FULL SOLUTION MANUAL FOR
Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 12
Accounting in Action 12 12
ASSIGNMENT12CLASSIFICATION12TABLE
Brief12Exe A
Learning12Objectives Questions rcises Do12It! Exercises Problems
1. 1,122,123,124,125 1 1,122
Identify12the12activities12
and12users12associated12
with12accounting.
2.12Explain12the12building12blocks12 6,127,128,129,121 2 3,124
of12accounting:12ethics,12princ 0
iples,12and12assumptions.
3. 11,1212,1213,121 1,122,123,124,125 3 5
State12the12accounting 4.
12equation,12and12defin 22
e12its12components.
4. 15,1216,1218 6,127,128,129 4 6,127,128 1A,122A,124A,
Analyze12the12effects12of12b 5A
usiness12transactions12on12t
he12accounting12equation.
5. 17,1219,1220,122 10,1211 5 8,129,1210,1211, 2A,123A,124A,
Describe12the12four12financia 1, 12,1213,1214,121 5A
l12statements12and12how12the 5,
y12are12prepared. 16,1217,1218
obtain12permission12to12reuse12this12material12is12available12at12http://www.wiley.com/go/p
ermissions.
, ©12202112John12Wiley12&12Sons,12Inc.12All12rights12reserved.12No12part12of12this12publication12may12be12reproduced,12stored12in12a12retrie
val12system,12or12transmitted,12in12any12form12or12by12any12means,12electronic,12mechanical,12photocopying,12recording12or12otherwise,12ex
cept12 as12 permitted12by12law.12Advice1 2 on12how12to
1-2 ©12202112John12Wiley12&12Sons,12Inc.12All12rights12reserved.1 2 Weygandt,12Financial12&12Managerial12Accounting124e,12Solutions12Manual1
2121 2 (For12 Instructor12Use12Only)
, ANSWERS TO QUESTIONS 12 12
1. True.12Virtually12every12organization12and12person12in12our12society12uses12accounting12information.
12Businesses,12investors,12creditors,12government12agencies,12and12not-for-
profit12organizations12must12use12accounting12information12to12operate12effectively.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
2. Accounting12is12the12process12of12identifying,12recording,12and1 2 communicating1 2 the12economic12e
vents12of12an12organization12to12interested12users12of12the12information.12The12first12activity12of12the12
accounting12process12is12to12identify12economic12events12that12are12relevant12to12a12particular12busin
ess.12Once12identified12and12measured,12the12events12are12recorded12to12provide12a12history12of12the
12financial12activities12of12the12organization.12Recording12consists12of12keeping12a12chronological12di
ary12of12these12measured12events12in12an12orderly12and12systematic12manner.12The12information12is12c
ommunicated12through12the12preparation12and12distribution12of12accounting1 2 reports,1 2 the1 2 most
1 2 common1 2 of1 2 which12are1 2 called12financial12statements.12A12vital12element12in12the12communica
tion12process12is12the12accountant’s12ability12and12responsibility12to12analyze12and12interpret12the12re
ported12information.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
3. (a)12Internal12users12are12those12who12plan,12organize,12and12run12the12business12and12therefore12ar
e12officers12and12other12decision12makers.
(b) To12assist12management,12accounting12provides12internal12reports.12Examples12include12financ
ial12comparisons12of12operating12alternatives,12projections12of1 2 income12from12new12sales12ca
mpaigns,12and12forecasts12of12 cash12needs12for12the12next12year.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
4. (a)
Investors12(owners)12use12accounting12information12to12make12decisions12to12buy,12hold,12or12sell12s
tock.
(b) Creditors12use12accounting12information12to12evaluate12the12risks12of12granting12credit12or12lending12money.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
5. False.12Bookkeeping12usually12involves12only12the12recording12of12economic12events12and12therefore
12is12just12one12part12of12the12entire12accounting12process.12Accounting,12on12the12other12hand,12invol
ves12the12entire12process12of12identifying,12recording,12and12communicating12economic12events.
LO1 2 1,1 2 BT:1 2 C,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
6. Harper12Travel12Agency12should12report12the12land12at12$85,00012on12its12December1231,1 2 20221 2 b
alance12sheet.12This12is12true12not12only12at12the12time12the12land12is12purchased,12but12also12over12th
e12time12the12land12is12held.12In12determining12which12measurement12principle12to12use12(historical12c
ost12or12fair12value)12companies12weigh12the12factual12nature12of12cost12figures12versus12the12relevan
ce12of12fair12value.12In12general,12companies12use12historical12cost.12Only12in12situations12where12ass
ets12are12actively12traded12do1 2 companies12apply12the12fair12value12principle.
LO1 2 2,1 2 BT:1 2 C,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Measurement,1 2 Analysis1 2 and1 2 Int
erpretation1 2 IMA:12Reporting
7. The12monetary12unit12assumption12requires12that12only12transaction12data12capable12of12being12expr
essed12in12terms12of12money12be12included12in12the12accounting12records.12This12assumption12enabl
es12accounting12to12quantify12(measure)12economic12events.
LO122,12BT:12K,12Difficulty:12Easy,12TOT:12212min.,12AACSB:12None,12AICPA12FC:12Measurement,12Analysis12and12Interpret
ation1 2 IMA:12Reporting
obtain12permission12to12reuse12this12material12is12available12at12http://www.wiley.com/go/p
ermissions.
,
Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 12
Accounting in Action 12 12
ASSIGNMENT12CLASSIFICATION12TABLE
Brief12Exe A
Learning12Objectives Questions rcises Do12It! Exercises Problems
1. 1,122,123,124,125 1 1,122
Identify12the12activities12
and12users12associated12
with12accounting.
2.12Explain12the12building12blocks12 6,127,128,129,121 2 3,124
of12accounting:12ethics,12princ 0
iples,12and12assumptions.
3. 11,1212,1213,121 1,122,123,124,125 3 5
State12the12accounting 4.
12equation,12and12defin 22
e12its12components.
4. 15,1216,1218 6,127,128,129 4 6,127,128 1A,122A,124A,
Analyze12the12effects12of12b 5A
usiness12transactions12on12t
he12accounting12equation.
5. 17,1219,1220,122 10,1211 5 8,129,1210,1211, 2A,123A,124A,
Describe12the12four12financia 1, 12,1213,1214,121 5A
l12statements12and12how12the 5,
y12are12prepared. 16,1217,1218
obtain12permission12to12reuse12this12material12is12available12at12http://www.wiley.com/go/p
ermissions.
, ©12202112John12Wiley12&12Sons,12Inc.12All12rights12reserved.12No12part12of12this12publication12may12be12reproduced,12stored12in12a12retrie
val12system,12or12transmitted,12in12any12form12or12by12any12means,12electronic,12mechanical,12photocopying,12recording12or12otherwise,12ex
cept12 as12 permitted12by12law.12Advice1 2 on12how12to
1-2 ©12202112John12Wiley12&12Sons,12Inc.12All12rights12reserved.1 2 Weygandt,12Financial12&12Managerial12Accounting124e,12Solutions12Manual1
2121 2 (For12 Instructor12Use12Only)
, ANSWERS TO QUESTIONS 12 12
1. True.12Virtually12every12organization12and12person12in12our12society12uses12accounting12information.
12Businesses,12investors,12creditors,12government12agencies,12and12not-for-
profit12organizations12must12use12accounting12information12to12operate12effectively.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
2. Accounting12is12the12process12of12identifying,12recording,12and1 2 communicating1 2 the12economic12e
vents12of12an12organization12to12interested12users12of12the12information.12The12first12activity12of12the12
accounting12process12is12to12identify12economic12events12that12are12relevant12to12a12particular12busin
ess.12Once12identified12and12measured,12the12events12are12recorded12to12provide12a12history12of12the
12financial12activities12of12the12organization.12Recording12consists12of12keeping12a12chronological12di
ary12of12these12measured12events12in12an12orderly12and12systematic12manner.12The12information12is12c
ommunicated12through12the12preparation12and12distribution12of12accounting1 2 reports,1 2 the1 2 most
1 2 common1 2 of1 2 which12are1 2 called12financial12statements.12A12vital12element12in12the12communica
tion12process12is12the12accountant’s12ability12and12responsibility12to12analyze12and12interpret12the12re
ported12information.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
3. (a)12Internal12users12are12those12who12plan,12organize,12and12run12the12business12and12therefore12ar
e12officers12and12other12decision12makers.
(b) To12assist12management,12accounting12provides12internal12reports.12Examples12include12financ
ial12comparisons12of12operating12alternatives,12projections12of1 2 income12from12new12sales12ca
mpaigns,12and12forecasts12of12 cash12needs12for12the12next12year.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
4. (a)
Investors12(owners)12use12accounting12information12to12make12decisions12to12buy,12hold,12or12sell12s
tock.
(b) Creditors12use12accounting12information12to12evaluate12the12risks12of12granting12credit12or12lending12money.
LO1 2 1,1 2 BT:1 2 K,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
5. False.12Bookkeeping12usually12involves12only12the12recording12of12economic12events12and12therefore
12is12just12one12part12of12the12entire12accounting12process.12Accounting,12on12the12other12hand,12invol
ves12the12entire12process12of12identifying,12recording,12and12communicating12economic12events.
LO1 2 1,1 2 BT:1 2 C,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Reporting,1 2 IMA:1 2 Reporting
6. Harper12Travel12Agency12should12report12the12land12at12$85,00012on12its12December1231,1 2 20221 2 b
alance12sheet.12This12is12true12not12only12at12the12time12the12land12is12purchased,12but12also12over12th
e12time12the12land12is12held.12In12determining12which12measurement12principle12to12use12(historical12c
ost12or12fair12value)12companies12weigh12the12factual12nature12of12cost12figures12versus12the12relevan
ce12of12fair12value.12In12general,12companies12use12historical12cost.12Only12in12situations12where12ass
ets12are12actively12traded12do1 2 companies12apply12the12fair12value12principle.
LO1 2 2,1 2 BT:1 2 C,1 2 Difficulty:1 2 Easy,1 2 TOT:1 2 21 2 min.,1 2 AACSB:1 2 None,1 2 AICPA1 2 FC:1 2 Measurement,1 2 Analysis1 2 and1 2 Int
erpretation1 2 IMA:12Reporting
7. The12monetary12unit12assumption12requires12that12only12transaction12data12capable12of12being12expr
essed12in12terms12of12money12be12included12in12the12accounting12records.12This12assumption12enabl
es12accounting12to12quantify12(measure)12economic12events.
LO122,12BT:12K,12Difficulty:12Easy,12TOT:12212min.,12AACSB:12None,12AICPA12FC:12Measurement,12Analysis12and12Interpret
ation1 2 IMA:12Reporting
obtain12permission12to12reuse12this12material12is12available12at12http://www.wiley.com/go/p
ermissions.
,
