FULL SOLUTION MANUAL FOR
Financial And Managerial Accounting 4th Edition by Jerry J
Weygandt, Paul D Kimmel, Jill E Mitchel
CHAPTER 1
Accounting uin uAction
ASSIGNMENT uCLASSIFICATION uTABLE
Brief A
Learning uObjectives Questions uExercises Do uIt! Exercises Problems
1. Identify uthe uactivities 1, u2, u3, u4, u5 1 1, u2
uanduusers uassociated
uwith uaccounting.
2. uExplain uthe ubuilding ublocks 6, u7, u8, u9, 2 3, u4
uof uaccounting: uethics, u10
uprinciples, uand
uassumptions.
3. State uthe uaccounting 11, u12, u13, 1, u2, u3, u4, u5 3 5
uequation, uand udefine u14.
uitsucomponents. 22
4. Analyze uthe ueffects uof 15, u16, u18 6, u7, u8, u9 4 6, u7, u8 1A, u2A, u4A,
ubusiness utransactions uon 5A
utheuaccounting uequation.
5. Describe uthe ufour ufinancial 17, u19, u20, 10, u11 5 8, u9, u 10, u11, 2A, u3A, u4A,
ustatements uand uhow uthey u21, 12, u13, u14, 5A
uareuprepared. u15,
16, u17, u18
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, © u2021 uJohn uWiley u& uSons, uInc. uAll urights ureserved. uNo upart uof uthis upublication umay ube ureproduced, ustored uin ua
uretrieval usystem, uor utransmitted,uin uany uform uor uby uany umeans, uelectronic, umechanical, uphotocopying, urecording uor
uotherwise, uexcept uas upermitted uby ulaw. uAdvice uon uhow uto
1-2 © 2021 John Wiley & Sons, Inc. All rights reserved. Weygandt, Financial & Managerial Accounting 4e, Solutions Manual (For Instructor Use Only)
, ANSWERS uTO uQUESTIONS
1. True. uVirtually uevery uorganization uand uperson uin uour usociety uuses uaccounting uinformation.
uBusinesses, uinvestors, ucreditors, ugovernment uagencies, uand unot-for-profit uorganizations
umust uuse uaccounting uinformation uto uoperate ueffectively.
LO u 1, u BT: u K, u Difficulty: u Easy, u TOT: u 2 u min., u AACSB: u None, u AICPA u FC: u Reporting, u IMA: u Reporting
2. Accounting uis uthe uprocess uof uidentifying, urecording, uand u communicating u the ueconomic
uevents uof uan uorganization uto uinterested uusers uof uthe uinformation. uThe ufirst uactivity uof uthe
uaccounting uprocess uis uto uidentify ueconomic uevents uthat uare urelevant uto ua uparticular
ubusiness. uOnce uidentified uand umeasured, uthe uevents uare urecorded uto uprovide ua uhistory
uof uthe ufinancial uactivities uof uthe uorganization. uRecording uconsists uof ukeeping ua
uchronological udiary uof uthese umeasured uevents uin uan uorderly uand usystematic umanner. uThe
uinformation uis ucommunicated uthrough uthe upreparation uand udistribution uof uaccounting
u reports, u the u most u common u of u which uare u called ufinancial ustatements. uA uvital
uelement uin uthe ucommunication uprocess uis uthe uaccountant’s uability uand uresponsibility uto
uanalyze uand uinterpret uthe ureported uinformation.
LO u 1, u BT: u K, u Difficulty: u Easy, u TOT: u 2 u min., u AACSB: u None, u AICPA u FC: u Reporting, u IMA: u Reporting
3. (a) uInternal uusers uare uthose uwho uplan, uorganize, uand urun uthe ubusiness uand utherefore uare
uofficers uand uother udecision umakers.
(b) To uassist umanagement, uaccounting uprovides uinternal ureports. uExamples uinclude
ufinancial ucomparisons uof uoperating ualternatives, uprojections uof u income ufrom unew
usales ucampaigns, uand uforecasts uof u cash uneeds ufor uthe unext uyear.
LO u 1, u BT: u K, u Difficulty: u Easy, u TOT: u 2 u min., u AACSB: u None, u AICPA u FC: u Reporting, u IMA: u Reporting
4. (a) Investors u(owners) uuse uaccounting uinformation uto umake udecisions uto ubuy, uhold, uor usell
ustock.
(b) Creditors uuse uaccounting uinformation uto uevaluate uthe urisks uof ugranting ucredit uor ulending umoney.
LO u 1, u BT: u K, u Difficulty: u Easy, u TOT: u 2 u min., u AACSB: u None, u AICPA u FC: u Reporting, u IMA: u Reporting
5. False. uBookkeeping uusually uinvolves uonly uthe urecording uof ueconomic uevents uand utherefore
uis ujust uone upart uof uthe uentire uaccounting uprocess. uAccounting, uon uthe uother uhand,
uinvolves uthe uentire uprocess uof uidentifying, urecording, uand ucommunicating ueconomic
uevents.
LO u 1, u BT: u C, u Difficulty: u Easy, u TOT: u 2 u min., u AACSB: u None, u AICPA u FC: u Reporting, u IMA: u Reporting
6. Harper uTravel uAgency ushould ureport uthe uland uat u$85,000 uon uits uDecember u31, u 2022
u balance usheet. uThis uis utrue unot uonly uat uthe utime uthe uland uis upurchased, ubut ualso uover
uthe utime uthe uland uis uheld. uIn udetermining uwhich umeasurement uprinciple uto uuse u(historical
ucost uor ufair uvalue) ucompanies uweigh uthe ufactual unature uof ucost ufigures uversus uthe
urelevance uof ufair uvalue. uIn ugeneral, ucompanies uuse uhistorical ucost. uOnly uin usituations
uwhere uassets uare uactively utraded udo u companies uapply uthe ufair uvalue uprinciple.
LO u 2, u BT: u C, u Difficulty: u Easy, u TOT: u 2 u min., u AACSB: u None, u AICPA u FC: u Measurement, u Analysis u and
u Interpretation u IMA: uReporting
7. The umonetary uunit uassumption urequires uthat uonly utransaction udata ucapable uof ubeing
uexpressed uin uterms uof umoney ube uincluded uin uthe uaccounting urecords. uThis uassumption
uenables uaccounting uto uquantify u(measure) ueconomic uevents.
LO u2, uBT: uK, uDifficulty: uEasy, uTOT: u2 umin., uAACSB: uNone, uAICPA uFC: uMeasurement, uAnalysis uand
uInterpretation u IMA:uReporting
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