FULL SOLUTION MANUAL FOR
Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 po
AccountingpoinpoAction
ASSIGNMENTpoCLASSIFICATIONpoTABLE
BriefpoEx A
LearningpoObjectives Questions ercises DopoIt! Exercises Problems
1. 1,po2,po3,po4,p 1 1,po2
Identifypothepoactivitiesp o5
oandpouserspoassociated
powithpoaccounting.
2.poExplainpothepobuildingpoblock 6,po7,po8,po9,p 2 3,po4
spoofpoaccounting:poethics,po o10
principles,poandpoassumptions
.
3. 11,po12,po13,po 1,po2,po3,po4,p 3 5
Statepothepoaccountin 14. o5
gpoequation,poandpode 22
finepoitspocomponents.
4. 15,po16,po18 6,po7,po8,po9 4 6,po7,po8 1A,po 2A,po4A
Analyzepothepoeffectspoofpo ,
businesspotransactionspoonp 5A
othepoaccountingpoequation.
5. 17,po19,po20,po 10,po11 5 8,po9,po10,po1 2A,po 3A,po4A
Describepothepofourpofinanci 21, 1, ,
alpostatementspoandpohowpo 12,po13,po14,p 5A
theypoarepoprepared. o15,
16,po17,po18
obtainpopermissionpotoporeusepothispomaterialpoispoavailablepoatpohttp://www.wiley.com
/go/permissions.
, ©po2021poJohnpoWileypo&poSons,poInc.poAllporightsporeserved.poNopopartpoofpothispopublicationpomaypobeporeproduced,postoredpoi
npoaporetrievalposystem,poorpotransmitted,poinpoanypoformpoorpobypoanypomeans,poelectronic,pomechanical,pophotocopying,porecording
poorpootherwise,poexceptpoaspopermittedpobypolaw.poAdvicepoonpohowpoto
1-2 ©po2021poJohnpoWileypo&poSons,poInc.poAllporightsporeserved.p o Weygandt,poFinancialpo&poManagerialpoAccountingpo4e,poSolution
spoManualpopop o (Forpo InstructorpoUsepoOnly)
, ANSWERSpoTOpoQUESTIONS
1. True.poVirtuallypoeverypoorganizationpoandpopersonpoinpoourposocietypousespoaccountingpoinform
ation.poBusinesses,poinvestors,pocreditors,pogovernmentpoagencies,poandponot-for-
profitpoorganizationspomustpousepoaccountingpoinformationpotopooperatepoeffectively.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
2. Accountingpoispothepoprocesspoofpoidentifying,porecording,poandp o communicatingp o thepoecono
micpoeventspoofpoanpoorganizationpotopointerestedpouserspoofpothepoinformation.poThepofirstpoactiv
itypoofpothepoaccountingpoprocesspoispotopoidentifypoeconomicpoeventspothatpoareporelevantpotopoa
poparticularpobusiness.poOncepoidentifiedpoandpomeasured,pothepoeventspoareporecordedpotopopro
videpoapohistorypoofpothepofinancialpoactivitiespoofpothepoorganization.poRecordingpoconsistspoofpo
keepingpoapochronologicalpodiarypoofpothesepomeasuredpoeventspoinpoanpoorderlypoandposystemati
cpomanner.poThepoinformationpoispocommunicatedpothroughpothepopreparationpoandpodistributionp
oofpoaccountingp o reports,p o thep o mostp o commonp o ofp o whichpoarep o calledpofinancialpostate
ments.poApovitalpoelementpoinpothepocommunicationpoprocesspoispothepoaccountant’spoabilitypoandp
oresponsibilitypotopoanalyzepoandpointerpretpotheporeportedpoinformation.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
3. (a)poInternalpouserspoarepothosepowhopoplan,poorganize,poandporunpothepobusinesspoandpotherefo
repoarepoofficerspoandpootherpodecisionpomakers.
(b) Topoassistpomanagement,poaccountingpoprovidespointernalporeports.poExamplespoincludepofi
nancialpocomparisonspoofpooperatingpoalternatives,poprojectionspoofp o incomepofromponewpo
salespocampaigns,poandpoforecastspoofpo cashponeedspoforpotheponextpoyear.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
4. (a)
Investorspo(owners)pousepoaccountingpoinformationpotopomakepodecisionspotopobuy,pohold,poorpo
sellpostock.
(b) Creditorspousepoaccountingpoinformationpotopoevaluatepotheporiskspoofpograntingpocreditpoorpolendingpom
oney.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
5. False.poBookkeepingpousuallypoinvolvespoonlypotheporecordingpoofpoeconomicpoeventspoandpother
eforepoispojustpoonepopartpoofpothepoentirepoaccountingpoprocess.poAccounting,poonpothepootherpo
hand,poinvolvespothepoentirepoprocesspoofpoidentifying,porecording,poandpocommunicatingpoecono
micpoevents.
LOp o 1,p o BT:p o C,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
6. HarperpoTravelpoAgencyposhouldporeportpothepolandpoatpo$85,000poonpoitspoDecemberpo31,p o 20
22p o balanceposheet.poThispoispotrueponotpoonlypoatpothepotimepothepolandpoispopurchased,pobutpo
alsopooverpothepotimepothepolandpoispoheld.poInpodeterminingpowhichpomeasurementpoprinciplepoto
pousepo(historicalpocostpoorpofairpovalue)pocompaniespoweighpothepofactualponaturepoofpocostpofigu
respoversuspotheporelevancepoofpofairpovalue.poInpogeneral,pocompaniespousepohistoricalpocost.po
Onlypoinposituationspowherepoassetspoarepoactivelypotradedpodop o companiespoapplypothepofairpov
aluepoprinciple.
LOp o 2,p o BT:p o C,p o Difficulty:p o Easy,p o TOT:p o 2p o min.,p o AACSB:p o None,p o AICPAp o FC:p o Measurement,po Analysisp o
andp o Interpretationp o IMA:poReporting
7. Thepomonetarypounitpoassumptionporequirespothatpoonlypotransactionpodatapocapablepoofpobeingp
oexpressedpoinpotermspoofpomoneypobepoincludedpoinpothepoaccountingporecords.poThispoassumpt
ionpoenablespoaccountingpotopoquantifypo(measure)poeconomicpoevents.
obtainpopermissionpotoporeusepothispomaterialpoispoavailablepoatpohttp://www.wiley.com
/go/permissions.
, LOpo2,poBT:poK,poDifficulty:poEasy,poTOT:po2pomin.,poAACSB:poNone,poAICPApoFC:poMeasurement,poAnalysispoandpo
Interpretationp o IMA:poReporting
1-4 ©po2021poJohnpoWileypo&poSons,poInc.poAllporightsporeserved.p o Weygandt,poFinancialpo&poManagerialpoAccountingpo4e,poSolution
spoManualpopop o (Forpo InstructorpoUsepoOnly)
Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 po
AccountingpoinpoAction
ASSIGNMENTpoCLASSIFICATIONpoTABLE
BriefpoEx A
LearningpoObjectives Questions ercises DopoIt! Exercises Problems
1. 1,po2,po3,po4,p 1 1,po2
Identifypothepoactivitiesp o5
oandpouserspoassociated
powithpoaccounting.
2.poExplainpothepobuildingpoblock 6,po7,po8,po9,p 2 3,po4
spoofpoaccounting:poethics,po o10
principles,poandpoassumptions
.
3. 11,po12,po13,po 1,po2,po3,po4,p 3 5
Statepothepoaccountin 14. o5
gpoequation,poandpode 22
finepoitspocomponents.
4. 15,po16,po18 6,po7,po8,po9 4 6,po7,po8 1A,po 2A,po4A
Analyzepothepoeffectspoofpo ,
businesspotransactionspoonp 5A
othepoaccountingpoequation.
5. 17,po19,po20,po 10,po11 5 8,po9,po10,po1 2A,po 3A,po4A
Describepothepofourpofinanci 21, 1, ,
alpostatementspoandpohowpo 12,po13,po14,p 5A
theypoarepoprepared. o15,
16,po17,po18
obtainpopermissionpotoporeusepothispomaterialpoispoavailablepoatpohttp://www.wiley.com
/go/permissions.
, ©po2021poJohnpoWileypo&poSons,poInc.poAllporightsporeserved.poNopopartpoofpothispopublicationpomaypobeporeproduced,postoredpoi
npoaporetrievalposystem,poorpotransmitted,poinpoanypoformpoorpobypoanypomeans,poelectronic,pomechanical,pophotocopying,porecording
poorpootherwise,poexceptpoaspopermittedpobypolaw.poAdvicepoonpohowpoto
1-2 ©po2021poJohnpoWileypo&poSons,poInc.poAllporightsporeserved.p o Weygandt,poFinancialpo&poManagerialpoAccountingpo4e,poSolution
spoManualpopop o (Forpo InstructorpoUsepoOnly)
, ANSWERSpoTOpoQUESTIONS
1. True.poVirtuallypoeverypoorganizationpoandpopersonpoinpoourposocietypousespoaccountingpoinform
ation.poBusinesses,poinvestors,pocreditors,pogovernmentpoagencies,poandponot-for-
profitpoorganizationspomustpousepoaccountingpoinformationpotopooperatepoeffectively.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
2. Accountingpoispothepoprocesspoofpoidentifying,porecording,poandp o communicatingp o thepoecono
micpoeventspoofpoanpoorganizationpotopointerestedpouserspoofpothepoinformation.poThepofirstpoactiv
itypoofpothepoaccountingpoprocesspoispotopoidentifypoeconomicpoeventspothatpoareporelevantpotopoa
poparticularpobusiness.poOncepoidentifiedpoandpomeasured,pothepoeventspoareporecordedpotopopro
videpoapohistorypoofpothepofinancialpoactivitiespoofpothepoorganization.poRecordingpoconsistspoofpo
keepingpoapochronologicalpodiarypoofpothesepomeasuredpoeventspoinpoanpoorderlypoandposystemati
cpomanner.poThepoinformationpoispocommunicatedpothroughpothepopreparationpoandpodistributionp
oofpoaccountingp o reports,p o thep o mostp o commonp o ofp o whichpoarep o calledpofinancialpostate
ments.poApovitalpoelementpoinpothepocommunicationpoprocesspoispothepoaccountant’spoabilitypoandp
oresponsibilitypotopoanalyzepoandpointerpretpotheporeportedpoinformation.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
3. (a)poInternalpouserspoarepothosepowhopoplan,poorganize,poandporunpothepobusinesspoandpotherefo
repoarepoofficerspoandpootherpodecisionpomakers.
(b) Topoassistpomanagement,poaccountingpoprovidespointernalporeports.poExamplespoincludepofi
nancialpocomparisonspoofpooperatingpoalternatives,poprojectionspoofp o incomepofromponewpo
salespocampaigns,poandpoforecastspoofpo cashponeedspoforpotheponextpoyear.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
4. (a)
Investorspo(owners)pousepoaccountingpoinformationpotopomakepodecisionspotopobuy,pohold,poorpo
sellpostock.
(b) Creditorspousepoaccountingpoinformationpotopoevaluatepotheporiskspoofpograntingpocreditpoorpolendingpom
oney.
LOp o 1,p o BT:p o K,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
5. False.poBookkeepingpousuallypoinvolvespoonlypotheporecordingpoofpoeconomicpoeventspoandpother
eforepoispojustpoonepopartpoofpothepoentirepoaccountingpoprocess.poAccounting,poonpothepootherpo
hand,poinvolvespothepoentirepoprocesspoofpoidentifying,porecording,poandpocommunicatingpoecono
micpoevents.
LOp o 1,p o BT:p o C,p o Difficulty:p o Easy,p o TOT:p o 2po min.,p o AACSB:p o None,p o AICPAp o FC:p o Reporting,p o IMA:p o Reporting
6. HarperpoTravelpoAgencyposhouldporeportpothepolandpoatpo$85,000poonpoitspoDecemberpo31,p o 20
22p o balanceposheet.poThispoispotrueponotpoonlypoatpothepotimepothepolandpoispopurchased,pobutpo
alsopooverpothepotimepothepolandpoispoheld.poInpodeterminingpowhichpomeasurementpoprinciplepoto
pousepo(historicalpocostpoorpofairpovalue)pocompaniespoweighpothepofactualponaturepoofpocostpofigu
respoversuspotheporelevancepoofpofairpovalue.poInpogeneral,pocompaniespousepohistoricalpocost.po
Onlypoinposituationspowherepoassetspoarepoactivelypotradedpodop o companiespoapplypothepofairpov
aluepoprinciple.
LOp o 2,p o BT:p o C,p o Difficulty:p o Easy,p o TOT:p o 2p o min.,p o AACSB:p o None,p o AICPAp o FC:p o Measurement,po Analysisp o
andp o Interpretationp o IMA:poReporting
7. Thepomonetarypounitpoassumptionporequirespothatpoonlypotransactionpodatapocapablepoofpobeingp
oexpressedpoinpotermspoofpomoneypobepoincludedpoinpothepoaccountingporecords.poThispoassumpt
ionpoenablespoaccountingpotopoquantifypo(measure)poeconomicpoevents.
obtainpopermissionpotoporeusepothispomaterialpoispoavailablepoatpohttp://www.wiley.com
/go/permissions.
, LOpo2,poBT:poK,poDifficulty:poEasy,poTOT:po2pomin.,poAACSB:poNone,poAICPApoFC:poMeasurement,poAnalysispoandpo
Interpretationp o IMA:poReporting
1-4 ©po2021poJohnpoWileypo&poSons,poInc.poAllporightsporeserved.p o Weygandt,poFinancialpo&poManagerialpoAccountingpo4e,poSolution
spoManualpopop o (Forpo InstructorpoUsepoOnly)
