Solutions Manual for College Accounting A Practical
x x x x x x x
xApproach 15th Canadian Edition by Jeffrey Slater, Debra
x x x x x x x x
x Good
,1
Accounting Concepts and x x
Procedures:An Introduction
x x x
ANSWERS xTO xDISCUSSION xQUESTIONS xAND
xCRITICAL xTHINKING/ETHICAL xCASE
1. The x functions x of x accounting x are x to x analyze, x record, x classify, x summarize,
x report x and xinterpret x information.
2. Sole x proprietorship—one x owner, x unlimited x liability; x easy x to x form x Partnership—two x or
x more xowners; x unlimited x liability, x easy x to x form x Corporation—one x or x more
x shareholders; x limited xliability; x more x difficult x to x form.
3. Service, x merchandising, x or x manufacturing.
4. The x objective x of x accounting x is x to x provide x relevant, x timely x information x for x user
x decision x making. x Accountants x must x behave x in x an x ethical x manner x so x that x the
x information x they x provide xwill x be x trustworthy x and, x therefore, x useful x for x all x decisions.
x Ethics x are x moral x principles x that xguide x the x conduct x of x individuals. x Sometimes x business
x managers x and x accountants x behave x in x an xunethical x manner.
5. The x three x elements x of x the x basic x accounting x equation x are x assets, x liabilities, x owner’s x equity.
6. Capital x is x the x owner’s x current x investment x or x equity x in x the x assets x of x a x business. x It x is x one x subdivision x of
owner’s x equity.
7. True. x The x sum x of x the x left x side x of x the x equation x must x equal x the x sum x of x the x right x side x of x the x equation.
8. False. x It x is x the x income x statement x that x tells x how x well x the x company x has x performed.
9. False. x Revenue x is x a x subdivision x of x owner’s x equity.
10. Owner’s x equity x is x subdivided x into x Capital, x Withdrawals, x Revenue, x and x Expenses.
11. False. x It x is x a x subdivision x of x owner’s x equity.
12. Reject. x As x expenses x increase x and x revenue x remains x the x same, x owner’s x equity x decreases.
13. Revenue x less x Expenses; x an x income x statement x shows x performance—profit x or x loss x for x the x period.
14. False. x It x calculates x ending x capital.
15. The x question x in x this x case x is x whether x Paul x should x be x allowed x to x ―pad‖ x his x expense
x account x with x an x additional x $100 x of x expenses. x Paul x should x be x allowed x to x charge
x only x those x items x that xare x business x related. x Paul’s x argument x that x he x is x entitled x to x an
x additional x $100 x is x not x a x valid xassumption. x However, x he x should x be x allocated x money
x for x any x business x expenses x during x the xweekend. x Paul x should x also x ask x his x employer x for
x additional x compensation x for x working x during x his xnon x scheduled x time. x The x important
x point x is x that x accountants x need x to x be x seen x as x being x ethical xand x should x not x do
x unethical x activities.
, SOLUTIONS x TO x CLASSROOM x DEMONSTRATION x EXERCISES
CDE1. a. A CDE4. $24,000 x($12,000 x+ x$12,000) CDE8. a. IS
b. A b. BS
c. L CDE5. c. J. xPenny, xCapital c. BS
d. A d. Advertising xExpense d. BS
e. OE f. Taxi xFees xEarned e. IS
f. A g. J. xPenny, xWithdrawls f. IS
g. OE
h. BS
CDE2. a. Liabilities xand xor CDE6. c. Accounts xPayable
b. Assets d. Grooming xFees CDE9 a. OE
xEarned b. BS
c. Accounts xPayable c. BS
d. IS
CDE3. a. I CDE7. a.
b. S b.
d.
CDE10.
1. Balance x Sheet
2. Assets
3. Liabilities
4. Accounting x Equation
5. Accounts x Payable
6. Service
7. Owner’s x Equity
8. Accounts x Receivable
9. Transaction
10. Creditor
SOLUTIONS x TO x EXERCISES—SET x A
E1-1A.
a. $15,000 ($19,000 x − x $4,000)
b. $15,000 ($ x 6,000 x + x $9,000)
c. $ x 6,000 ($10,000 x − x $4,000)
E1-2A.
1. Service 6. Service
2. Merchandise 7. Service
3. Service 8. Manufacturer
4. Merchandise 9. Manufacturer
5. Merchandise 10. Merchandise
E1-3A.
1-3A x Solutions
1. B
2. B
3. B
4. A
5. D
6. D
, 7. D
8. B
9. C
10. A
x x x x x x x
xApproach 15th Canadian Edition by Jeffrey Slater, Debra
x x x x x x x x
x Good
,1
Accounting Concepts and x x
Procedures:An Introduction
x x x
ANSWERS xTO xDISCUSSION xQUESTIONS xAND
xCRITICAL xTHINKING/ETHICAL xCASE
1. The x functions x of x accounting x are x to x analyze, x record, x classify, x summarize,
x report x and xinterpret x information.
2. Sole x proprietorship—one x owner, x unlimited x liability; x easy x to x form x Partnership—two x or
x more xowners; x unlimited x liability, x easy x to x form x Corporation—one x or x more
x shareholders; x limited xliability; x more x difficult x to x form.
3. Service, x merchandising, x or x manufacturing.
4. The x objective x of x accounting x is x to x provide x relevant, x timely x information x for x user
x decision x making. x Accountants x must x behave x in x an x ethical x manner x so x that x the
x information x they x provide xwill x be x trustworthy x and, x therefore, x useful x for x all x decisions.
x Ethics x are x moral x principles x that xguide x the x conduct x of x individuals. x Sometimes x business
x managers x and x accountants x behave x in x an xunethical x manner.
5. The x three x elements x of x the x basic x accounting x equation x are x assets, x liabilities, x owner’s x equity.
6. Capital x is x the x owner’s x current x investment x or x equity x in x the x assets x of x a x business. x It x is x one x subdivision x of
owner’s x equity.
7. True. x The x sum x of x the x left x side x of x the x equation x must x equal x the x sum x of x the x right x side x of x the x equation.
8. False. x It x is x the x income x statement x that x tells x how x well x the x company x has x performed.
9. False. x Revenue x is x a x subdivision x of x owner’s x equity.
10. Owner’s x equity x is x subdivided x into x Capital, x Withdrawals, x Revenue, x and x Expenses.
11. False. x It x is x a x subdivision x of x owner’s x equity.
12. Reject. x As x expenses x increase x and x revenue x remains x the x same, x owner’s x equity x decreases.
13. Revenue x less x Expenses; x an x income x statement x shows x performance—profit x or x loss x for x the x period.
14. False. x It x calculates x ending x capital.
15. The x question x in x this x case x is x whether x Paul x should x be x allowed x to x ―pad‖ x his x expense
x account x with x an x additional x $100 x of x expenses. x Paul x should x be x allowed x to x charge
x only x those x items x that xare x business x related. x Paul’s x argument x that x he x is x entitled x to x an
x additional x $100 x is x not x a x valid xassumption. x However, x he x should x be x allocated x money
x for x any x business x expenses x during x the xweekend. x Paul x should x also x ask x his x employer x for
x additional x compensation x for x working x during x his xnon x scheduled x time. x The x important
x point x is x that x accountants x need x to x be x seen x as x being x ethical xand x should x not x do
x unethical x activities.
, SOLUTIONS x TO x CLASSROOM x DEMONSTRATION x EXERCISES
CDE1. a. A CDE4. $24,000 x($12,000 x+ x$12,000) CDE8. a. IS
b. A b. BS
c. L CDE5. c. J. xPenny, xCapital c. BS
d. A d. Advertising xExpense d. BS
e. OE f. Taxi xFees xEarned e. IS
f. A g. J. xPenny, xWithdrawls f. IS
g. OE
h. BS
CDE2. a. Liabilities xand xor CDE6. c. Accounts xPayable
b. Assets d. Grooming xFees CDE9 a. OE
xEarned b. BS
c. Accounts xPayable c. BS
d. IS
CDE3. a. I CDE7. a.
b. S b.
d.
CDE10.
1. Balance x Sheet
2. Assets
3. Liabilities
4. Accounting x Equation
5. Accounts x Payable
6. Service
7. Owner’s x Equity
8. Accounts x Receivable
9. Transaction
10. Creditor
SOLUTIONS x TO x EXERCISES—SET x A
E1-1A.
a. $15,000 ($19,000 x − x $4,000)
b. $15,000 ($ x 6,000 x + x $9,000)
c. $ x 6,000 ($10,000 x − x $4,000)
E1-2A.
1. Service 6. Service
2. Merchandise 7. Service
3. Service 8. Manufacturer
4. Merchandise 9. Manufacturer
5. Merchandise 10. Merchandise
E1-3A.
1-3A x Solutions
1. B
2. B
3. B
4. A
5. D
6. D
, 7. D
8. B
9. C
10. A
