FULL SOLUTION MANUAL FOR
0 0 0
Financial And Managerial Accounting 4th Edition by Jerry J
0 0 0 0 0 0 0 0 0
Weygandt, Paul D Kimmel, Jill E Mitchel
0 0 0 0 0 0
CHAPTER 1 0
Accounting in Action 0 0
ASSIGNMENT0CLASSIFICATION0TABLE
Brief0Exe A
Learning0Objectives Questions rcises Do0It! Exercises Problems
1. 1,02,03,04,05 1 1,02
Identify0the0activities0an
d0users0associated0with0
accounting.
2.0Explain0the0building0blocks0of0 6,07,08,09,010 2 3,04
accounting:0ethics,0principles
,0and0assumptions.
3. 11,012,013,014. 1,02,03,04,05 3 5
State0the0accounting0e 22
quation,0and0define0its0
components.
4. 15,016,018 6,07,08,09 4 6,07,08 1A,02A,04A,
Analyze0the0effects0of0busin 5A
ess0transactions0on0the0acco
unting0equation.
5. 17,019,020,021, 10,011 5 8,09,010,011, 2A,03A,04A,
Describe0the0four0financial0s 12,013,014,015, 5A
tatements0and0how0they0are0 16,017,018
prepared.
obtain0permission0to0reuse0this0material0is0available0at0http://www.wiley.com/go/permissio
ns.
, ©020210John0Wiley0&0Sons,0Inc.0All0rights0reserved.0No0part0of0this0publication0may0be0reproduced,0stored0in0a0retrieval0system,0or0trans
mitted,0in0any0form0or0by0any0means,0electronic,0mechanical,0photocopying,0recording0or0otherwise,0except0 as0 permitted0by0law.0Advice0 o
n0how0to
1-2 ©020210John0Wiley0&0Sons,0Inc.0All0 rights0reserved.0 Weygandt,0Financial0&0Managerial0Accounting04e,0Solutions0Manual000 (For0 Instructor0
Use0Only)
, ANSWERS TO QUESTIONS 0 0
1. True.0Virtually0every0organization0and0person0in0our0society0uses0accounting0information.0Busine
sses,0investors,0creditors,0government0agencies,0and0not-for-
profit0organizations0must0use0accounting0information0to0operate0effectively.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
2. Accounting0is0the0process0of0identifying,0recording,0and0 communicating0 the0economic0events0of0
an0organization0to0interested0users0of0the0information.0The0first0activity0of0the0accounting0process
0is0to0identify0economic0events0that0are0relevant0to0a0particular0business.0Once0identified0and0me
asured,0the0events0are0recorded0to0provide0a0history0of0the0financial0activities0of0the0organization.
0Recording0consists0of0keeping0a0chronological0diary0of0these0measured0events0in0an0orderly0and0
systematic0manner.0The0information0is0communicated0through0the0preparation0and0distribution0of
0accounting0 reports,0 the0 most0 common0 of0 which0are0 called0financial0statements.0A0vital0eleme
nt0in0the0communication0process0is0the0accountant’s0ability0and0responsibility0to0analyze0and0inte
rpret0the0reported0information.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
3. (a)0Internal0users0are0those0who0plan,0organize,0and0run0the0business0and0therefore0are0officers0
and0other0decision0makers.
(b) To0assist0management,0accounting0provides0internal0reports.0Examples0include0financial0co
mparisons0of0operating0alternatives,0projections0of0 income0from0new0sales0campaigns,0and0
forecasts0of0 cash0needs0for0the0next0year.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
4. (a) Investors0(owners)0use0accounting0information0to0make0decisions0to0buy,0hold,0or0sell0stock.
(b) Creditors0use0accounting0information0to0evaluate0the0risks0of0granting0credit0or0lending0money.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
5. False.0Bookkeeping0usually0involves0only0the0recording0of0economic0events0and0therefore0is0just0
one0part0of0the0entire0accounting0process.0Accounting,0on0the0other0hand,0involves0the0entire0pro
cess0of0identifying,0recording,0and0communicating0economic0events.
LO0 1,0 BT:0 C,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
6. Harper0Travel0Agency0should0report0the0land0at0$85,0000on0its0December031,0 20220 balance0she
et.0This0is0true0not0only0at0the0time0the0land0is0purchased,0but0also0over0the0time0the0land0is0held.0
In0determining0which0measurement0principle0to0use0(historical0cost0or0fair0value)0companies0weig
h0the0factual0nature0of0cost0figures0versus0the0relevance0of0fair0value.0In0general,0companies0use0
historical0cost.0Only0in0situations0where0assets0are0actively0traded0do0 companies0apply0the0fair0v
alue0principle.
LO0 2,0 BT:0 C,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Measurement,0 Analysis0 and0 Interpretation0 IMA:0Rep
orting
7. The0monetary0unit0assumption0requires0that0only0transaction0data0capable0of0being0expressed0in
0terms0of0money0be0included0in0the0accounting0records.0This0assumption0enables0accounting0to0
quantify0(measure)0economic0events.
LO02,0BT:0K,0Difficulty:0Easy,0TOT:020min.,0AACSB:0None,0AICPA0FC:0Measurement,0Analysis0and0Interpretation0 IMA:0Re
porting
obtain0permission0to0reuse0this0material0is0available0at0http://www.wiley.com/go/permissio
ns.
,
0 0 0
Financial And Managerial Accounting 4th Edition by Jerry J
0 0 0 0 0 0 0 0 0
Weygandt, Paul D Kimmel, Jill E Mitchel
0 0 0 0 0 0
CHAPTER 1 0
Accounting in Action 0 0
ASSIGNMENT0CLASSIFICATION0TABLE
Brief0Exe A
Learning0Objectives Questions rcises Do0It! Exercises Problems
1. 1,02,03,04,05 1 1,02
Identify0the0activities0an
d0users0associated0with0
accounting.
2.0Explain0the0building0blocks0of0 6,07,08,09,010 2 3,04
accounting:0ethics,0principles
,0and0assumptions.
3. 11,012,013,014. 1,02,03,04,05 3 5
State0the0accounting0e 22
quation,0and0define0its0
components.
4. 15,016,018 6,07,08,09 4 6,07,08 1A,02A,04A,
Analyze0the0effects0of0busin 5A
ess0transactions0on0the0acco
unting0equation.
5. 17,019,020,021, 10,011 5 8,09,010,011, 2A,03A,04A,
Describe0the0four0financial0s 12,013,014,015, 5A
tatements0and0how0they0are0 16,017,018
prepared.
obtain0permission0to0reuse0this0material0is0available0at0http://www.wiley.com/go/permissio
ns.
, ©020210John0Wiley0&0Sons,0Inc.0All0rights0reserved.0No0part0of0this0publication0may0be0reproduced,0stored0in0a0retrieval0system,0or0trans
mitted,0in0any0form0or0by0any0means,0electronic,0mechanical,0photocopying,0recording0or0otherwise,0except0 as0 permitted0by0law.0Advice0 o
n0how0to
1-2 ©020210John0Wiley0&0Sons,0Inc.0All0 rights0reserved.0 Weygandt,0Financial0&0Managerial0Accounting04e,0Solutions0Manual000 (For0 Instructor0
Use0Only)
, ANSWERS TO QUESTIONS 0 0
1. True.0Virtually0every0organization0and0person0in0our0society0uses0accounting0information.0Busine
sses,0investors,0creditors,0government0agencies,0and0not-for-
profit0organizations0must0use0accounting0information0to0operate0effectively.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
2. Accounting0is0the0process0of0identifying,0recording,0and0 communicating0 the0economic0events0of0
an0organization0to0interested0users0of0the0information.0The0first0activity0of0the0accounting0process
0is0to0identify0economic0events0that0are0relevant0to0a0particular0business.0Once0identified0and0me
asured,0the0events0are0recorded0to0provide0a0history0of0the0financial0activities0of0the0organization.
0Recording0consists0of0keeping0a0chronological0diary0of0these0measured0events0in0an0orderly0and0
systematic0manner.0The0information0is0communicated0through0the0preparation0and0distribution0of
0accounting0 reports,0 the0 most0 common0 of0 which0are0 called0financial0statements.0A0vital0eleme
nt0in0the0communication0process0is0the0accountant’s0ability0and0responsibility0to0analyze0and0inte
rpret0the0reported0information.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
3. (a)0Internal0users0are0those0who0plan,0organize,0and0run0the0business0and0therefore0are0officers0
and0other0decision0makers.
(b) To0assist0management,0accounting0provides0internal0reports.0Examples0include0financial0co
mparisons0of0operating0alternatives,0projections0of0 income0from0new0sales0campaigns,0and0
forecasts0of0 cash0needs0for0the0next0year.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
4. (a) Investors0(owners)0use0accounting0information0to0make0decisions0to0buy,0hold,0or0sell0stock.
(b) Creditors0use0accounting0information0to0evaluate0the0risks0of0granting0credit0or0lending0money.
LO0 1,0 BT:0 K,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
5. False.0Bookkeeping0usually0involves0only0the0recording0of0economic0events0and0therefore0is0just0
one0part0of0the0entire0accounting0process.0Accounting,0on0the0other0hand,0involves0the0entire0pro
cess0of0identifying,0recording,0and0communicating0economic0events.
LO0 1,0 BT:0 C,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Reporting,0 IMA:0 Reporting
6. Harper0Travel0Agency0should0report0the0land0at0$85,0000on0its0December031,0 20220 balance0she
et.0This0is0true0not0only0at0the0time0the0land0is0purchased,0but0also0over0the0time0the0land0is0held.0
In0determining0which0measurement0principle0to0use0(historical0cost0or0fair0value)0companies0weig
h0the0factual0nature0of0cost0figures0versus0the0relevance0of0fair0value.0In0general,0companies0use0
historical0cost.0Only0in0situations0where0assets0are0actively0traded0do0 companies0apply0the0fair0v
alue0principle.
LO0 2,0 BT:0 C,0 Difficulty:0 Easy,0 TOT:0 20 min.,0 AACSB:0 None,0 AICPA0 FC:0 Measurement,0 Analysis0 and0 Interpretation0 IMA:0Rep
orting
7. The0monetary0unit0assumption0requires0that0only0transaction0data0capable0of0being0expressed0in
0terms0of0money0be0included0in0the0accounting0records.0This0assumption0enables0accounting0to0
quantify0(measure)0economic0events.
LO02,0BT:0K,0Difficulty:0Easy,0TOT:020min.,0AACSB:0None,0AICPA0FC:0Measurement,0Analysis0and0Interpretation0 IMA:0Re
porting
obtain0permission0to0reuse0this0material0is0available0at0http://www.wiley.com/go/permissio
ns.
,
