FULL SOLUTION MANUAL FOR
Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1 DK
Accounting in Action DK DK
ASSIGNMENT CLASSIFICATION TABLE DK DK
Brief Exer DK A
Learning Objectives DK Questions cises Do It! DK Exercises Problems
1. 1, 2, 3, 4, 5
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Identify the activities anDK DK DK
dusers associated with
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accounting.
2. Explain the building blocks of a
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ccounting: ethics, principles, DK DK K
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and assumptions.
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3. 11, 12, 13, 14.
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State the accounting e
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quation, and define itsc DK DK DK K
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omponents.
4. 15, 16, 18
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Analyze the effects of busin DK DK DK DK 5A
ess transactions on theacco
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unting equation. DK
5. 17, 19, 20, 21,
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Describe the four financial st DK DK DK DK
12, 13, 14, 15, 5A
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atements and how they arep DK DK DK DK K
D 16, 17, 18
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repared.
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, © 2021 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitt
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ed,in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. Advice on how
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to
1-2 © 2021 John Wiley & Sons, Inc. All rights reserved.
DK DK DK DK DK DK DK DK DK D K Weygandt, Financial & Managerial Accounting 4e, Solutions Manual
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e Only)
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, ANSWERS TO QUESTIONS DK DK
1. True. Virtually every organization and person in our society uses accounting information. Busines
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ses, investors, creditors, government agencies, and not-for-
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profit organizations must use accounting information to operate effectively.
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LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
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2. Accounting is the process of identifying, recording, and communicating the economic events of
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an organization to interested users of the information. The first activity of the accounting process i
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s to identify economic events that are relevant to a particular business. Once identified and measu
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red, the events are recorded to provide a history of the financial activities of the organization. Rec
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ording consists of keeping a chronological diary of these measured events in anorderly and syste
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matic manner. The information is communicated through the preparation and distribution of accou
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nting reports, the most common of which are called financial statements.A vital element in
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the communication process is the accountant’s ability and responsibility to analyze and interpret t
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he reported information.
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LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
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3. (a) Internal users are those who plan, organize, and run the business and therefore are officers an
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d other decision makers. DK DK DK
(b) To assist management, accounting provides internal reports. Examples include financial com
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parisons of operating alternatives, projections of income from new sales campaigns, and for
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ecasts of cash needs for the next year. DK DK DK DK DK DK DK
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
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4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell stock.
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(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
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LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
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5. False. Bookkeeping usually involves only the recording of economic events and therefore is just o
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ne part of the entire accounting process. Accounting, on the other hand, involves the entire proces
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s of identifying, recording, and communicating economic events.
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LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting, IMA: Reporting
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6. Harper Travel Agency should report the land at $85,000 on its December 31, 2022 balance she
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et. This is true not only at the time the land is purchased, but also over the time the land is held. In
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determining which measurement principle to use (historical cost or fair value) companies weigh th
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e factual nature of cost figures versus the relevance of fair value. In general, companies use histor
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ical cost. Only in situations where assets are actively traded do companies apply the fair value pr
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inciple.
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation IM
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A: Reporting DK
7. The monetary unit assumption requires that only transaction data capable of being expressed in t
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erms of money be included in the accounting records. This assumption enables accounting to qua
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ntify (measure) economic events.
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LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation IMA:Rep
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D
orting
obtain permission to reuse this material is available at http://www.wiley.com/go/permissions
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