FULL SOLUTION MANUAL FOR
6 6 6
Financial And Managerial Accounting 4th Edition by Jerry J
6 6 6 6 6 6 6 6 6
Weygandt, Paul D Kimmel, Jill E Mitchel
6 6 6 6 6 6
CHAPTER 1 6
Accounting in Action 6 6
ASSIGNMENT6CLASSIFICATION6TABLE
Brief6Exe A
Learning6Objectives Questions rcises Do6It! Exercises Problems
1. 1,62,63,64,65 1 1,62
Identify6the6activities6an
d6users6associated6with6
accounting.
2.6Explain6the6building6blocks6of6 6,67,68,69,610 2 3,64
accounting:6ethics,6principles
,6and6assumptions.
3. 11,612,613,614. 1,62,63,64,65 3 5
State6the6accounting6e 22
quation,6and6define6its6
components.
4. 15,616,618 6,67,68,69 4 6,67,68 1A,62A,64A,
Analyze6the6effects6of6busin 5A
ess6transactions6on6the6acco
unting6equation.
5. 17,619,620,621, 10,611 5 8,69,610,611, 2A,63A,64A,
Describe6the6four6financial6s 12,613,614,615, 5A
tatements6and6how6they6are6 16,617,618
prepared.
obtain6permission6to6reuse6this6material6is6available6at6http://www.wiley.com/go/permissio
ns.
, ©620216John6Wiley6&6Sons,6Inc.6All6rights6reserved.6No6part6of6this6publication6may6be6reproduced,6stored6in6a6retrieval6system,6or6trans
mitted,6in6any6form6or6by6any6means,6electronic,6mechanical,6photocopying,6recording6or6otherwise,6except6 as6 permitted6by6law.6Advice6 o
n6how6to
1-2 ©620216John6Wiley6&6Sons,6Inc.6All6 rights6reserved.6 Weygandt,6Financial6&6Managerial6Accounting64e,6Solutions6Manual666 (For6 Instructor6
Use6Only)
, ANSWERS TO QUESTIONS 6 6
1. True.6Virtually6every6organization6and6person6in6our6society6uses6accounting6information.6Busine
sses,6investors,6creditors,6government6agencies,6and6not-for-
profit6organizations6must6use6accounting6information6to6operate6effectively.
LO6 1,6 BT:6 K,6 Difficulty:6 Easy,6 TOT:6 26 min.,6 AACSB:6 None,6 AICPA6 FC:6 Reporting,6 IMA:6 Reporting
2. Accounting6is6the6process6of6identifying,6recording,6and6 communicating6 the6economic6events6of6
an6organization6to6interested6users6of6the6information.6The6first6activity6of6the6accounting6process
6is6to6identify6economic6events6that6are6relevant6to6a6particular6business.6Once6identified6and6me
asured,6the6events6are6recorded6to6provide6a6history6of6the6financial6activities6of6the6organization.
6Recording6consists6of6keeping6a6chronological6diary6of6these6measured6events6in6an6orderly6and6
systematic6manner.6The6information6is6communicated6through6the6preparation6and6distribution6of
6accounting6 reports,6 the6 most6 common6 of6 which6are6 called6financial6statements.6A6vital6eleme
nt6in6the6communication6process6is6the6accountant’s6ability6and6responsibility6to6analyze6and6inte
rpret6the6reported6information.
LO6 1,6 BT:6 K,6 Difficulty:6 Easy,6 TOT:6 26 min.,6 AACSB:6 None,6 AICPA6 FC:6 Reporting,6 IMA:6 Reporting
3. (a)6Internal6users6are6those6who6plan,6organize,6and6run6the6business6and6therefore6are6officers6
and6other6decision6makers.
(b) To6assist6management,6accounting6provides6internal6reports.6Examples6include6financial6co
mparisons6of6operating6alternatives,6projections6of6 income6from6new6sales6campaigns,6and6
forecasts6of6 cash6needs6for6the6next6year.
LO6 1,6 BT:6 K,6 Difficulty:6 Easy,6 TOT:6 26 min.,6 AACSB:6 None,6 AICPA6 FC:6 Reporting,6 IMA:6 Reporting
4. (a) Investors6(owners)6use6accounting6information6to6make6decisions6to6buy,6hold,6or6sell6stock.
(b) Creditors6use6accounting6information6to6evaluate6the6risks6of6granting6credit6or6lending6money.
LO6 1,6 BT:6 K,6 Difficulty:6 Easy,6 TOT:6 26 min.,6 AACSB:6 None,6 AICPA6 FC:6 Reporting,6 IMA:6 Reporting
5. False.6Bookkeeping6usually6involves6only6the6recording6of6economic6events6and6therefore6is6just6
one6part6of6the6entire6accounting6process.6Accounting,6on6the6other6hand,6involves6the6entire6pro
cess6of6identifying,6recording,6and6communicating6economic6events.
LO6 1,6 BT:6 C,6 Difficulty:6 Easy,6 TOT:6 26 min.,6 AACSB:6 None,6 AICPA6 FC:6 Reporting,6 IMA:6 Reporting
6. Harper6Travel6Agency6should6report6the6land6at6$85,0006on6its6December631,6 20226 balance6she
et.6This6is6true6not6only6at6the6time6the6land6is6purchased,6but6also6over6the6time6the6land6is6held.6
In6determining6which6measurement6principle6to6use6(historical6cost6or6fair6value)6companies6weig
h6the6factual6nature6of6cost6figures6versus6the6relevance6of6fair6value.6In6general,6companies6use6
historical6cost.6Only6in6situations6where6assets6are6actively6traded6do6 companies6apply6the6fair6v
alue6principle.
LO6 2,6 BT:6 C,6 Difficulty:6 Easy,6 TOT:6 26 min.,6 AACSB:6 None,6 AICPA6 FC:6 Measurement,6 Analysis6 and6 Interpretation6 IMA:6Rep
orting
7. The6monetary6unit6assumption6requires6that6only6transaction6data6capable6of6being6expressed6in
6terms6of6money6be6included6in6the6accounting6records.6This6assumption6enables6accounting6to6
quantify6(measure)6economic6events.
LO62,6BT:6K,6Difficulty:6Easy,6TOT:626min.,6AACSB:6None,6AICPA6FC:6Measurement,6Analysis6and6Interpretation6 IMA:6Re
porting
obtain6permission6to6reuse6this6material6is6available6at6http://www.wiley.com/go/permissio
ns.
,
