Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
SOLUTION MANUAL FOR GH GH
AccountingGHprinciples,GHvolumeGH1,GH10thGHcanadianGHeditionGHjerryGHj.GHWeyg
andt,GHpaulGHd.GHKimmel,GHjillGHe.GHMitchell,GHvalerieGHwarren,GHloriGHnovak
ChapterGH1-10
CHAPTER 1 GH
ANSWERS TO QUESTIONS
GH GH
1. Yes.GHAccountingGHisGHtheGHfinancialGHinformationGHsystemGHthatGHprovidesGHus
efulGHfinancialGHinformationGHtoGHeveryGHpersonGHwhoGHownsGHandGHusesGHecon
omicGHresourcesGHorGHotherwiseGHengagesGHinGHeconomicGHactivity.
LOGH1G H BT:GHCG H Difficulty:GHSG H Time:GH5GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
2. InternalGHusersGHareGHthoseGHwhoGHplan,GHorganize,GHandGHrunGHbusinessesGHa
ndGHincludeGHmanagers,GHsupervisors,GHdirectors,GHandGHcompanyGHofficers.GH
ExternalGHusersGHworkGHforGHotherGHorganizationsGHbutGHhaveGHreasonsGHtoGHbe
GHinterestedGHinGHtheGHcompany’sGHfinancialGHpositionGHandGHperformance,GHan
dGHincludeGHcurrentGHorGHpotentialGHinvestorsGH(owners),GHandGHcreditors.
InternalGHusersGHmayGHwantGHanswersGHtoGHseveralGHtypesGHofGHquestions.GHFo
rGHexample,GHtheGHfinanceGHdepartmentGHwantsGHtoGHknowGHifGHthereGHisGHenoug
hGHcashGHtoGHpayGHtheGHbills.GHTheGHmarketingGHdepartmentGHwantsGHtoGHknowGH
whatGHpriceGHtheGHbusinessGHshouldGHuseGHinGHsellingGHitsGHproductsGHtoGHmaxi
mizeGHprofits.GHTheGHhumanGHresourcesGHdepartmentGHwantsGHtoGHknowGHhowG
HmanyGHpeopleGHtheGHbusinessGHcanGHaffordGHtoGHhire.GHTheGHproductionGHdepa
rtmentGHwantsGHtoGHknowGHwhichGHproductGHlinesGHmakeGHtheGHbusinessGHtheGH
mostGHprofit.
ExternalGHusersGHmayGHwantGHanswersGHtoGHseveralGHtypesGHofGHquestions.GHF
orGHexample,GHinvestorsGHwantGHtoGHknowGHifGHtheGHcompanyGHisGHearningGHeno
ughGHtoGHgiveGHthemGHaGHreturnGHonGHtheirGHinvestment.GHCreditorsGHwantGHtoGHk
nowGHifGHtheGHcompanyG H isGHableGHtoGHpayGHitsGHdebtsGHasGHtheyGHcomeGHdue.GH
LabourGHunionsGHwantGHtoGHknowGHwhetherGHtheGHownersGHcanGHaffordGHtoGHpay
GHincreasedGHwagesGHandGHbenefits.GHCustomersGHareGHinterestedGHinGHwhethe
rGHaGHcompanyGHwillGHcontinueGHtoGHhonourGHitsGHproductGHwarrantiesGHandGHsu
pportGHitsGHproductGHlines.GHTaxingGHauthoritiesGHwantGHtoGHknowGHwhetherGHthe
GHcompanyGHrespectsGHtheGHtaxGHlaws.GHRegulatoryGHagenciesGHwantGHtoGHkno
wGHwhetherGHtheGHcompanyGHisGHrespectingGHestablishedGHrules.
LOGH1G H BT:GHCG H Difficulty:GHMG H Time:GH15GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
SolutionsGHManu 1.1 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
,Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
3. TheGHmainGHobjectiveGHofGHfinancialGHreportingGHisGHtoGHprovideG H usefulGHinformationGHt
o
SolutionsGHManu 1.2 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
,Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
investorsGHandGHcreditorsGH(externalGHusers)GHtoGHmakeGHdecisionsGHaboutGHaGH
business.GHUsersGHmayGHbeGHpotentialGHinvestorsGHwhoGHneedGHtoGHdecideGHifGH
theyG H wishGHtoGHinvestGHinGHtheGHbusinessGHorGHtheyGHmayGHbeGHcreditorsGHdeci
dingGHifGHtheyG H wishGHtoGHlendGHmoneyGHtoGHtheGHbusiness.GHTheseGHusersGHwa
ntGHtoGHknowGHifGHtheGHbusinessGHisGHrunningGHsuccessfullyGHandGHcanGHgenerat
eGHcashGHandGHearnGHaGHprofit.
LOGH1G H BT:GHCG H Difficulty:GHSG H Time:GH5GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
4. Proprietorships,GHpartnerships,GHandGHcorporationsGHareGHtheGHthreeGHmainGHfo
rmsGHofGHbusinessGHorganizations.GHTheGHmainGHdifferenceGHamongGHtheseGHthr
eeGHformsGHisGHtheGHsizeGHofGHtheGHbusiness.GHSinceGHaGHproprietorshipGHisGHaGHb
usinessGHownedGHbyG H oneGHperson,GHitGHhasGHlimitedGHresources.GHTheGHsizeGH
ofGHtheGHbusinessGHisGHtypicallyGHsmallGHandGHtheGHlifeGHofGHtheGHbusinessGHisGHli
mitedGHtoGHtheGHlifeGHofGHtheGHowner.GHTheGHsizeGHofGHbusinessesGHcanGHexpandG
HinGHtheGHcaseGHofGHaGHpartnershipGHasGHmoreGHownersGHareGHinvolvedGHinGHtheGH
day-to-
dayGHoperationsGHofGHtheGHbusiness.GHInGHorderGHtoGHachieveGHaGHlargeGHsize,GHw
ithGHaGHdiverseGHgroupGHofGHowners,GHtheGHcorporateGHformGHisGHusedGHtoGHhaveG
HeasyGHtransferabilityGHofGHtheGHownershipGHthroughGHtheGHissuanceGHofGHshare
s.GHAnotherGHimportantGHdifferenceGHisGHthatGHtheGHcorporationGHisGHaGHseparate
GHlegalGHentityGHandGHpaysGHincomeGHtaxes.GHInGHaddition,GHtheGHcorporationGHisG
HtheGHonlyGHformGHwhereGHownersGHhaveGHlimitedGHliabilityGHwithGHrespectGHtoGHth
eGHbusiness.GHTheGHfollowingGHareGHtheGHmainGHcharacteristicsGHofGHeachGHform
:
a. AGHproprietorshipGHisGHaGHprivateGHbusinessGHwithGHoneGHownerGHwhoGHha
sGHunlimitedGHliabilityGHforGHtheGHbusiness.GHTheGHproprietorshipGHhasGHaGHli
mitedGHlifeGHtiedGHtoGHtheGHlifeGHofGHtheGHowner.GHThereGHisGHtransparencyGH
betweenGHtheGHownerGHandGHtheGHbusiness.GHUltimately,GHtheGHownerGHisG
HpersonallyGHresponsibleGHtoGHpayGHtaxGHonGHtheGHprofitGHofGHtheGHbusines
s.
b. AGHpartnershipGHhasGHessentiallyGHtheGHsameGHcharacteristicsGHasGHaGHpr
oprietorshipGHexceptGHthatGHinGHaGHpartnership,GHthereGHisGHmoreGHthanGHo
neGHowner.GHPartnershipsGHareGHoftenGHusedGHtoGHorganizeGHservice-
typeGHbusinesses,GHincludingGHprofessionalGHpractices.
c. ForGHcorporations,GHtheGHownersGHareGHoneGHorGHmoreGHshareholdersGHw
hoGHenjoyGHlimitedGHliability.GHTheGHcorporationGHpaysGHincomeGHtaxesGHa
ndGHcanGHhaveGHanGHindefiniteGHliveGHsinceGHitsGHownershipGHunits,GHinGHthe
GHformGHofGHshares,GHareGHeasilyGHtransferredGHtoGHotherGHowners.
LOGH2G H BT:GHKG H Difficulty:GHMG H Time:GH15GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
5. EthicsGHisGHaGHfundamentalGHbusinessGHconcept.GHIfGHaccountantsGHdoGHnotGHha
veGHaGHhighGHethicalGHstandard,GHtheGHinformationGHtheyGHproduceGHwillGHnotGHha
veGHanyGHcredibility.
SolutionsGHManu 1.3 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
, Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
EthicsGHareGHimportantGHtoGHstatementGHusersGHbecauseGHitGHprovidesGHthemGHc
omfortGHthatGHtheGHfinancialGHinformationGHtheyGHareGHusingGHisGHcredibleGHandGH
reliable.
SolutionsGHManu 1.4 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
Novak dition
SOLUTION MANUAL FOR GH GH
AccountingGHprinciples,GHvolumeGH1,GH10thGHcanadianGHeditionGHjerryGHj.GHWeyg
andt,GHpaulGHd.GHKimmel,GHjillGHe.GHMitchell,GHvalerieGHwarren,GHloriGHnovak
ChapterGH1-10
CHAPTER 1 GH
ANSWERS TO QUESTIONS
GH GH
1. Yes.GHAccountingGHisGHtheGHfinancialGHinformationGHsystemGHthatGHprovidesGHus
efulGHfinancialGHinformationGHtoGHeveryGHpersonGHwhoGHownsGHandGHusesGHecon
omicGHresourcesGHorGHotherwiseGHengagesGHinGHeconomicGHactivity.
LOGH1G H BT:GHCG H Difficulty:GHSG H Time:GH5GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
2. InternalGHusersGHareGHthoseGHwhoGHplan,GHorganize,GHandGHrunGHbusinessesGHa
ndGHincludeGHmanagers,GHsupervisors,GHdirectors,GHandGHcompanyGHofficers.GH
ExternalGHusersGHworkGHforGHotherGHorganizationsGHbutGHhaveGHreasonsGHtoGHbe
GHinterestedGHinGHtheGHcompany’sGHfinancialGHpositionGHandGHperformance,GHan
dGHincludeGHcurrentGHorGHpotentialGHinvestorsGH(owners),GHandGHcreditors.
InternalGHusersGHmayGHwantGHanswersGHtoGHseveralGHtypesGHofGHquestions.GHFo
rGHexample,GHtheGHfinanceGHdepartmentGHwantsGHtoGHknowGHifGHthereGHisGHenoug
hGHcashGHtoGHpayGHtheGHbills.GHTheGHmarketingGHdepartmentGHwantsGHtoGHknowGH
whatGHpriceGHtheGHbusinessGHshouldGHuseGHinGHsellingGHitsGHproductsGHtoGHmaxi
mizeGHprofits.GHTheGHhumanGHresourcesGHdepartmentGHwantsGHtoGHknowGHhowG
HmanyGHpeopleGHtheGHbusinessGHcanGHaffordGHtoGHhire.GHTheGHproductionGHdepa
rtmentGHwantsGHtoGHknowGHwhichGHproductGHlinesGHmakeGHtheGHbusinessGHtheGH
mostGHprofit.
ExternalGHusersGHmayGHwantGHanswersGHtoGHseveralGHtypesGHofGHquestions.GHF
orGHexample,GHinvestorsGHwantGHtoGHknowGHifGHtheGHcompanyGHisGHearningGHeno
ughGHtoGHgiveGHthemGHaGHreturnGHonGHtheirGHinvestment.GHCreditorsGHwantGHtoGHk
nowGHifGHtheGHcompanyG H isGHableGHtoGHpayGHitsGHdebtsGHasGHtheyGHcomeGHdue.GH
LabourGHunionsGHwantGHtoGHknowGHwhetherGHtheGHownersGHcanGHaffordGHtoGHpay
GHincreasedGHwagesGHandGHbenefits.GHCustomersGHareGHinterestedGHinGHwhethe
rGHaGHcompanyGHwillGHcontinueGHtoGHhonourGHitsGHproductGHwarrantiesGHandGHsu
pportGHitsGHproductGHlines.GHTaxingGHauthoritiesGHwantGHtoGHknowGHwhetherGHthe
GHcompanyGHrespectsGHtheGHtaxGHlaws.GHRegulatoryGHagenciesGHwantGHtoGHkno
wGHwhetherGHtheGHcompanyGHisGHrespectingGHestablishedGHrules.
LOGH1G H BT:GHCG H Difficulty:GHMG H Time:GH15GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
SolutionsGHManu 1.1 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
,Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
3. TheGHmainGHobjectiveGHofGHfinancialGHreportingGHisGHtoGHprovideG H usefulGHinformationGHt
o
SolutionsGHManu 1.2 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
,Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
investorsGHandGHcreditorsGH(externalGHusers)GHtoGHmakeGHdecisionsGHaboutGHaGH
business.GHUsersGHmayGHbeGHpotentialGHinvestorsGHwhoGHneedGHtoGHdecideGHifGH
theyG H wishGHtoGHinvestGHinGHtheGHbusinessGHorGHtheyGHmayGHbeGHcreditorsGHdeci
dingGHifGHtheyG H wishGHtoGHlendGHmoneyGHtoGHtheGHbusiness.GHTheseGHusersGHwa
ntGHtoGHknowGHifGHtheGHbusinessGHisGHrunningGHsuccessfullyGHandGHcanGHgenerat
eGHcashGHandGHearnGHaGHprofit.
LOGH1G H BT:GHCG H Difficulty:GHSG H Time:GH5GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
4. Proprietorships,GHpartnerships,GHandGHcorporationsGHareGHtheGHthreeGHmainGHfo
rmsGHofGHbusinessGHorganizations.GHTheGHmainGHdifferenceGHamongGHtheseGHthr
eeGHformsGHisGHtheGHsizeGHofGHtheGHbusiness.GHSinceGHaGHproprietorshipGHisGHaGHb
usinessGHownedGHbyG H oneGHperson,GHitGHhasGHlimitedGHresources.GHTheGHsizeGH
ofGHtheGHbusinessGHisGHtypicallyGHsmallGHandGHtheGHlifeGHofGHtheGHbusinessGHisGHli
mitedGHtoGHtheGHlifeGHofGHtheGHowner.GHTheGHsizeGHofGHbusinessesGHcanGHexpandG
HinGHtheGHcaseGHofGHaGHpartnershipGHasGHmoreGHownersGHareGHinvolvedGHinGHtheGH
day-to-
dayGHoperationsGHofGHtheGHbusiness.GHInGHorderGHtoGHachieveGHaGHlargeGHsize,GHw
ithGHaGHdiverseGHgroupGHofGHowners,GHtheGHcorporateGHformGHisGHusedGHtoGHhaveG
HeasyGHtransferabilityGHofGHtheGHownershipGHthroughGHtheGHissuanceGHofGHshare
s.GHAnotherGHimportantGHdifferenceGHisGHthatGHtheGHcorporationGHisGHaGHseparate
GHlegalGHentityGHandGHpaysGHincomeGHtaxes.GHInGHaddition,GHtheGHcorporationGHisG
HtheGHonlyGHformGHwhereGHownersGHhaveGHlimitedGHliabilityGHwithGHrespectGHtoGHth
eGHbusiness.GHTheGHfollowingGHareGHtheGHmainGHcharacteristicsGHofGHeachGHform
:
a. AGHproprietorshipGHisGHaGHprivateGHbusinessGHwithGHoneGHownerGHwhoGHha
sGHunlimitedGHliabilityGHforGHtheGHbusiness.GHTheGHproprietorshipGHhasGHaGHli
mitedGHlifeGHtiedGHtoGHtheGHlifeGHofGHtheGHowner.GHThereGHisGHtransparencyGH
betweenGHtheGHownerGHandGHtheGHbusiness.GHUltimately,GHtheGHownerGHisG
HpersonallyGHresponsibleGHtoGHpayGHtaxGHonGHtheGHprofitGHofGHtheGHbusines
s.
b. AGHpartnershipGHhasGHessentiallyGHtheGHsameGHcharacteristicsGHasGHaGHpr
oprietorshipGHexceptGHthatGHinGHaGHpartnership,GHthereGHisGHmoreGHthanGHo
neGHowner.GHPartnershipsGHareGHoftenGHusedGHtoGHorganizeGHservice-
typeGHbusinesses,GHincludingGHprofessionalGHpractices.
c. ForGHcorporations,GHtheGHownersGHareGHoneGHorGHmoreGHshareholdersGHw
hoGHenjoyGHlimitedGHliability.GHTheGHcorporationGHpaysGHincomeGHtaxesGHa
ndGHcanGHhaveGHanGHindefiniteGHliveGHsinceGHitsGHownershipGHunits,GHinGHthe
GHformGHofGHshares,GHareGHeasilyGHtransferredGHtoGHotherGHowners.
LOGH2G H BT:GHKG H Difficulty:GHMG H Time:GH15GHmin.G H AACSB:GHNoneG H CPA:GHcpa-t001G H CM:GHReporting
5. EthicsGHisGHaGHfundamentalGHbusinessGHconcept.GHIfGHaccountantsGHdoGHnotGHha
veGHaGHhighGHethicalGHstandard,GHtheGHinformationGHtheyGHproduceGHwillGHnotGHha
veGHanyGHcredibility.
SolutionsGHManu 1.3 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
, Weygandt,GHKieso,GHKimmel,GHTrenholm,GHWarren,GH AccountingGHPrinciples,GHTenthGHCanadianGHE
Novak dition
EthicsGHareGHimportantGHtoGHstatementGHusersGHbecauseGHitGHprovidesGHthemGHc
omfortGHthatGHtheGHfinancialGHinformationGHtheyGHareGHusingGHisGHcredibleGHandGH
reliable.
SolutionsGHManu 1.4 ChapterGH
al©GH2022GHJohnGHWileyGH&GHSonsGHCanada,GHLtd.GHUnauthorizedGHcopying,GHdistribution,GHorGHtransmissionGH1ofGHthis
GHpageGHisGHprohibited.
