Solution Manual
Accounting What The Numbers Mean
13th Edition by David Marshall
All Chapters 1 - 16
,CHAPTER
1
Accounting—Present and Past u u
CHAPTER uOUTLINE:
I. What uIs uAccounting?
A. Definition
B. Uses uof uAccounting uInformation
C. Classifications
1. Financial uAccounting
2. Managerial uAccounting u/ uCost uAccounting
3. Auditing u— uPublic uAccounting
4. Internal uAuditing
5. Governmental uand uNot-for-Profit uAccounting
6. Income uTax uAccounting
II. How uHas uAccounting uDeveloped?
A. Early uHistory
B. The uAccounting uProfession uin uthe uUnited uStates
C. Financial uAccounting uStandard uSetting uat uthe uPresent uTime
1. Financial uAccounting uStandards uBoard
2. Standards uare uEvolving
D. Standards ufor uOther uTypes uof uAccounting
1. Managerial uAccounting u/ uCost uAccounting
2. Auditing
3. Governmental uand uNot-for-Profit uAccounting
4. Income uTax uAccounting
E. International uAccounting uStandards
F. Ethics uand uthe uAccounting uProfession
III. The uConceptual uFramework
A. Context
B. Summary uof uConcepts uStatement u No. u8, uChapter u1 u — uThe uObjective uof
uGeneral uPurposeuFinancial uReporting
C. Objectives uof uFinancial uReporting ufor uNonbusiness uOrganizations
IV. Plan uof uthe uBook
TEACHING/LEARNING uOBJECTIVES:
,Principal:
1. To upresent ua udefinition uof uaccounting.
2. To uidentify uand udescribe udifferent u classifications uof uaccounting.
3. To uemphasize uthat u financial uaccounting ustandards uare unot u a u―fixed ucode uof
urules,‖ ubut u are uestablished uin uresponse uto uuser uneeds uand ubusiness
udevelopments. uAccountants uneed uto uapplyuprofessional ujudgment u in uthe
uapplication uof uaccounting uprinciples.
4. To uemphasize uthe urole uand usources uof uethics ufor uthe uaccounting uprofession.
Supporting:
5. To usummarize uhow uaccounting uhas uevolved uover utime.
6. To uidentify usources uof ustandards ufor uother utypes uof uaccounting uand uto
ucontrast uthese uwithufinancial uaccounting ustandards.
7. To uintroduce uthe uissues uassociated uwith uthe udevelopment uof
uinternational uaccountingustandards.
8. To udescribe uthe ucontext uof uthe uFASB uConceptual uFramework uproject.
9. To usummarize uConcepts uStatement uNo. u8, uChapter u1 u— uThe uObjective uof
uGeneral uPurposeuFinancial uReporting.
10. To urelate uthe uobjectives uof ufinancial ureporting ufor unonbusiness
uorganizations uto uthose uofubusiness uenterprises.
TEACHING uOBSERVATIONS/ASSIGNMENT uSUGGESTIONS:
1. Students ushould ube uput uon unotice uabout uthe ujargon uof uaccounting, uthe uuse
uof usynonymous uterms, uthe uimportance uof uthe ucontext uwithin uwhich ua uterm uis
uused, uand uthe uneed ufor uprecisionuin uthe uuse uof uterminology. uThe u first
u example uof ujargon uis uthe uterm uentity.
2. When udiscussing u"Auditing u— uPublic uAccounting," uhave ustudents ufind uthe
uauditors' uopinionuin uthe uCampbell uSoup uCompany u2020 uAnnual uReport u(see
upages u87-88 uof uthe uAppendix). uEmphasize uthat u a u"clean uopinion" u is unot ua
, u"clean ubill uof uhealth."
3. Discuss uthe uSummary uof uConcepts uStatement uNo. u8, uChapter u1 u— uThe
uObjective uof uFinancialuReporting, u in udetail.
4. Assign uExercise u1-1. uEncourage ustudents uto uexperiment uwith uwebsites uthat
uare uof uinterest. uInuaddition, uor uas uan ualternative uto uhaving ustudents urequest
utheir uown uannual ureports, udistribute ureports uthat u have u been uobtained uby uthe
u instructor.
5. Use uExercise u1-5 uto ugenerate udiscussion uabout uthe uimportance uof uethical
ustandards uin ugeneral uand uindependence u(in uboth uappearance uand ufact) uin
uparticular. uFollow uup uwith ua ubrief ulook uat uExercise u1-7 uconcerning uaudit
u independence ustandards.
SOLUTIONS:
E1.3. This uexercise uprovides uan uopportunity uto ugauge uwhere uthe ustudents
uare uin uterms uofutheir uprior ubackground uin uaccounting, ube uit upractical
uor ueducational, uand uto uclear uup usome uof uthe ucommon
umisconceptions u(i.e., u to uexplain uthat u accounting ugoes
beyond uthe u―how uto‖ uaspects uof ubookkeeping uand u involves uthe uuse
uof ujudgment).
E1.4. This uexercise uprovides uan uopportunity uto ualign ustudent uand uinstructor
uexpectations.uFor ufirst-time uinstructors uin uthis ucourse, uor ufor uthose
uhaving ua udiverse ustudent ugroup, uyou uwill uget ua uglimpse uat uthe
ucommon uperceptions ustudents uhave uconcerning uthe ucourse ucontent,
ulevel uof udifficulty, uand u methods uof upresentation,
testing/evaluation, uand ugrading.
E1.5. The uprincipal ufactors uJim uSandrolini umust uconsider uare uhis ucompetence
uand uindependence. uIs uhe ucompetent uto uprepare ufinancial ustatements
ufor ua ucompany uthatuoperates uin ua udifferent uindustry uthan uthe uone uin
uwhich uhe uworks? uAccepting ua ucontingent u fee uarrangement u would
unormally ucause uan uimpairment u of uhis
independence ubecause uhe uwould udirectly ubenefit u if uthe uloan uwere uto
ube uapproved.
Accounting What The Numbers Mean
13th Edition by David Marshall
All Chapters 1 - 16
,CHAPTER
1
Accounting—Present and Past u u
CHAPTER uOUTLINE:
I. What uIs uAccounting?
A. Definition
B. Uses uof uAccounting uInformation
C. Classifications
1. Financial uAccounting
2. Managerial uAccounting u/ uCost uAccounting
3. Auditing u— uPublic uAccounting
4. Internal uAuditing
5. Governmental uand uNot-for-Profit uAccounting
6. Income uTax uAccounting
II. How uHas uAccounting uDeveloped?
A. Early uHistory
B. The uAccounting uProfession uin uthe uUnited uStates
C. Financial uAccounting uStandard uSetting uat uthe uPresent uTime
1. Financial uAccounting uStandards uBoard
2. Standards uare uEvolving
D. Standards ufor uOther uTypes uof uAccounting
1. Managerial uAccounting u/ uCost uAccounting
2. Auditing
3. Governmental uand uNot-for-Profit uAccounting
4. Income uTax uAccounting
E. International uAccounting uStandards
F. Ethics uand uthe uAccounting uProfession
III. The uConceptual uFramework
A. Context
B. Summary uof uConcepts uStatement u No. u8, uChapter u1 u — uThe uObjective uof
uGeneral uPurposeuFinancial uReporting
C. Objectives uof uFinancial uReporting ufor uNonbusiness uOrganizations
IV. Plan uof uthe uBook
TEACHING/LEARNING uOBJECTIVES:
,Principal:
1. To upresent ua udefinition uof uaccounting.
2. To uidentify uand udescribe udifferent u classifications uof uaccounting.
3. To uemphasize uthat u financial uaccounting ustandards uare unot u a u―fixed ucode uof
urules,‖ ubut u are uestablished uin uresponse uto uuser uneeds uand ubusiness
udevelopments. uAccountants uneed uto uapplyuprofessional ujudgment u in uthe
uapplication uof uaccounting uprinciples.
4. To uemphasize uthe urole uand usources uof uethics ufor uthe uaccounting uprofession.
Supporting:
5. To usummarize uhow uaccounting uhas uevolved uover utime.
6. To uidentify usources uof ustandards ufor uother utypes uof uaccounting uand uto
ucontrast uthese uwithufinancial uaccounting ustandards.
7. To uintroduce uthe uissues uassociated uwith uthe udevelopment uof
uinternational uaccountingustandards.
8. To udescribe uthe ucontext uof uthe uFASB uConceptual uFramework uproject.
9. To usummarize uConcepts uStatement uNo. u8, uChapter u1 u— uThe uObjective uof
uGeneral uPurposeuFinancial uReporting.
10. To urelate uthe uobjectives uof ufinancial ureporting ufor unonbusiness
uorganizations uto uthose uofubusiness uenterprises.
TEACHING uOBSERVATIONS/ASSIGNMENT uSUGGESTIONS:
1. Students ushould ube uput uon unotice uabout uthe ujargon uof uaccounting, uthe uuse
uof usynonymous uterms, uthe uimportance uof uthe ucontext uwithin uwhich ua uterm uis
uused, uand uthe uneed ufor uprecisionuin uthe uuse uof uterminology. uThe u first
u example uof ujargon uis uthe uterm uentity.
2. When udiscussing u"Auditing u— uPublic uAccounting," uhave ustudents ufind uthe
uauditors' uopinionuin uthe uCampbell uSoup uCompany u2020 uAnnual uReport u(see
upages u87-88 uof uthe uAppendix). uEmphasize uthat u a u"clean uopinion" u is unot ua
, u"clean ubill uof uhealth."
3. Discuss uthe uSummary uof uConcepts uStatement uNo. u8, uChapter u1 u— uThe
uObjective uof uFinancialuReporting, u in udetail.
4. Assign uExercise u1-1. uEncourage ustudents uto uexperiment uwith uwebsites uthat
uare uof uinterest. uInuaddition, uor uas uan ualternative uto uhaving ustudents urequest
utheir uown uannual ureports, udistribute ureports uthat u have u been uobtained uby uthe
u instructor.
5. Use uExercise u1-5 uto ugenerate udiscussion uabout uthe uimportance uof uethical
ustandards uin ugeneral uand uindependence u(in uboth uappearance uand ufact) uin
uparticular. uFollow uup uwith ua ubrief ulook uat uExercise u1-7 uconcerning uaudit
u independence ustandards.
SOLUTIONS:
E1.3. This uexercise uprovides uan uopportunity uto ugauge uwhere uthe ustudents
uare uin uterms uofutheir uprior ubackground uin uaccounting, ube uit upractical
uor ueducational, uand uto uclear uup usome uof uthe ucommon
umisconceptions u(i.e., u to uexplain uthat u accounting ugoes
beyond uthe u―how uto‖ uaspects uof ubookkeeping uand u involves uthe uuse
uof ujudgment).
E1.4. This uexercise uprovides uan uopportunity uto ualign ustudent uand uinstructor
uexpectations.uFor ufirst-time uinstructors uin uthis ucourse, uor ufor uthose
uhaving ua udiverse ustudent ugroup, uyou uwill uget ua uglimpse uat uthe
ucommon uperceptions ustudents uhave uconcerning uthe ucourse ucontent,
ulevel uof udifficulty, uand u methods uof upresentation,
testing/evaluation, uand ugrading.
E1.5. The uprincipal ufactors uJim uSandrolini umust uconsider uare uhis ucompetence
uand uindependence. uIs uhe ucompetent uto uprepare ufinancial ustatements
ufor ua ucompany uthatuoperates uin ua udifferent uindustry uthan uthe uone uin
uwhich uhe uworks? uAccepting ua ucontingent u fee uarrangement u would
unormally ucause uan uimpairment u of uhis
independence ubecause uhe uwould udirectly ubenefit u if uthe uloan uwere uto
ube uapproved.
