SOLUTION MANUAL
Financial Accounting 11th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 13 | Complete
,TABLE OF CONTENTS RC RC
Chapter 1. Accounting in Action
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Chapter 2. The Recording Process
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Chapter 3. Adjusting the Accounts
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Chapter 4. Completing the Accounting Cycle
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Chapter 5. Accounting for Merchandising Operations
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Chapter 6. Inventories
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Chapter 7. Fraud, Internal Control and Cash
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Chapter 8. Accounting for Receivables
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Chapter 9. Plant Assets, Natural Resources and Intangible Assets
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Chapter 10. Liabilities
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Chapter 11. Corporations: Organisations, Stock Transactions and Stockholders’
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Equity
Chapter 12. Statement of Cash Flows
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Chapter 13. Financial Analysis: The Big Picture
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,CHAPTER 1
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Accounting in Action RC RC
ASSIGNMENT CLASSIFICATION TABLE
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BriefRCExerc A
LearningRCObjectives Questions ises DoRCIt! Exercises Problems
1. 1,RC2,RC3,RC4,RC5 1 1,RC2
IdentifyRCtheRCactivitiesRCan
dCu
R sersRCassociatedRCwithRCac
counting.
2.RCExplainRCtheRCbuildingRCblocksRCofRCac 6,RC7,RC8,RC9,RC10 2 3,RC4
counting:RCethics,RCprinciples,CRand
RCassumptions.
3. 11,RC12,RC13,RC14. 1,RC2,RC3,RC4,RC5 3 5
StateRCtheRCaccountingRCe 22
quation,RCandRCdefineRCitsCcR
omponents.
4. 15,RC16,RC18 6,RC7,RC8,RC9 4 6,RC7,RC8 1A,RC2A,RC4A,
AnalyzeRCtheRCeffectsRCofRCbusin 5A
essRCtransactionsRConRCtheCaR ccou
ntingRCequation.
5. 17,RC19,RC20,RC21, 10,RC11 5 8,RC9,RC10,RC11, 2A,RC3A,RC4A,
DescribeRCtheRCfourRCfinancialRCst 12,RC13,RC14,RC15, 5A
atementsRCandRChowRCtheyRCareCp R
16,RC17,RC18
repared.
, ANSWERS TO QUESTIONS RC RC
1. True. Virtually every organization and person in our society uses accounting information. Businesses,
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investors, creditors, government agencies, and not-for-
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profit organizations must use accounting information to operate effectively.
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LOR C 1,R C BT:R C K,R C Difficulty:R C Easy,R C TOT:R C 2R C min.,R C AACSB:R C None,R C AICPAR C FC:R C Reporting,R C IMA:R C Reporting
2. Accounting is the process of identifying, recording, and communicating the economic events of an
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organization to interested users of the information. The first activity of the accounting process is to
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identify economic events that are relevant to a particular business. Once identified and measured,
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the events are recorded to provide a history of the financial activities of the organization. Recordin
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g consists of keeping a chronological diary of these measured events in anorderly and systematic m
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anner. The information is communicated through the preparation and distribution of accounting re
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ports, the most common of which are called financial statements.A vital element in the com
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munication process is the accountant’s ability and responsibility to analyze and interpret the reporte
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d information.
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LOR C 1,R C BT:R C K,R C Difficulty:R C Easy,R C TOT:R C 2R C min.,R C AACSB:R C None,R C AICPAR C FC:R C Reporting,R C IMA:R C Reporting
3. (a) Internal users are those who plan, organize, and run the business and therefore are officers and
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other decision makers.
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(b) To assist management, accounting provides internal reports. Examples include financial compari
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sons of operating alternatives, projections of income from new sales campaigns,and forecast
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s of cash needs for the next year.
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LOR C 1,R C BT:R C K,R C Difficulty:R C Easy,R C TOT:R C 2R C min.,R C AACSB:R C None,R C AICPAR C FC:R C Reporting,R C IMA:R C Reporting
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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LOR C 1,R C BT:R C K,R C Difficulty:R C Easy,R C TOT:R C 2R C min.,R C AACSB:R C None,R C AICPAR C FC:R C Reporting,R C IMA:R C Reporting
5. False. Bookkeeping usually involves only the recording of economic events and therefore is just one
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part of the entire accounting process. Accounting, on the other hand, involves the entire process of
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identifying, recording, and communicating economic events.
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LOR C 1,R C BT:R C C,R C Difficulty:R C Easy,R C TOT:R C 2R C min.,R C AACSB:R C None,R C AICPAR C FC:R C Reporting,R C IMA:R C Reporting
6. Harper Travel Agency should report the land at $85,000 on its December 31, 2022 balance sheet.
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CThis 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 the
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factual nature of cost figures versus the relevance of fair value. In general, companies use historical
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Ccost. Only in situations where assets are actively traded do companies apply the fair value principl
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e.
LOR C 2,R C BT:R C C,R C Difficulty:R C Easy,R C TOT:R C 2R C min.,R C AACSB:R C None,R C AICPAR C FC:R C Measurement,R C AnalysisR C andR C InterpretationR C
IMA:RCReporting
7. The monetary unit assumption requires that only transaction data capable of being expressed in ter
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ms of money be included in the accounting records. This assumption enables accounting to quantify
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(measure) economic events.
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LORC2,RCBT:RCK,RCDifficulty:RCEasy,RCTOT:RC2RCmin.,RCAACSB:RCNone,RCAICPARCFC:RCMeasurement,RCAnalysisRCandRCInterpretationR C IMA:CR
R eporting
