or maybe in a couple of years when I get more financially secure. It would be best to classify this note as a current asset in the usual manner because that will increase our working capital and current ratio, which will make our creditors and shareholders happy."

Question 1: How would you respond to this situation? Support the response using financial reporting requirements, and any ethical dilemmas.

Reference no: EM132479863

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