Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 BE
Accounting in Action BE BE
ASSIGNMENT CLASSIFICATION TABLE BE BE
Brief Exe BE A
Learning Objectives BE Questions rcises Do It!
BE Exercises Problems
1. 1, 2, 3, 4, 5
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Identify the activities a BE BE BE
ndusers associated with
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accounting.
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2. Explain the building blocks of 6, 7, 8, 9, 10
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accounting: ethics, principles BE BE
,and assumptions.
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3. 11, 12, 13, 14. 1, 2, 3, 4, 5
BE BE BE BE BE BE BE 3 5
State the accounting BE BE BE 22
equation, and define it BE BE BE
scomponents.
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E
4. 15, 16, 18
BE BE 6, 7, 8, 9
BE BE BE 4 6, 7, 8
BE BE 1A, 2A, 4A,
BE BE
Analyze the effects of busi BE BE BE BE 5A
ness transactions on theac
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E
counting equation. BE
5. 17, 19, 20, 21, 10, 11
BE BE BE BE 5 8, 9, 10, 11,
BE BE2A, 3A, 4A,
BE BE BE
Describe the four financial BE BE BE BE 12, 13, 14, 15, 5A
BE BE BE
statements and how they ar BE BE BE BE 16, 17, 18
BE BE
eprepared.
B
E
obtain permission to reuse this material is available at http://www.wiley.com/go/permissi
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ons.
, © 2021 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
transmitted,in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. A
B
E BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
dvice on how to
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1-2 ©BE2021BEJohnBEWileyBE&BESons,BEInc.BEAllBErightsBEreserved.B E Weygandt,BEFinancialBE&BEManagerialBEAccountingBE4e,BESolutionsBEManualBEBEB E (ForBE Instru
ctorBEUseBEOnly)
, ANSWERS TO QUESTIONS BE BE
1. True. Virtually every organization and person in our society uses accounting information. Busin
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esses, investors, creditors, government agencies, and not-for-
BE BE BE BE BE BE
profit organizations must use accounting information to operate effectively.
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LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
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2. Accounting is the process of identifying, recording, and communicating the economic events
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of an organization to interested users of the information. The first activity of the accounting pro
E BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
cess is to identify economic events that are relevant to a particular business. Once identified a
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nd measured, the events are recorded to provide a history of the financial activities of the org
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anization. Recording consists of keeping a chronological diary of these measured events in an
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E
orderly and systematic manner. The information is communicated through the preparation and
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distribution of accounting reports, the most common of which are called financial state
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ments.A vital element in the communication process is the accountant’s ability and responsibilit
B
E BE BE BE BE BE BE BE BE BE BE BE BE
y to analyze and interpret the reported information.
BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E B E B E B E BE BE B E BE BE BE BE BE BE BE BE
3. (a) Internal users are those who plan, organize, and run the business and therefore are officer
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
s and other decision makers.
BE BE BE BE
(b) To assist management, accounting provides internal reports. Examples include financial c
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omparisons of operating alternatives, projections of income from new sales campaigns,
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and forecasts of cash needs for the next year.
BE BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E BE B E B E B E BE BE BE BE B E BE BE B E B E B E
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell stock.
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(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
BE BE BE BE BE BE BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E B E B E BE B E BE B E BE B E B E BE BE BE B E BE
5. False. Bookkeeping usually involves only the recording of economic events and therefore is ju
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st one part of the entire accounting process. Accounting, on the other hand, involves the entire
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process of identifying, recording, and communicating economic events.
BE BE BE BE BE BE BE BE
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
BE BE B E B E BE BE BE BE BE B E BE BE BE BE BE
6. Harper Travel Agency should report the land at $85,000 on its December 31, 2022 balance
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sheet. This is true not only at the time the land is purchased, but also over the time the land i
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s held. In determining which measurement principle to use (historical cost or fair value) compa
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nies weigh the factual nature of cost figures versus the relevance of fair value. In general, com
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panies use historical cost. Only in situations where assets are actively traded do companies a
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pply the fair value principle.
BE BE BE BE
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
B E B E B E B E B E B E B E B E B E B E B E B E B E BE B E B E
IMA: Reporting
B E BE
7. The monetary unit assumption requires that only transaction data capable of being expressed i
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n terms of money be included in the accounting records. This assumption enables accounting
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to quantify (measure) economic events.
BE BE BE BE
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation IMA:
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE B E B
E
Reporting
obtain permission to reuse this material is available at http://www.wiley.com/go/permissi
BE BE BE BE BE BE BE BE BE
ons.
,
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 BE
Accounting in Action BE BE
ASSIGNMENT CLASSIFICATION TABLE BE BE
Brief Exe BE A
Learning Objectives BE Questions rcises Do It!
BE Exercises Problems
1. 1, 2, 3, 4, 5
BE BE BE BE 1 1, 2BE
Identify the activities a BE BE BE
ndusers associated with
B
E BE BE
accounting.
BE
2. Explain the building blocks of 6, 7, 8, 9, 10
BE BE BE BE BE BE BE BE BE BE 2 3, 4BE
accounting: ethics, principles BE BE
,and assumptions.
B
E BE
3. 11, 12, 13, 14. 1, 2, 3, 4, 5
BE BE BE BE BE BE BE 3 5
State the accounting BE BE BE 22
equation, and define it BE BE BE
scomponents.
B
E
4. 15, 16, 18
BE BE 6, 7, 8, 9
BE BE BE 4 6, 7, 8
BE BE 1A, 2A, 4A,
BE BE
Analyze the effects of busi BE BE BE BE 5A
ness transactions on theac
BE BE BE B
E
counting equation. BE
5. 17, 19, 20, 21, 10, 11
BE BE BE BE 5 8, 9, 10, 11,
BE BE2A, 3A, 4A,
BE BE BE
Describe the four financial BE BE BE BE 12, 13, 14, 15, 5A
BE BE BE
statements and how they ar BE BE BE BE 16, 17, 18
BE BE
eprepared.
B
E
obtain permission to reuse this material is available at http://www.wiley.com/go/permissi
BE BE BE BE BE BE BE BE BE
ons.
, © 2021 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
transmitted,in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. A
B
E BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
dvice on how to
BE BE BE
1-2 ©BE2021BEJohnBEWileyBE&BESons,BEInc.BEAllBErightsBEreserved.B E Weygandt,BEFinancialBE&BEManagerialBEAccountingBE4e,BESolutionsBEManualBEBEB E (ForBE Instru
ctorBEUseBEOnly)
, ANSWERS TO QUESTIONS BE BE
1. True. Virtually every organization and person in our society uses accounting information. Busin
BE BE BE BE BE BE BE BE BE BE BE BE
esses, investors, creditors, government agencies, and not-for-
BE BE BE BE BE BE
profit organizations must use accounting information to operate effectively.
BE BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E B E BE BE BE BE B E BE B E BE BE BE BE BE BE
2. Accounting is the process of identifying, recording, and communicating the economic events
BE BE BE BE BE BE BE B E B E BE BE B
of an organization to interested users of the information. The first activity of the accounting pro
E BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
cess is to identify economic events that are relevant to a particular business. Once identified a
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
nd measured, the events are recorded to provide a history of the financial activities of the org
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
anization. Recording consists of keeping a chronological diary of these measured events in an
BE BE BE BE BE BE BE BE BE BE BE BE BE B
E
orderly and systematic manner. The information is communicated through the preparation and
BE BE BE BE BE BE BE BE BE BE BE BE
distribution of accounting reports, the most common of which are called financial state
BE BE B E B E B E B E B E B E BE B E BE BE
ments.A vital element in the communication process is the accountant’s ability and responsibilit
B
E BE BE BE BE BE BE BE BE BE BE BE BE
y to analyze and interpret the reported information.
BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E B E B E B E BE BE B E BE BE BE BE BE BE BE BE
3. (a) Internal users are those who plan, organize, and run the business and therefore are officer
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
s and other decision makers.
BE BE BE BE
(b) To assist management, accounting provides internal reports. Examples include financial c
BE BE BE BE BE BE BE BE BE BE
omparisons of operating alternatives, projections of income from new sales campaigns,
BE BE BE BE BE B E BE BE BE BE BE
and forecasts of cash needs for the next year.
BE BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E BE B E B E B E BE BE BE BE B E BE BE B E B E B E
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell stock.
BE BE BE BE BE BE BE BE BE BE BE BE BE
(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
BE BE BE BE BE BE BE BE BE BE BE BE BE
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
B E B E B E BE B E BE B E BE B E B E BE BE BE B E BE
5. False. Bookkeeping usually involves only the recording of economic events and therefore is ju
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st one part of the entire accounting process. Accounting, on the other hand, involves the entire
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
process of identifying, recording, and communicating economic events.
BE BE BE BE BE BE BE BE
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
BE BE B E B E BE BE BE BE BE B E BE BE BE BE BE
6. Harper Travel Agency should report the land at $85,000 on its December 31, 2022 balance
BE BE BE BE BE BE BE BE BE BE BE BE B E B E BE
sheet. This is true not only at the time the land is purchased, but also over the time the land i
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
s held. In determining which measurement principle to use (historical cost or fair value) compa
BE BE BE BE BE BE BE BE BE BE BE BE BE BE
nies weigh the factual nature of cost figures versus the relevance of fair value. In general, com
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE
panies use historical cost. Only in situations where assets are actively traded do companies a
BE BE BE BE BE BE BE BE BE BE BE BE B E BE
pply the fair value principle.
BE BE BE BE
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
B E B E B E B E B E B E B E B E B E B E B E B E B E BE B E B E
IMA: Reporting
B E BE
7. The monetary unit assumption requires that only transaction data capable of being expressed i
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n terms of money be included in the accounting records. This assumption enables accounting
BE BE BE BE BE BE BE BE BE BE BE BE BE BE
to quantify (measure) economic events.
BE BE BE BE
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation IMA:
BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE BE B E B
E
Reporting
obtain permission to reuse this material is available at http://www.wiley.com/go/permissi
BE BE BE BE BE BE BE BE BE
ons.
,
