Solution Manual and Instructor Resource for
Intermediate Accounting, 18th Edition
By Kieso, Weygandt and Warfield.
All chapters covered
Copyrightq©q2022qWILEY Kieso,qIntermediateqAccounting,q18/e,qSolutionsqManual 5-1-1
, Chapter 1 q
Financial Accounting and Accounting Standards
q q q q
Assignment Classification Table (By Topic)
q q q q
Topics Questions Briefq E Exercises Criticalq
xercises Thinking
1. Environmentq ofq accou 1,2,q3,4 1 1 1
nting,qprinciples,q objec
tives,q standards,q acco
unting theory.
2. Authoritativeq pronoun 5,6,q7,8 2 2 2
cementsqandq rule-
makingqbodies.
3. Conceptualq framework- 9,q 10 3 3,4
q general,qobjectiveqofq fin
ancialqreporting.
4. Qualitativeqcharacteristicsqof 11,12,q13,q14, 3,4,q5,q6,q7 4,5,6 5,q 10
accounting. 15,q16,17
5. Elementsqof 18,q19 8,q9 7
q financialq st
atements.
6. Basicqassumptionsqand 20,q21,q 22,q23, 10,q11,q12, 4,q 8,q9,q 10, 6,q 7,q8,q 9,q 11
principles. 24,q25,q 26,q 27, 13,q14 11,q12
28,q 29,q 30,31
7. Costq constraint. 32,33,34
8. Roleqofqpressureqgroups. 35,q36 12,q14,q 15,q 16,
17
9. Ethicalqissues. 37,q38,39,40 13
, Assignment Classification Table (By Learning Objective)
q q q q q
LearningqObjectives Questions Briefq Exer Exercises Criticalq T
cises hinking
1. Describeqtheqfinancialqreporting 1,q2,q3,q4, 1,q2 1,q2 1
environment,qmajorq standard- 5,q6,q7,q8
q settingqbodies,qandqtheqmeaning
q ofqgenerallyqacceptedqaccountin
gq principlesq(GAAP).
2. Describeqtheqcomponents q and 9,q 10,q 11,q12, 3,q5,q6, 3,q4,q 5,q6,q7 2,3,4,q5,
usefulnessq ofq theq conceptual 13,q 14,q15,q 16, 7,q 8,9 10
framework. 17,q18,q19
3. Discussqtheqbasicqassumptions 20,q 21,q 22,q23, 4,q 10,q 11, 8,q9,q 10,q11, 6,q 7,q 8,q 9,
andq principlesq ofq accounting. 24,q 25,q26,q 27, 12,q13,q14 12 11,q12
28,q 29,q31,
32,q33,q34
4. Identifyqtheqmajorqchallengesq in 30,q35,q 36,q 37, 2 11,q13,q14,
theqfinancialqqreporting 38,q39,40 15,q16
q environment.
Assignment Characteristics Table (Time on Task)
q q q q q
Item Description Levelq ofq Timeq (
Difficulty minutes)
E1.1 Needqforq GAAP. Simple 15-20
E1.2 Financialq reportingq andq accountingq standards. Simple 15-20
E1.3 Usefulness,q objectiveq ofqfinancialq reporting. Simple 15-20
E1.4 Usefulness,q objectiveq ofqfinancialq reporting, Simple 15-20
q qualitativeqcharacteristics.
E1.5 Qualitativeq characteristics. Moderate 20-30
E1.6 Qualitativeq characteristics. Simple 15-20
E1.7 Elementsq ofqfinancialq statements. Simple 15-20
E1.8 Assumptions,qprinciples,q andq constraint. Simple 15-20
E1.9 Assumptions,qprinciples,q andq constraint. Moderate 20-25
E1.10 Fullqdisclosureq principle. Complex 20-25
E1.11 Accountingqprinciplesq andq assumptions- Moderate 20-25
E1.12 Accountingqprinciples-comprehensive. Moderate 20-25
CT1.1 Securitiesq andq Exchangeq Commission. Moderate 30-40
CT1.2 Conceptualqframework-general. Simple 20-25
CT1.3 Conceptualqframework-general. Simple 25-35
CT1.4 Objectiveq ofqfinancialq reporting. Moderate 25-35
CT1.5 Qualitativeq characteristics. Moderate 30-35
Copyrightq©q2022qWILEY Kieso,qIntermediateqAccounting,q18/e,qSolutionsqManual 5-1-3
, CT1.6 Revenueq recognitionq principle. Complex 25-30
CT1.7 Expenseq recognitionq principle. Complex 20-25
CT1.8 Expenseq recognitionq principle. Moderate 20-25
CT1.9 Expenseq recognitionq principle. Moderate 20-30
CT1.10 Qualitativeq characteristics. Moderate 20-30
CT1.11 Expenseq recognitionq principle. Moderate 20-25
CT1.12 Costq Constraint. Moderate 30-35
CT1.13 Rule-makingq Issues. Complex 20-25
CT1.14 Modelsqforq settingq GAAP. Simple 15-20
CT1.15 Economicq consequences. Moderate 25-35
CT1.16 GAAPq andq economicq consequences. Moderate 25-35
Answers to Questions q q
1. Ifq aq company‘sqfinancialq performanceq isq measuredqaccurately,qfairly,qandqonq aqtimelyqbasis,q theq rightq
managersqandqcompaniesq canqattractqinvestmentqcapital.q Unreliableqandqirrelevantqinformationqleadsq
toqpoorqcapitalqallocation,qwhichqadverselyqaffectsqtheqefficiencyqofqtheqsecuritiesqmarket.
LO:q1,qBloom:qK,qDifficulty:qSimple,qTime:q1-3,qAACSB:qCommunication,qAICPAqBC:qNone,qAICPAqAC:qReporting,qAICPAqPC:qCommunication
2. Theq objectiveq ofq generalq purposeq financialq reportingq isq toq provideq financialq informationq aboutq theq r
eportingq entityq thatq isq usefulq toq presentq andq potentialq equityq investors,q lenders,q andq otherq creditorsq i
nqmakingqdecisionsqaboutqprovidingqresourcesqtoqtheqentityqthroughqequityqinvestmentsqandqloansqorq
otherqformsqofqcredit.qInformationqthatqisqdecision-
usefulqtoqcapitalqprovidersq(investors)qmayqalsoqbeq usefulqtoqotherqusersqofqfinancialqreportingqwhoqare
qnotqinvestors.
LO:q1,qBloom:qK,qDifficulty:qSimple,qTime:q3-5,qAACSB:qCommunication,qAICPAqBC:qNone,qAICPAqAC:qReporting,qAICPAqPC:qDecisionqMaking
3. Investorsq areq interestedq inq financialq reportingq becauseq itq providesq informationq thatq isq usefulq forq
makingq decisionsq (referredq toq asq theq decision-
usefulnessq approach).q Whenq makingq theseq decisions,q investorsq areq interestedq inq assessingq theq
company‘sq (1)q abilityq toq generateq netq cashq inflowsq andq (2)q management‘sq abilityq toq protectq andq
enhanceq theq capitalq providers‘q investments.q Financialqreportingq shouldq thereforeqhelpq investorsq as
sessqtheq amounts,qtiming,q andquncertaintyqofq prospectiveq cashq inflowsq fromq dividendsq orq interest,q
andq theq proceedsq fromq theq sale,q redemption,q orqmaturityqofqsecuritiesqorqloans.q Forqinvestorsqtoq ma
keqtheseqassessments,qtheqeconomicq resourcesq ofq anq enterprise,q theq claimsq toq thoseq resources,
q andq theq changesq inq themq mustq beq understood.
LO:q1,qBloom:qK,qDifficulty:qSimple,qTime:q3-5,qAACSB:qCommunication,qAICPAqBC:qNone,qAICPAqAC:qReporting,qAICPAqPC:qDecisionqMaking
4. Aq commonq setq ofq financialq accountingq andq reportingq standardsq appliedq byq allq businessesq andq
entitiesqshouldqproduceqfinancialqstatementsqwhichqareqreasonablyqcomparable.qWithoutqaqcommonq
setqofq standards,qeachqenterpriseq could,q andqwould,qdevelopq aqtheoryq structureq andq setqq ofq practice
s,qresultingqinqnoncomparabilityqamongq theqfinancialqstatementsqofqenterprises.
LO:q1,qBloom:qK,qDifficulty:qSimple,qTime:q3-5,qAACSB:qCommunication,qAICPAqBC:qNone,qAICPAqAC:qReporting,qAICPAqPC:qCommunication
5. Theq SECq hasq theq powerq toq prescribe,q inq whateverq detailq itq desires,q theq accountingq practicesq andq
principlesq toq beq employedq byq companiesq thatq fallq withinq itsq jurisdiction.q Becauseq theq SECq receivesq
auditedqfinancialqstatementsqfromqnearlyqallqcompaniesqthatqissueqsecuritiesqtoqtheqpublicqorqareqlistedq
onqstockqexchanges,qitqisqgreatlyqinterestedqinqtheqcontent,qaccuracy,qandqcredibilityqofqtheqstatements.q
Forq manyq years,q theq SECq reliedq onq theq AICPAq toq regulateq theq professionq andq developq andq enforceq
accountingq principles.q Lately,q theq SECq hasq assumedq aq moreq activeq roleq inq theq developmentq of
