SOLUTION MANUAL FOR
ACCOUNTING 28TH EDITION BY
CARL S. WARREN, CHRISTINE
JONICK, JENNIFER SCHNEIDER 2025
A+
, Chapter 1
Introduction To Accounting And Business
DISCUSSION QUESTIONS
1. Some Users Of Accounting Information Include Managers, Employees, Investors, Creditors,
Customers, And The Government.
2. The Role Of Accounting Is To Provide Information For Managers To Use In Operating The Business.
In Addition, Accounting Provides Information To Others To Use In Assessing The Economic
Performance And Condition Of The Business.
3. The Corporate Form Allows The Company To Obtain Large Amounts Of Resources By Issuing
Stock.For This Reason, Most Companies That Require Large Investments In Property, Plant, And
Equipment Are Organized As Corporations.
4. No. The Business Entity Concept Limits The Recording Of Economic Data To Transactions
DirectlyAffecting The Activities Of The Business. The Payment Of The Interest Of $4,500 Is A
Personal Transaction Of Josh Reilly And Should Not Be Recorded By Dispatch Delivery Service.
5. The Land Should Be Recorded At Its Cost Of $167,500 To Reliable Repair Service. This Is Consistent
With The Cost Concept.
6. A. No. The Offer Of $2,000,000 And The Increase In The Assessed Value Should Not Be Recognized
In The Accounting Records Because Land Is Recorded On The Cost Basis.
B. Cash Would Increase By $2,125,000, Land Would Decrease By $900,000, And Owner’s Equity
Would Increase By $1,225,000.
7. An Account Receivable Is A Claim Against A Customer For Goods Or Services Sold. An Account
Payable Is An Amount Owed To A Creditor For Goods Or Services Purchased. Therefore, An
AccountReceivable In The Records Of The Seller Is An Account Payable In The Records Of The
Purchaser.
8. (B) The Business Realized Net Income Of $91,000 ($679,000 + $588,000).
9. (A) The Business Incurred A Net Loss Of $75,000 ($640,000 + $715,000).
10. (A) Net Income Or Net Loss
(b) Owner’s Equity At The End Of The Period
(c) Cash At The End Of The Period
, 1-1
© 2021 Cengage Learning, Inc. May Not Be Scanned, Copied Or Duplicated, Or Posted To A Publicly Accessible Website, In Whole Or In Part.
,
ACCOUNTING 28TH EDITION BY
CARL S. WARREN, CHRISTINE
JONICK, JENNIFER SCHNEIDER 2025
A+
, Chapter 1
Introduction To Accounting And Business
DISCUSSION QUESTIONS
1. Some Users Of Accounting Information Include Managers, Employees, Investors, Creditors,
Customers, And The Government.
2. The Role Of Accounting Is To Provide Information For Managers To Use In Operating The Business.
In Addition, Accounting Provides Information To Others To Use In Assessing The Economic
Performance And Condition Of The Business.
3. The Corporate Form Allows The Company To Obtain Large Amounts Of Resources By Issuing
Stock.For This Reason, Most Companies That Require Large Investments In Property, Plant, And
Equipment Are Organized As Corporations.
4. No. The Business Entity Concept Limits The Recording Of Economic Data To Transactions
DirectlyAffecting The Activities Of The Business. The Payment Of The Interest Of $4,500 Is A
Personal Transaction Of Josh Reilly And Should Not Be Recorded By Dispatch Delivery Service.
5. The Land Should Be Recorded At Its Cost Of $167,500 To Reliable Repair Service. This Is Consistent
With The Cost Concept.
6. A. No. The Offer Of $2,000,000 And The Increase In The Assessed Value Should Not Be Recognized
In The Accounting Records Because Land Is Recorded On The Cost Basis.
B. Cash Would Increase By $2,125,000, Land Would Decrease By $900,000, And Owner’s Equity
Would Increase By $1,225,000.
7. An Account Receivable Is A Claim Against A Customer For Goods Or Services Sold. An Account
Payable Is An Amount Owed To A Creditor For Goods Or Services Purchased. Therefore, An
AccountReceivable In The Records Of The Seller Is An Account Payable In The Records Of The
Purchaser.
8. (B) The Business Realized Net Income Of $91,000 ($679,000 + $588,000).
9. (A) The Business Incurred A Net Loss Of $75,000 ($640,000 + $715,000).
10. (A) Net Income Or Net Loss
(b) Owner’s Equity At The End Of The Period
(c) Cash At The End Of The Period
, 1-1
© 2021 Cengage Learning, Inc. May Not Be Scanned, Copied Or Duplicated, Or Posted To A Publicly Accessible Website, In Whole Or In Part.
,
