Business ethics deals with human conduct in relation to what is morally good and bad or what is right or wrong. It usually influences our value for decision making which include honesty, fairness, respect, responsibility and compassion. Accounting ethics thus deals with the guidelines that a professional needs to follow while practicing any form of accounting, (i.e. the judgemental and moral values applied in accounting). It therefore can be seen as a set of distinct guidelines for a business to maintain a clean balance sheet for their profit, losses and expenses incurred and prevent it from mishandling financial reports and statements. For a cost or financial manager, it is therefore very important to understand the rules and regulations of his position as any deviation from the moral code of conduct or abuse can result in the suspension of his licence, termination of right to practice and or jail term. Advantages of professional ethics It creates confidence and trust in any profession It is a guideline for professionals It protects the society from corporate scandals The public expects companies to present fact-base costs of business activities There are a lot of high expectations on professionals from the society. Accounting Equation The totality of any financial accounting is based on the accounting equation and the principle of double entry was developed from the axiom of accounting equation. This equation is given as: Assets = Capital + Liabilities Assets: These are the properties of a business and owned by the business (not by the partners or owners of a business). They are expected to be of present and future benefits and examples include furniture, motor vehicle, equipment, landed properties (i.e. lands and buildings), cash. Capital: This is the total amount invested by the owner into a business. It is also the net worth of the business. Liabilities: These are the amounts owed by a business to members of the public. It is an obligation to pay someone in either cash or monetary worth (these include creditors, bank overdrafts, etc.) The sources of assets are; claims of the owners of the business (i.e. capital) and claims from outsiders e.g. loan facilities and suppliers of goods and or services (liabilities). Both sides of the equation must be equal as an asset creates a corresponding capital and liability and vice versa. Now complete the following table.  Assets (N) Liabilities (N) Capital (N)    300,000.00  110,000 190,000.00    210,000 140,000.00 70,000.00    32,000 18,000.00 14,000.00    130,000.00 40,000.00 90,000.00    260,000.00 210,000.00 50,000.00    5,000,000.00 2,000,000.00 3,000,000.00    15,653.00 4,532.00     4,000.00 1,000.00     Effects of Transaction 1. Introduction of Capital in cash Increase in assets (Cash) Increase in Capital  2. Purchase of goods on credits Increase in asset (stock) Increase in liability (creditor)  3. Sale of goods on credit Increase in asset (debtor) Reduction in asset (stock)  4. Settlement of creditor by cheque Reduction in liability (creditor) Reduction in asset (bank)  5. Cash drawings for own use by owner Decease in asset (cash) Decrease in capital  6. Owner pays creditors from private money Increase in assets (cash) Increase in capital  7. Receipt from a debtor (cash) Increase in asset (cash) Reduction in asset (debtor)   Balance Sheets: Started business with N30,000 bank Effects would be: Increase in asset (bank) 		         Increase in capital (bank)  N            k  N            k  Capital 30,000 : 00 Bank 30,000 : 00   Purchased motor vehicle for N316,000 on credit Effects would be: Increase in liability (creditor) Increase in assets (motor vehicle) The balance sheet thus changes to read thus;       N          k       N          k  Capital   30,000 : 00 Cash     30,00 : 00  Creditor 316,000 : 00 Motor vehicle 316,000 : 00   346,000 : 00  346,000 : 00   Bought goods N5,000 from Shehu on credit Effects would be: increase in liability (creditors) 		          Increase in asset (stock) The balance sheet thus changes to read thus;       N          k       N          k  Capital   30,000 : 00 Bank     30,00 : 00  Creditor 321,000 : 00 Motor vehicle 316,000 : 00    Stock    351,000 : 00  351,000 : 00   Sold goods for cash N3,000 Effects would be: increase in asset (cash) 		         decrease in asset (stock) The balance sheet reads       N          k       N          k  Capital   30,000 : 00 Cash     3,000 : 00  Creditor 321,000 : 00 Motor vehicle 316,000 : 00    Bank   30,000 : 00    Stock (5,000-3,000)     2,000 : 00   351,000 : 00  351,000 : 00   Paid creditors N20,000 with cheque Effects would be: reduction in liability (creditor) 		         Reduction in asset (bank)       N          k       N          k  Capital   30,000 : 00 Cash     3,000 : 00  Creditors(321,000-20,000) 301,000 : 00 Motor vehicle 316,000 : 00    Bank(30,000-20,000)   10,000 : 00    Stock      2,000 : 00   331,000 : 00  331,000 : 00   Sold goods to David on credit       N          k       N          k  Capital   30,000 : 00 Cash     3,000 : 00  Creditors 301,000 : 00 Motor vehicle 316,000 : 00    Bank   10,000 : 00    Stock      2,000 : 00       3,000 : 00 Debtor     3,000 : 00   334,000 : 00  334,000 : 00   Question 1: Draft the balance sheet for Isiaka and sons Ltd from the following details Land and Building			N20,000.00 Cash in hand				N15,000.00 Equipment				N8,000.00 Creditors				N16,000.00 Debtors					N1,000.00 Stock					N300.00 Motor vehicle				N2,500.00 Cash at bank				N200.00 Loan					N5000.0