SOLUTION MANUAL FOR INTERMEDIATE
ACCOUNTING, 18TH EDITION, BY DONALD E.
KIESO, JERRY J. WEYGANDT AND TERRY D.
WARFIELD. CHAPTER 1-23
Financial Accounting - ✔✔ANSWER✔✔-*The process
that culminates in the preparation of financial reports on
the enterprise for use by both internal and external
parties.
Objective of Financial Reporting - ✔✔ANSWER✔✔-
Provide information about the reporting entity that is
useful to present and potential to equity investors,
lenders, and others.
,Securities and Exchange Commission (SEC) -
✔✔ANSWER✔✔--Federal agency developed to help
develop and standardize financial information presented
to stockholders
-Companies that issue securities to public are required to
file with SEC
-Have powers to prescribe auditing practices and
standards to be employed by companies that fall within
its jurisdiction
-Requires registrants to adhere to GAAP
-Relies on FASB to develop accounting standards
-Mission to protect investors, maintain fair, orderly, and
efficient markets, and facilitate capital formation
-Regulations require filing of annual (10-K) & quarterly
(10-Q) reports and others
-Enforcement authority
Full Disclosure Principle - ✔✔ANSWER✔✔-Providing
information that is of sufficient importance to influence
the judgement and decisions of an informed user
,(financial statements, notes to the statements,
supplementary information).
Two Perspectives of Time - ✔✔ANSWER✔✔-1. Date
(point in time): "as of"; balance sheet
2. Time between two dates (period): "for the year
ended"; income statement, cash flow
DEAD CRLS - ✔✔ANSWER✔✔-Debits
Expenses
Assets
Dividends declared
Credits
Revenues
Liabilities
Stockholders Equity
, American Institute of CPAs (AICPA) - ✔✔ANSWER✔✔--
National professional org of CPAs
-Important to development of GAAP
-Established the Committee on Accounting Procedure
(CAP) → Accounting Principles Board (APB) → FASB
Financial Accounting Standards Board (FASB) -
✔✔ANSWER✔✔--Major organization of the standard-
setting structure for financial accounting
-Wants to establish and improve standards of financial
accounting and reporting for the guidance and education
of the public
-Accounting guidance issued by FASB is considered GAAP
-Issues: Accounting standards updates & financial
accounting concepts
Generally Accepted Accounting Principles (GAAP) -
✔✔ANSWER✔✔-common set of accounting standards
and procedures for which either an authoritative
accounting rule making body has established a principle
of reporting in a given area, or over time, a given practice
ACCOUNTING, 18TH EDITION, BY DONALD E.
KIESO, JERRY J. WEYGANDT AND TERRY D.
WARFIELD. CHAPTER 1-23
Financial Accounting - ✔✔ANSWER✔✔-*The process
that culminates in the preparation of financial reports on
the enterprise for use by both internal and external
parties.
Objective of Financial Reporting - ✔✔ANSWER✔✔-
Provide information about the reporting entity that is
useful to present and potential to equity investors,
lenders, and others.
,Securities and Exchange Commission (SEC) -
✔✔ANSWER✔✔--Federal agency developed to help
develop and standardize financial information presented
to stockholders
-Companies that issue securities to public are required to
file with SEC
-Have powers to prescribe auditing practices and
standards to be employed by companies that fall within
its jurisdiction
-Requires registrants to adhere to GAAP
-Relies on FASB to develop accounting standards
-Mission to protect investors, maintain fair, orderly, and
efficient markets, and facilitate capital formation
-Regulations require filing of annual (10-K) & quarterly
(10-Q) reports and others
-Enforcement authority
Full Disclosure Principle - ✔✔ANSWER✔✔-Providing
information that is of sufficient importance to influence
the judgement and decisions of an informed user
,(financial statements, notes to the statements,
supplementary information).
Two Perspectives of Time - ✔✔ANSWER✔✔-1. Date
(point in time): "as of"; balance sheet
2. Time between two dates (period): "for the year
ended"; income statement, cash flow
DEAD CRLS - ✔✔ANSWER✔✔-Debits
Expenses
Assets
Dividends declared
Credits
Revenues
Liabilities
Stockholders Equity
, American Institute of CPAs (AICPA) - ✔✔ANSWER✔✔--
National professional org of CPAs
-Important to development of GAAP
-Established the Committee on Accounting Procedure
(CAP) → Accounting Principles Board (APB) → FASB
Financial Accounting Standards Board (FASB) -
✔✔ANSWER✔✔--Major organization of the standard-
setting structure for financial accounting
-Wants to establish and improve standards of financial
accounting and reporting for the guidance and education
of the public
-Accounting guidance issued by FASB is considered GAAP
-Issues: Accounting standards updates & financial
accounting concepts
Generally Accepted Accounting Principles (GAAP) -
✔✔ANSWER✔✔-common set of accounting standards
and procedures for which either an authoritative
accounting rule making body has established a principle
of reporting in a given area, or over time, a given practice
