What circumstances would reclassification be considered

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Best Exports has noticed their current year net income is only $60,000. In order to get a loan from their bank to assist the business they will need to provide a statement of cash flows. In reviewing the statement of cash flows, you notice a large increase ($80,000) in accounts receivable due to two of your largest customers being behind in payments. Since the bank looks at the operating activities, this increase will create concern. You make a suggestion to reclassify the accounts receivables to long-term, thus removing them from current assets will increase the net cash from operations.

Problem 1: Under what circumstances would this reclassification be considered ethical or unethical? Support your selection by finding an article which explains your choice.

Reference no: EM132941026

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