The president of a business is required not loan his spouse the company’s credit card for personal gasoline purchases.
Separate Entity Assumption
As a professional tutor, I would explain that such practice is generally not recommended as it could lead to several issues. Here are some reasons why the president of a business should avoid loaning the company’s credit card to his spouse for personal gasoline purchases:
1. Misuse of company funds: Providing the company credit card to someone for personal use can lead to a misuse of company funds. It can be challenging to track and maintain the expenses of personal use, which makes it difficult to separate personal expenses from business expenses.
2. Loss of control: The president of the business loses control over monitoring employee behavior, and the spouse may use the company’s credit card without seeking necessary approval, which can lead to fraudulent or suspicious transactions.
3. Legal implications: The misuse of company funds by an employee or spouse could lead to a legal issue for the business. It can be challenging to justify such personal expenses in the event of a tax audit, which could cause legal implications for the company.
Therefore, it is always better for the president of the company to avoid loaning the company’s credit card to his spouse for personal gasoline purchases. Instead, the president and his spouse should discuss options for personal expenses and separate them from business expenses to maintain transparency and clarity.
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