Solution Manual For
Intermediate Accounting 14th Edition by Kieso Weygandt Warfield
Chapter 1-24 ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability
to structure respo
CHAPTER 1
Financial Accounting and Accounting Standards
ASSIGNMENT CLASSIFICATION TABLE
Topics Questions Cases
1. Subject matter of accounting. 1 4
2. Environment of accounting. 2, 3, 29 6, 7
3. Role of principles, objectives, standards, 4, 5, 6, 7 1, 2, 3, 5
and accounting theory.
4. Historical development of GAAP. 8, 9, 10, 11 8
5. Authoritative pronouncements and rule- 12, 13, 14, 15, 3, 9, 11, 12, 13,
making bodies. 16, 17, 18, 19, 14, 16, 17
20, 21, 22, 23
6. Role of pressure groups. 23, 24, 25, 10, 19, 20
26, 27, 28
7. Ethical issues. 30 15, 18
Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only) 6-1-1
,ASSIGNMENT CHARACTERISTICS TABLE
ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability to structure respo
Level of Time
Item Description Difficulty (minutes)
CA1-1 FASB and standard-setting. Simple 15–20
CA1-2 GAAP and standard-setting. Simple 15–20
CA1-3 Financial reporting and accounting standards. Simple 15–20
CA1-4 Financial accounting. Simple 15–20
CA1-5 Objective of financial reporting. Moderate 20–25
CA1-6 Accounting numbers and the environment. Simple 10–15
CA1-7 Need for GAAP. Simple 15–20
CA1-8 AICPA‘s role in rule-making. Simple 20–25
CA1-9 FASB role in rule-making. Simple 20–25
CA1-10 Politicalization of GAAP. Complex 30–40
CA1-11 Models for setting GAAP. Simple 15–20
CA1-12 GAAP terminology. Moderate 30–40
CA1-13 Accounting organizations and documents issued. Simple 15–20
CA1-14 Accounting pronouncements. Simple 10–15
CA1-15 Rule-making Issues. Complex 20–25
CA1-16 Securities and Exchange Commission. Moderate 30–40
CA1-17 Rule-making process. Moderate 25–35
CA1-18 Financial reporting pressures. Moderate 25–35
CA1-19 Economic consequences. Moderate 25–35
CA1-20 GAAP and economic consequences. Moderate 25–35
6-1-2 Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
, SOLUTIONS TO CODIFICATION EXERCISES
ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability to structure respo
CE1-1
There is no answer to this requirement as it asks the student to register to use the Codification.
CE1-2
(a) The Codification Overview module illustrates three items (1) the topic structure (2) different methods of
accessing and viewing content, and (3) a summary of the unique features of the Codification
Research System.
(b) The Codification is intended to (1) become the single source of U.S. accounting standards and
(2) supersede all of the non-SEC documents used to populate the Codification.
CE1-3
The ―What’s New‖ page provides links to Codification content that has been recently issued. During the
verification phase, updates may result from either the issuance of Codification update instructions that
accompany new Standards or from changes to the Codification due to incorporation of constituent
feedback.
Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only) 6-1-3
, ANSWERS TO QUESTIONS
1. Financial accounting measures, classifies, and summarizes in report form those activities and that
information which relate to the enterprise as a whole for use by parties both internal and external to a
business enterprise. Managerial accounting also measures, classifies, and summarizes in report
form enterprise activities, but the communication is for the use of internal, managerial parties, and
relates more to subsystems of the entity. Managerial accounting is management decision oriented
and directed more toward product line, division, and profit center reporting.
2. Financial statements generally refer to the four basic financial statements: balance sheet, income
statement, statement of cash flows, and statement of changes in owners’ or stockholders’ equity.
Financial reporting is a broader concept; it includes the basic financial statements and any other
means of communicating financial and economic data to interested external parties. Examples of
financial reporting other than financial statements are annual reports, prospectuses, reports filed with
the government, news releases, management forecasts or plans, and descriptions of an enterprise’s
social or environmental impact.
ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability to structure respo
3. If a company’s financial performance is measured accurately, fairly, and on a timely basis, the right
managers and companies are able to attract investment capital. To provide unreliable and irrelevant
information leads to poor capital allocation which adversely affects the securities market.
4. The objective of general purpose financial reporting is to provide financial information about the
reporting entity that is useful to present and potential equity investors, lenders, and other creditors
in decisions about providing resources to the entity through equity investments and loans or other
forms of credit. Information that is decision-useful to capital providers (investors) may also be useful
to other users of financial reporting who are not investors.
5. Investors are interested in financial reporting because it provides information that is useful for
making decisions (referred to as the decision-usefulness approach). When making these
decisions, investors are interested in assessing the company’s (1) ability to generate net cash
inflows and (2) management’s ability to protect and enhance the capital providers’ investments.
Financial reporting should therefore help investors assess the amounts, timing, and uncertainty of
prospective cash inflows from dividends or interest, and the proceeds from the sale, redemption,
or maturity of securities or loans. In order for investors to make these assessments, the economic
resources of an enterprise, the claims to those resources, and the changes in them must be
understood.
6. A common set of standards applied by all businesses and entities provides financial statements
which are reasonably comparable. Without a common set of standards, each enterprise could, and
would, develop its own theory structure and set of practices, resulting in noncomparability among
enterprises.
7. General-purpose financial statements are not likely to satisfy the specific needs of all interested
parties. Since the needs of interested parties such as creditors, managers, owners, governmental
agencies, and financial analysts vary considerably, it is unlikely that one set of financial statements
is equally appropriate for these varied uses.
6-1-4 Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
Intermediate Accounting 14th Edition by Kieso Weygandt Warfield
Chapter 1-24 ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability
to structure respo
CHAPTER 1
Financial Accounting and Accounting Standards
ASSIGNMENT CLASSIFICATION TABLE
Topics Questions Cases
1. Subject matter of accounting. 1 4
2. Environment of accounting. 2, 3, 29 6, 7
3. Role of principles, objectives, standards, 4, 5, 6, 7 1, 2, 3, 5
and accounting theory.
4. Historical development of GAAP. 8, 9, 10, 11 8
5. Authoritative pronouncements and rule- 12, 13, 14, 15, 3, 9, 11, 12, 13,
making bodies. 16, 17, 18, 19, 14, 16, 17
20, 21, 22, 23
6. Role of pressure groups. 23, 24, 25, 10, 19, 20
26, 27, 28
7. Ethical issues. 30 15, 18
Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only) 6-1-1
,ASSIGNMENT CHARACTERISTICS TABLE
ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability to structure respo
Level of Time
Item Description Difficulty (minutes)
CA1-1 FASB and standard-setting. Simple 15–20
CA1-2 GAAP and standard-setting. Simple 15–20
CA1-3 Financial reporting and accounting standards. Simple 15–20
CA1-4 Financial accounting. Simple 15–20
CA1-5 Objective of financial reporting. Moderate 20–25
CA1-6 Accounting numbers and the environment. Simple 10–15
CA1-7 Need for GAAP. Simple 15–20
CA1-8 AICPA‘s role in rule-making. Simple 20–25
CA1-9 FASB role in rule-making. Simple 20–25
CA1-10 Politicalization of GAAP. Complex 30–40
CA1-11 Models for setting GAAP. Simple 15–20
CA1-12 GAAP terminology. Moderate 30–40
CA1-13 Accounting organizations and documents issued. Simple 15–20
CA1-14 Accounting pronouncements. Simple 10–15
CA1-15 Rule-making Issues. Complex 20–25
CA1-16 Securities and Exchange Commission. Moderate 30–40
CA1-17 Rule-making process. Moderate 25–35
CA1-18 Financial reporting pressures. Moderate 25–35
CA1-19 Economic consequences. Moderate 25–35
CA1-20 GAAP and economic consequences. Moderate 25–35
6-1-2 Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
, SOLUTIONS TO CODIFICATION EXERCISES
ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability to structure respo
CE1-1
There is no answer to this requirement as it asks the student to register to use the Codification.
CE1-2
(a) The Codification Overview module illustrates three items (1) the topic structure (2) different methods of
accessing and viewing content, and (3) a summary of the unique features of the Codification
Research System.
(b) The Codification is intended to (1) become the single source of U.S. accounting standards and
(2) supersede all of the non-SEC documents used to populate the Codification.
CE1-3
The ―What’s New‖ page provides links to Codification content that has been recently issued. During the
verification phase, updates may result from either the issuance of Codification update instructions that
accompany new Standards or from changes to the Codification due to incorporation of constituent
feedback.
Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only) 6-1-3
, ANSWERS TO QUESTIONS
1. Financial accounting measures, classifies, and summarizes in report form those activities and that
information which relate to the enterprise as a whole for use by parties both internal and external to a
business enterprise. Managerial accounting also measures, classifies, and summarizes in report
form enterprise activities, but the communication is for the use of internal, managerial parties, and
relates more to subsystems of the entity. Managerial accounting is management decision oriented
and directed more toward product line, division, and profit center reporting.
2. Financial statements generally refer to the four basic financial statements: balance sheet, income
statement, statement of cash flows, and statement of changes in owners’ or stockholders’ equity.
Financial reporting is a broader concept; it includes the basic financial statements and any other
means of communicating financial and economic data to interested external parties. Examples of
financial reporting other than financial statements are annual reports, prospectuses, reports filed with
the government, news releases, management forecasts or plans, and descriptions of an enterprise’s
social or environmental impact.
ls for applying theory to practical scenarios. Furthermore, students often practice writing answers to past exams under timed conditions to enhance their ability to structure respo
3. If a company’s financial performance is measured accurately, fairly, and on a timely basis, the right
managers and companies are able to attract investment capital. To provide unreliable and irrelevant
information leads to poor capital allocation which adversely affects the securities market.
4. The objective of general purpose financial reporting is to provide financial information about the
reporting entity that is useful to present and potential equity investors, lenders, and other creditors
in decisions about providing resources to the entity through equity investments and loans or other
forms of credit. Information that is decision-useful to capital providers (investors) may also be useful
to other users of financial reporting who are not investors.
5. Investors are interested in financial reporting because it provides information that is useful for
making decisions (referred to as the decision-usefulness approach). When making these
decisions, investors are interested in assessing the company’s (1) ability to generate net cash
inflows and (2) management’s ability to protect and enhance the capital providers’ investments.
Financial reporting should therefore help investors assess the amounts, timing, and uncertainty of
prospective cash inflows from dividends or interest, and the proceeds from the sale, redemption,
or maturity of securities or loans. In order for investors to make these assessments, the economic
resources of an enterprise, the claims to those resources, and the changes in them must be
understood.
6. A common set of standards applied by all businesses and entities provides financial statements
which are reasonably comparable. Without a common set of standards, each enterprise could, and
would, develop its own theory structure and set of practices, resulting in noncomparability among
enterprises.
7. General-purpose financial statements are not likely to satisfy the specific needs of all interested
parties. Since the needs of interested parties such as creditors, managers, owners, governmental
agencies, and financial analysts vary considerably, it is unlikely that one set of financial statements
is equally appropriate for these varied uses.
6-1-4 Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
