, Solution Manual For
Financial Accounting Tools for Business Decision Making, 9th Canadian Edition
Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell, Barbara Trenholm, Wayne
Irvine, Christopher D. Burnley
Chapter 1-14
CHAPTER 1
THE PURPOSE AND USE OF FINANCIAL STATEMENTS
LEARNING OBJECTIVES
1. Identify the uses and users of accounting information.
2. Describe the primary forms of business organization.
3. Explain the three main types of business activity.
4. Describe the purpose and content of each of the financial statements.
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES
AND BLOOM’S TAXONOMY
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
Questions
1. 1 K 7. 2 C 13. 3 C 19. 4 K 25. 4 C
2. 1 C 8. 2 C 14. 3 C 20. 4 K 26. 4 C
3. 1 K 9. 2 C 15. 3 C 21. 4 AP 27. 4 K
4. 1 C 10. 2 C 16. 3 C 22. 4 C 28. 4 C
5. 1 C 11. 2 C 17. 3 C 23. 4 K 29. 4 C
6. 1 C 12. 2 K 18. 3 C 24. 4 C 30. 4 C
Brief Exercises
1. 1 C 4. 3 C 7. 4 AP 10. 4 C
2. 1 C 5. 3 C 8. 4 K 11. 4 AN
3. 2 K 6. 4 AP 9. 4 K
Exercises
1. 1 C 4. 3 C 7. 4 AN 10. 4 AP 13. 4 AP
2. 2 C 5. 4 K 8. 4 AN 11. 4 AP 14. 4 AN
3. 3 K 6. 4 AP 9. 4 AP 12. 4 AP
Problems: Set A and B
1. 1 C 3. 3 C 5. 4 AP 7. 4 AP 9. 4 AN
2. 2 C 4. 4 K 6. 4 AN 8. 4 AN 10. 4 AN
Cases
1. 3,4 C 3. 3,4 AN 5. 3,4 AN 7. 4 AN 9 1,3 C
2. 1 C 4. 3,4 AN 6. 1 C 8. 1 E
Solutions Manual 1-1 Chapter 1
Copyright © 2023 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, Legend: The following abbreviations will appear throughout the solutions manual file.
LO Learning objective
BT Bloom's Taxonomy
K Knowledge
C Comprehension
AP Application
AN Analysis
S Synthesis
E Evaluation
Difficulty: Level of difficulty
S Simple
M Moderate
C Complex
Time: Estimated time to prepare in minutes
AACSB Association to Advance Collegiate Schools of Business
Communication Communication
Ethics Ethics
Analytic Analytic
Tech. Technology
Diversity Diversity
Reflec. Thinking Reflective Thinking
CPA CM CPA Canada Competency
cpa-e001 Ethics Professional and Ethical Behaviour
cpa-e002 PS and DM Problem-Solving and Decision-Making
cpa-e003 Comm. Communication
cpa-e004 Self-Mgt. Self-Management
cpa-e005 Team & Lead Teamwork and Leadership
cpa-t001 Reporting Financial Reporting
cpa-t002 Stat. & Gov. Strategy and Governance
cpa-t003 Mgt. Accounting Management Accounting
cpa-t004 Audit Audit and Assurance
cpa-t005 Finance Finance
cpa-t006 Tax Taxation
Solutions Manual 1-2 Chapter 1
Copyright © 2023 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, ANSWERS TO QUESTIONS
1. Accounting is the information system that identifies and records the
economic events of an organization, and then communicates them to a
wide variety of interested users.
LO 1 BT: K Difficulty: S TIME: 3 min. AACSB: None CPA: cpa-t001 CM: Reporting
2. (a) Internal users of accounting information work for the company and
include finance directors, marketing managers, human resource
personnel, production supervisors, and company officers. Internal
users have access to company information that is not available to
external users.
(b) Some external users may be individuals who are employees of the
company but are not directly involved in managing the company. As
a result, they do not have access to much information. External
users of accounting information generally do not work for the
company. The primary external users are investors and creditors.
Other external users include labour unions, customers, the Canada
Revenue Agency (CRA), and securities commissions.
LO 1 BT: C Difficulty: M TIME: 5 min. AACSB: None CPA: cpa-t001 CM: Reporting
3. Internal users may want the following questions answered:
Is there enough cash to purchase a new piece of equipment?
What price should we sell our product for to cover costs and to
maximize net income?
How many employees can we afford to hire this year?
Which product line is the most profitable?
How much of a pay raise can the company afford to give me?
External users may want the following questions answered:
Is the company earning enough to give me my required return on
investment?
Will the company be able to repay its debts as the debts come due?
Will the company stay in business long enough to service the products
I buy from it?
LO 1 BT: K Difficulty: M TIME: 5 min. AACSB: None CPA: cpa-t001 CM: Reporting
Solutions Manual 1-3 Chapter 1
Copyright © 2023 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
Financial Accounting Tools for Business Decision Making, 9th Canadian Edition
Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell, Barbara Trenholm, Wayne
Irvine, Christopher D. Burnley
Chapter 1-14
CHAPTER 1
THE PURPOSE AND USE OF FINANCIAL STATEMENTS
LEARNING OBJECTIVES
1. Identify the uses and users of accounting information.
2. Describe the primary forms of business organization.
3. Explain the three main types of business activity.
4. Describe the purpose and content of each of the financial statements.
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES
AND BLOOM’S TAXONOMY
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
Questions
1. 1 K 7. 2 C 13. 3 C 19. 4 K 25. 4 C
2. 1 C 8. 2 C 14. 3 C 20. 4 K 26. 4 C
3. 1 K 9. 2 C 15. 3 C 21. 4 AP 27. 4 K
4. 1 C 10. 2 C 16. 3 C 22. 4 C 28. 4 C
5. 1 C 11. 2 C 17. 3 C 23. 4 K 29. 4 C
6. 1 C 12. 2 K 18. 3 C 24. 4 C 30. 4 C
Brief Exercises
1. 1 C 4. 3 C 7. 4 AP 10. 4 C
2. 1 C 5. 3 C 8. 4 K 11. 4 AN
3. 2 K 6. 4 AP 9. 4 K
Exercises
1. 1 C 4. 3 C 7. 4 AN 10. 4 AP 13. 4 AP
2. 2 C 5. 4 K 8. 4 AN 11. 4 AP 14. 4 AN
3. 3 K 6. 4 AP 9. 4 AP 12. 4 AP
Problems: Set A and B
1. 1 C 3. 3 C 5. 4 AP 7. 4 AP 9. 4 AN
2. 2 C 4. 4 K 6. 4 AN 8. 4 AN 10. 4 AN
Cases
1. 3,4 C 3. 3,4 AN 5. 3,4 AN 7. 4 AN 9 1,3 C
2. 1 C 4. 3,4 AN 6. 1 C 8. 1 E
Solutions Manual 1-1 Chapter 1
Copyright © 2023 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, Legend: The following abbreviations will appear throughout the solutions manual file.
LO Learning objective
BT Bloom's Taxonomy
K Knowledge
C Comprehension
AP Application
AN Analysis
S Synthesis
E Evaluation
Difficulty: Level of difficulty
S Simple
M Moderate
C Complex
Time: Estimated time to prepare in minutes
AACSB Association to Advance Collegiate Schools of Business
Communication Communication
Ethics Ethics
Analytic Analytic
Tech. Technology
Diversity Diversity
Reflec. Thinking Reflective Thinking
CPA CM CPA Canada Competency
cpa-e001 Ethics Professional and Ethical Behaviour
cpa-e002 PS and DM Problem-Solving and Decision-Making
cpa-e003 Comm. Communication
cpa-e004 Self-Mgt. Self-Management
cpa-e005 Team & Lead Teamwork and Leadership
cpa-t001 Reporting Financial Reporting
cpa-t002 Stat. & Gov. Strategy and Governance
cpa-t003 Mgt. Accounting Management Accounting
cpa-t004 Audit Audit and Assurance
cpa-t005 Finance Finance
cpa-t006 Tax Taxation
Solutions Manual 1-2 Chapter 1
Copyright © 2023 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
, ANSWERS TO QUESTIONS
1. Accounting is the information system that identifies and records the
economic events of an organization, and then communicates them to a
wide variety of interested users.
LO 1 BT: K Difficulty: S TIME: 3 min. AACSB: None CPA: cpa-t001 CM: Reporting
2. (a) Internal users of accounting information work for the company and
include finance directors, marketing managers, human resource
personnel, production supervisors, and company officers. Internal
users have access to company information that is not available to
external users.
(b) Some external users may be individuals who are employees of the
company but are not directly involved in managing the company. As
a result, they do not have access to much information. External
users of accounting information generally do not work for the
company. The primary external users are investors and creditors.
Other external users include labour unions, customers, the Canada
Revenue Agency (CRA), and securities commissions.
LO 1 BT: C Difficulty: M TIME: 5 min. AACSB: None CPA: cpa-t001 CM: Reporting
3. Internal users may want the following questions answered:
Is there enough cash to purchase a new piece of equipment?
What price should we sell our product for to cover costs and to
maximize net income?
How many employees can we afford to hire this year?
Which product line is the most profitable?
How much of a pay raise can the company afford to give me?
External users may want the following questions answered:
Is the company earning enough to give me my required return on
investment?
Will the company be able to repay its debts as the debts come due?
Will the company stay in business long enough to service the products
I buy from it?
LO 1 BT: K Difficulty: M TIME: 5 min. AACSB: None CPA: cpa-t001 CM: Reporting
Solutions Manual 1-3 Chapter 1
Copyright © 2023 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited.
