Solutions Manual For Survey of Accounting 7th Edition by Thomas Edmonds, Christopher Edmonds, Philip Olds | ultimate guide 100% VERIFIED A+

, Survey 7e – Chapter 1 – Solutions Manual ju ju ju ju ju ju ju




SOLUTIONS TO QUESTIONS - CHAPTER 1 ju ju ju ju ju




1. Stakeholders are the parties that use accounting information. ju ju ju ju ju ju ju




Stakeholders with a direct interest include owners, managers, ju ju ju ju ju ju ju




creditors, suppliers, and employees. These individuals are
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directly affected by what happens to the business.
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Stakeholders with an indirect interest include financial analysts, ju ju ju ju ju ju ju




brokers, attorneys, government regulators, and news reporters.
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These individuals use information in the financial reports to
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advise and influence their clients.
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Students may give many different answers under the above ju ju ju ju ju ju ju ju




categories depending on their level of experience in business.
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All students are direct users of accounting information related to
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tuition and fees, financial aid, and account balances.
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2. Accounting provides information that is useful in making ju ju ju ju ju ju ju




decisions by all participants in the market for resource goods
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and services, both profit-oriented and nonprofit oriented.
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Because accounting’s role is so important, it is often called
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the language of business.
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3. The primary mechanism used to allocate resources in the
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U.S. is competition for resources in the open market.
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4. A market is a group of people or organizations that come
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together for the purpose of exchanging items of value.
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5. The market for business resources involves three distinct
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participants: consumers, conversion agents, and resource
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owners. See Exhibit 1-1 that illustrates how market trilogy is
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1-1

, involved in resource allocation.
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1-2

, Survey 7e – Chapter 1 – Solutions Manual
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6. Financial Resource: money j u j u




Physical Resource: natural resources (i.e. land, forests, mine ore,
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petroleum, etc.), buildings, machinery and equipment, furniture
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and fixtures
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Labor Resource: includes both intellectual and physical labor; i.e.
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employees
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7. Investors expect a distribution of the business’s profits as a
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return on their financial investment (capital allocation).
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Creditors lend financial resources to businesses and receive
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interest as a return or profit on the loan.
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8. Financial accounting provides information that is useful to
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external resource providers.
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Managerial accounting provides information that is
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useful to managers in operating an organization (i.e.,
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internal users).
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9. Not-for-profit or nonprofit entities provide goods or services to ju ju ju ju ju ju ju ju




consumers for humanitarian or special reasons rather than to
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earn a profit for owners. For example, certain not-for-profit
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entities allocate resources to provide for research of diseases
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or social/environmental welfare; others allocate resources to
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promote the arts and provide education.
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10. The U.S. rules of accounting information measurement are
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called generally accepted accounting principles (GAAP).
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