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Test Bank for Survey of Accounting, 7th Edition by Edmonds & Olds, ISBN: 9781264442973, All 16 Chapters Covered, Verified Latest Edition $16.99   Add to cart
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Test Bank for Survey of Accounting, 7th Edition by Edmonds & Olds, ISBN: 9781264442973, All 16 Chapters Covered, Verified Latest Edition
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Test Bank for Survey of Accounting, 7th Edition by Edmonds & Olds, ISBN: 9781264442973, All 16 Chapters Covered, Verified Latest Edition Test Bank for Survey of Accounting, 7th Edition by Edmonds & Olds, ISBN: 9781264442973, All 16 Chapters Covered, Verified Latest Edition Test bank and solution ma...

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  • September 25, 2024
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,ACCESS Test Bank for Survey of Accounting 7th Edition Edmonds
1 1 1 1 1 1 1 1 1




Survey17e1–1Chapter111–1Solutions1Manual

SOLUTIONS TO QUESTIONS - CHAPTER 1
1 1 1 1 1




1. Stakeholders are the parties that use accounting information.1 1 1 1 1 1 1




Stakeholders with a direct interest include owners, managers, creditors
1 1 1 1 1 1 1 1


, suppliers, and employees. These individuals are directlyaffected by w
1 1 1 1 1 1 1 1 1 1


hat happens to the business.
1 1 1 1




Stakeholders with an indirect interest include financial analysts, brok
1 1 1 1 1 1 1 1


ers, attorneys, government regulators, and news reporters. These ind
1 1 1 1 1 1 1 1


ividuals use information in the financial reports to adviseand influenc
1 1 1 1 1 1 1 1 1 1


e their clients.
1 1




Students may give many different answers under the above categorie
1 1 1 1 1 1 1 1 1


s depending on their level of experience in business.
1 1 1 1 1 1 1 1




All students are direct users of accounting information related totuition
1 1 1 1 1 1 1 1 1 1 1


and fees, financial aid, and account balances.
1 1 1 1 1 1




2. Accounting provides information that is useful in making decisionsb
1 1 1 1 1 1 1 1 1


y all participants in the market for resource goods and services, bot
1 1 1 1 1 1 1 1 1 1 1


h profit-
1


oriented and nonprofit oriented. Because accounting’srole is so imp
1 1 1 1 1 1 1 1 1


ortant, it is often called the language of business.
1 1 1 1 1 1 1 1




3. The primary mechanism used to allocate resources in the U.S. isc
1 1 1 1 1 1 1 1 1 1 1


ompetition for resources in the open market. 1 1 1 1 1 1




4. A market is a group of people or organizations that come togetherf
1 1 1 1 1 1 1 1 1 1 1 1


or the purpose of exchanging items of value.
1 1 1 1 1 1 1




5. The market for business resources involves three distinct participa
1 1 1 1 1 1 1 1


nts: consumers, conversion agents, and resource owners.See Exhib
1 1 1 1 1 1 1 1


it 1-1


1 that illustrates how market trilogy is involved in resource allocat
1 1 1 1 1 1 1 1 1 1


ion.




1-1
mynursytest.store

,ACCESS Test Bank for Survey of Accounting 7th Edition Edmonds
1 1 1 1 1 1 1 1 1




Survey17e1–1Chapter111–1Solutions1Manual

6. Financial Resource: money 1 1




Physical Resource: natural resources (i.e. land, forests, mine ore, petrol
1 1 1 1 1 1 1 1 1


eum, etc.), buildings, machinery and equipment, furniture andfixtures
1 1 1 1 1 1 1 1


Labor Resource: includes both intellectual and physical labor; i.e.emplo
1 1 1 1 1 1 1 1 1


yees

7. Investors expect a distribution of the business’s profits as a returno
1 1 1 1 1 1 1 1 1 1 1


n their financial investment (capital allocation).
1 1 1 1 1




Creditors lend financial resources to businesses and receive interestas
1 1 1 1 1 1 1 1 1


a return or profit on the loan.
1 1 1 1 1 1 1




8. Financial accounting provides information that is useful to externalr
1 1 1 1 1 1 1 1 1


esource providers. 1




Managerial accounting provides information that is useful to1 1 1 1 1 1 1 1


managers in operating an organization (i.e., internal users).
1 1 1 1 1 1 1




9. Not-for-
profit or nonprofit entities provide goods or services to consumers fo
1 1 1 1 1 1 1 1 1 1


r humanitarian or special reasons rather than to earn aprofit for owne
1 1 1 1 1 1 1 1 1 1 1 1


rs. For example, certain not-for-
1 1 1 1


profit entities allocate resources to provide for research of disease
1 1 1 1 1 1 1 1 1


s or social/environmental welfare; others allocate resources to prom
1 1 1 1 1 1 1 1


otethe arts and provide education.
1 1 1 1 1




10. The U.S. rules of accounting information measurement are called
1 1 1 1 1 1 1 1 1


generally accepted accounting principles (GAAP). 1 1 1 1




1-2
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, ACCESS Test Bank for Survey of Accounting 7th Edition Edmonds
1 1 1 1 1 1 1 1 1




Survey17e1–1Chapter111–1Solutions1Manual

11. Careers in public accounting consist of providing services to the gene
1 1 1 1 1 1 1 1 1 1


ral public from a public accounting firm. These services includeauditi
1 1 1 1 1 1 1 1 1 1


ng, tax, and consulting services. Careers in private accountingusually
1 1 1 1 1 1 1 1 1


1consist of working for a specific company (which would be aclient of
1 1 1 1 1 1 1 1 1 1 1 1 1


the public accounting firm) providing a wide variety of services to the
1 1 1 1 1 1 1 1 1 1 1


1company including recording transactions, preparingfinancial state
1 1 1 1 1 1


ments, internal auditing, and others.
1 1 1 1




12. The three elements of the accounting equation are:
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1. Assets
2. Liabilities
3. Stockholders’ Equity 1




Accounts are specific items or subclassifications of the elements.
1 1 1 1 1 1 1 1 1


Examples of accounts include cash, land, and accounts payable.
1 1 1 1 1 1 1 1




13. Assets, the economic resources of a business, are used to producee
1 1 1 1 1 1 1 1 1 1 1


arnings.

14. The assets of a business belong to that business entity and there
1 1 1 1 1 1 1 1 1 1 1 1


may be claims on the assets. Claims on the assets belong to resou
1 1 1 1 1 1 1 1 1 1 1 1


rce providers.
1




15. Creditors are individuals and/or institutions that have provided goods
1 1 1 1 1 1 1 1


or services to the business which are not yet paid for, or loaned mone
1 1 1 1 1 1 1 1 1 1 1 1 1 1


y to the business. These parties have first claim to the assets of the bu
1 1 1 1 1 1 1 1 1 1 1 1 1 1


siness, and the owners have a residual interest in theassets.
1 1 1 1 1 1 1 1 1 1




16. The term “liabilities” is used to describe creditors' claims on the
1 1 1 1 1 1 1 1 1 1


assets of a business. 1 1 1




1-3
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