SOLUTION MANUAL
Financial Accounting 11th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 13 | Complete
,TABLE OF CONTENTS
Chapter 1. Accounting in Action
Chapter 2. The Recording Process
Chapter 3. Adjusting the Accounts
Chapter 4. Completing the Accounting Cycle
Chapter 5. Accounting for Merchandising Operations
Chapter 6. Inventories
Chapter 7. Fraud, Internal Control and Cash
Chapter 8. Accounting for Receivables
Chapter 9. Plant Assets, Natural Resources and Intangible Assets
Chapter 10. Liabilities
Chapter 11. Corporations: Organisations, Stock Transactions and Stockholders’
Equity
Chapter 12. Statement of Cash Flows
Chapter 13. Financial Analysis: The Big Picture
,CHAPTER 1
Accounting in Action
ASSIGNMENT CLASSIFICATION TABLE
Brief A
Learning Objectives Questions Exercises Do It! Exercises Problems
1. Identify the activities and 1, 2, 3, 4, 5 1 1, 2
users associated with
accounting.
2. Explain the building blocks of 6, 7, 8, 9, 10 2 3, 4
accounting: ethics, principles,
and assumptions.
3. State the accounting 11, 12, 13, 14. 1, 2, 3, 4, 5 3 5
equation, and define its 22
components.
4. Analyze the effects of business 15, 16, 18 6, 7, 8, 9 4 6, 7, 8 1A, 2A, 4A,
transactions on theaccounting 5A
equation.
5. Describe the four financial 17, 19, 20, 21, 10, 11 5 8, 9, 10, 11, 2A, 3A, 4A,
statements and how they are 12, 13, 14, 15, 5A
prepared. 16, 17, 18
, ANSWERS TO QUESTIONS
1. True. Virtually every organization and person in our society uses accounting information. Businesses,
investors, creditors, government agencies, and not-for-profit organizations must use accounting
information to operate effectively.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
2. Accounting is the process of identifying, recording, and communicating the economic events of an
organization to interested users of the information. The first activity of the accounting process is to
identify economic events that are relevant to a particular business. Once identified and measured, the
events are recorded to provide a history of the financial activities of the organization. Recording consists
of keeping a chronological diary of these measured events in an orderly and systematic manner. The
information is communicated through the preparation and distribution of accounting reports, the most
common of which are called financial statements. A vital element in the communication process is the
accountant’s ability and responsibility to analyze and interpret the reported information.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
3. (a) Internal iusers iare ithose iwho iplan, iorganize, iand irun ithe ibusiness iand itherefore iare iofficers iand
iother idecision imakers.
(b) To iassist imanagement, iaccounting iprovides iinternal ireports. iExamples iinclude ifinancial
icomparisons iof ioperating ialternatives, iprojections iof i income ifrom inew isales i campaigns, iand
iforecasts iof i cash ineeds ifor ithe inext iyear.
LO i 1, i BT: i K, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Reporting, i IMA: i Reporting
4. (a) Investors i(owners) iuse iaccounting iinformation ito imake idecisions ito ibuy, ihold, ior isell istock.
(b) Creditors iuse iaccounting iinformation ito ievaluate ithe irisks iof igranting icredit ior ilending imoney.
LO i 1, i BT: i K, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Reporting, i IMA: i Reporting
5. False. iBookkeeping iusually iinvolves ionly ithe irecording iof ieconomic ievents iand itherefore iis ijust ione
ipart iof ithe ientire iaccounting iprocess. iAccounting, ion ithe iother ihand, iinvolves ithe ientire iprocess iof
iidentifying, irecording, iand icommunicating ieconomic ievents.
LO i 1, i BT: i C, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Reporting, i IMA: i Reporting
6. Harper iTravel iAgency ishould ireport ithe iland iat i$85,000 ion iits iDecember i31, i 2022 i balance isheet.
iThis iis itrue inot ionly iat ithe itime ithe iland iis ipurchased, ibut ialso iover ithe itime ithe iland iis iheld. iIn
idetermining iwhich imeasurement iprinciple ito iuse i(historical icost ior ifair ivalue) icompanies iweigh ithe
ifactual inature iof icost ifigures iversus ithe irelevance iof ifair ivalue. iIn igeneral, icompanies iuse ihistorical
icost. iOnly iin isituations iwhere iassets iare iactively itraded ido i companies iapply ithe ifair ivalue iprinciple.
LO i 2, i BT: i C, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Measurement, i Analysis i and i Interpretation
i IMA: iReporting
7. The imonetary iunit iassumption irequires ithat ionly itransaction idata icapable iof ibeing iexpressed iin
iterms iof imoney ibe iincluded iin ithe iaccounting irecords. iThis iassumption ienables iaccounting ito
iquantify i(measure) ieconomic ievents.
LO i2, iBT: iK, iDifficulty: iEasy, iTOT: i2 imin., iAACSB: iNone, iAICPA iFC: iMeasurement, iAnalysis iand iInterpretation i IMA:iReporting
Financial Accounting 11th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 13 | Complete
,TABLE OF CONTENTS
Chapter 1. Accounting in Action
Chapter 2. The Recording Process
Chapter 3. Adjusting the Accounts
Chapter 4. Completing the Accounting Cycle
Chapter 5. Accounting for Merchandising Operations
Chapter 6. Inventories
Chapter 7. Fraud, Internal Control and Cash
Chapter 8. Accounting for Receivables
Chapter 9. Plant Assets, Natural Resources and Intangible Assets
Chapter 10. Liabilities
Chapter 11. Corporations: Organisations, Stock Transactions and Stockholders’
Equity
Chapter 12. Statement of Cash Flows
Chapter 13. Financial Analysis: The Big Picture
,CHAPTER 1
Accounting in Action
ASSIGNMENT CLASSIFICATION TABLE
Brief A
Learning Objectives Questions Exercises Do It! Exercises Problems
1. Identify the activities and 1, 2, 3, 4, 5 1 1, 2
users associated with
accounting.
2. Explain the building blocks of 6, 7, 8, 9, 10 2 3, 4
accounting: ethics, principles,
and assumptions.
3. State the accounting 11, 12, 13, 14. 1, 2, 3, 4, 5 3 5
equation, and define its 22
components.
4. Analyze the effects of business 15, 16, 18 6, 7, 8, 9 4 6, 7, 8 1A, 2A, 4A,
transactions on theaccounting 5A
equation.
5. Describe the four financial 17, 19, 20, 21, 10, 11 5 8, 9, 10, 11, 2A, 3A, 4A,
statements and how they are 12, 13, 14, 15, 5A
prepared. 16, 17, 18
, ANSWERS TO QUESTIONS
1. True. Virtually every organization and person in our society uses accounting information. Businesses,
investors, creditors, government agencies, and not-for-profit organizations must use accounting
information to operate effectively.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
2. Accounting is the process of identifying, recording, and communicating the economic events of an
organization to interested users of the information. The first activity of the accounting process is to
identify economic events that are relevant to a particular business. Once identified and measured, the
events are recorded to provide a history of the financial activities of the organization. Recording consists
of keeping a chronological diary of these measured events in an orderly and systematic manner. The
information is communicated through the preparation and distribution of accounting reports, the most
common of which are called financial statements. A vital element in the communication process is the
accountant’s ability and responsibility to analyze and interpret the reported information.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
3. (a) Internal iusers iare ithose iwho iplan, iorganize, iand irun ithe ibusiness iand itherefore iare iofficers iand
iother idecision imakers.
(b) To iassist imanagement, iaccounting iprovides iinternal ireports. iExamples iinclude ifinancial
icomparisons iof ioperating ialternatives, iprojections iof i income ifrom inew isales i campaigns, iand
iforecasts iof i cash ineeds ifor ithe inext iyear.
LO i 1, i BT: i K, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Reporting, i IMA: i Reporting
4. (a) Investors i(owners) iuse iaccounting iinformation ito imake idecisions ito ibuy, ihold, ior isell istock.
(b) Creditors iuse iaccounting iinformation ito ievaluate ithe irisks iof igranting icredit ior ilending imoney.
LO i 1, i BT: i K, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Reporting, i IMA: i Reporting
5. False. iBookkeeping iusually iinvolves ionly ithe irecording iof ieconomic ievents iand itherefore iis ijust ione
ipart iof ithe ientire iaccounting iprocess. iAccounting, ion ithe iother ihand, iinvolves ithe ientire iprocess iof
iidentifying, irecording, iand icommunicating ieconomic ievents.
LO i 1, i BT: i C, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Reporting, i IMA: i Reporting
6. Harper iTravel iAgency ishould ireport ithe iland iat i$85,000 ion iits iDecember i31, i 2022 i balance isheet.
iThis iis itrue inot ionly iat ithe itime ithe iland iis ipurchased, ibut ialso iover ithe itime ithe iland iis iheld. iIn
idetermining iwhich imeasurement iprinciple ito iuse i(historical icost ior ifair ivalue) icompanies iweigh ithe
ifactual inature iof icost ifigures iversus ithe irelevance iof ifair ivalue. iIn igeneral, icompanies iuse ihistorical
icost. iOnly iin isituations iwhere iassets iare iactively itraded ido i companies iapply ithe ifair ivalue iprinciple.
LO i 2, i BT: i C, i Difficulty: i Easy, i TOT: i 2 i min., i AACSB: i None, i AICPA i FC: i Measurement, i Analysis i and i Interpretation
i IMA: iReporting
7. The imonetary iunit iassumption irequires ithat ionly itransaction idata icapable iof ibeing iexpressed iin
iterms iof imoney ibe iincluded iin ithe iaccounting irecords. iThis iassumption ienables iaccounting ito
iquantify i(measure) ieconomic ievents.
LO i2, iBT: iK, iDifficulty: iEasy, iTOT: i2 imin., iAACSB: iNone, iAICPA iFC: iMeasurement, iAnalysis iand iInterpretation i IMA:iReporting
