Fundamental Financial Accounting Concepts, 10e Thomas Edmonds,
Frances McNair, Philip Olds (Solutions Manual All Chapters, 100%
Original Verified, A+ Grade) All Chapters Solutions Manual
Supplement files download link at the end of this file.
Chapter 1
An Introduction to Accounting
General Comments for Chapter 1
The primary objective of the text is to teach students to understand how business events
affect financial statements. The first step is for students to learn the elements of financial
statements. Chapter 1 introduces the following elements: assets, liabilities, equity, com-
mon stock, retained earnings, revenue, expenses, and distributions. Next, students must
learn how the elements are interrelated, and finally, how those interrelationships are ex-
pressed in financial statements.
Chapter 1 establishes the foundation upon which the rest of the course sits. The range of
content is more extensive than that covered in most introductory books. As a result, we
have divided the chapter into two sections. To assure adequate exposure, we suggest treat-
ing each section as a separate chapter. Do not rush through this material. It is more im-
portant to establish a strong foundation than it is to cover every topic in the text. I once had
an intermediate accounting student who said. “I see what we are doing. In introductory we
built the building. In intermediate we are moving in the furniture.” I have never heard a
better analogy.
1-1
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
, Problem-Base Learning
Spoiler Alert! Have you ever been waiting to watch the season finale of a TV series only
to have a friend tell you how it ends before you have a chance to watch it? Have you ever
recorded a sports event so you could watch it later and then heard the final score before
you start your show? Knowing the end result before the show begins makes for a boring
experience. Even so, introductory accounting instructors almost always tell their students
how to solve a problem before they give the students time to think about the problem.
It doesn’t have to be this way. Instead, you can engage your students by using a teaching
strategy called problem-based learning (PBL). PBL begins with the presentation of a
problem with no mention of a solution. Learning occurs as students use reasoning and crit-
ical thinking skills to understand and/or solve the problem. Knowledge development is
often facilitated by having students work in groups.
This manual provides a PBL case for each chapter of the text. The case should be used
before any discussion or reading assignment of the underlying topic has occurred. Indeed,
prior exposure to the subject can diminish the learning experience. Another name for PBL
is discovery learning which is descriptive of the process. Students learn through discovery
rather than memorization. If you do not want your students to memorize, provide opportu-
nities for discovery. The first case along with instructions are presented in the following
section of this manual.
1-2
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
, Problem-Based Learning Case:
The Role of Accounting in Society
Instructions:
The case appears on page 1-4 of this manual. We recommend that you read the case before
you continue with the instructions.
Distribute copies of the case to the class before providing any explanation of accounting.
Ask students to read the case and individually develop questions as directed in the case.
Create a collaborative experience where students share their questions. After allowing
students time to develop their individual responses, put them into groups to compare the
questions they have developed individually. Form groups of three or four students with an
assignment of reaching consensus on three questions to ask the accountant. Allow groups
time to develop answers. Also have each group select a spokesperson.
Open a discussion regarding the purpose of accounting by having group spokesper-
sons report on the questions developed by their group. Guide the discussion to provide
a conclusion that accountants communicate and analyze financial information. Discuss the
difference in financial, managerial, and tax accounting. Discuss the purpose of financial
accounting. This is a good time to say a few words about the different types of accounting
information. Explain how outsiders (e.g., investors and creditors) need different kinds of
information than insiders (e.g., managers). For example, a person deciding whether to
invest in Kmart versus Wal-Mart is interested in knowing which company generated more
earnings or profits. In contrast, a Wal-Mart vice-president needs information about specific
stores and specific items within each store. Different branches of accounting have been
established to satisfy the informational needs of different users. Emphasize that financial
accounting focuses on the information needs of investors and creditors. Make the discus-
sion light and breezy. Students quickly get bored with this kind of general discussion.
Instructors need to be flexible and creative in handling the student input. Problem-based
learning is designed to provide an opportunity for student discovery. The exercise is de-
signed to stimulate student interest and critical thinking. Expect a variety of questions.
Also, be prepared to raise questions if the students do not ask about some of the things you
want to discuss. The instructor should be prepared to address predetermined learning ob-
jectives. The primary learning objective, however, is for students to leave class able to
describe the role accountants play in society. Specific topics include identifying the stake-
holders of accounting information; distinguishing between financial and managerial ac-
counting; distinguishing between various careers in accounting; and identifying the differ-
ent professional designations. The instructor should guide the discussion toward the ac-
complishment of these objectives.
1-3
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
, Chapter 1 Problem-Based Learning Case:
Ask Me Anything
Assume that you are considering going into business
with Linda Wilson. Assume that I am Linda’s account-
ant and that you can ask me three questions. Write
down the three questions that you would ask.
1-4
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
Frances McNair, Philip Olds (Solutions Manual All Chapters, 100%
Original Verified, A+ Grade) All Chapters Solutions Manual
Supplement files download link at the end of this file.
Chapter 1
An Introduction to Accounting
General Comments for Chapter 1
The primary objective of the text is to teach students to understand how business events
affect financial statements. The first step is for students to learn the elements of financial
statements. Chapter 1 introduces the following elements: assets, liabilities, equity, com-
mon stock, retained earnings, revenue, expenses, and distributions. Next, students must
learn how the elements are interrelated, and finally, how those interrelationships are ex-
pressed in financial statements.
Chapter 1 establishes the foundation upon which the rest of the course sits. The range of
content is more extensive than that covered in most introductory books. As a result, we
have divided the chapter into two sections. To assure adequate exposure, we suggest treat-
ing each section as a separate chapter. Do not rush through this material. It is more im-
portant to establish a strong foundation than it is to cover every topic in the text. I once had
an intermediate accounting student who said. “I see what we are doing. In introductory we
built the building. In intermediate we are moving in the furniture.” I have never heard a
better analogy.
1-1
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
, Problem-Base Learning
Spoiler Alert! Have you ever been waiting to watch the season finale of a TV series only
to have a friend tell you how it ends before you have a chance to watch it? Have you ever
recorded a sports event so you could watch it later and then heard the final score before
you start your show? Knowing the end result before the show begins makes for a boring
experience. Even so, introductory accounting instructors almost always tell their students
how to solve a problem before they give the students time to think about the problem.
It doesn’t have to be this way. Instead, you can engage your students by using a teaching
strategy called problem-based learning (PBL). PBL begins with the presentation of a
problem with no mention of a solution. Learning occurs as students use reasoning and crit-
ical thinking skills to understand and/or solve the problem. Knowledge development is
often facilitated by having students work in groups.
This manual provides a PBL case for each chapter of the text. The case should be used
before any discussion or reading assignment of the underlying topic has occurred. Indeed,
prior exposure to the subject can diminish the learning experience. Another name for PBL
is discovery learning which is descriptive of the process. Students learn through discovery
rather than memorization. If you do not want your students to memorize, provide opportu-
nities for discovery. The first case along with instructions are presented in the following
section of this manual.
1-2
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
, Problem-Based Learning Case:
The Role of Accounting in Society
Instructions:
The case appears on page 1-4 of this manual. We recommend that you read the case before
you continue with the instructions.
Distribute copies of the case to the class before providing any explanation of accounting.
Ask students to read the case and individually develop questions as directed in the case.
Create a collaborative experience where students share their questions. After allowing
students time to develop their individual responses, put them into groups to compare the
questions they have developed individually. Form groups of three or four students with an
assignment of reaching consensus on three questions to ask the accountant. Allow groups
time to develop answers. Also have each group select a spokesperson.
Open a discussion regarding the purpose of accounting by having group spokesper-
sons report on the questions developed by their group. Guide the discussion to provide
a conclusion that accountants communicate and analyze financial information. Discuss the
difference in financial, managerial, and tax accounting. Discuss the purpose of financial
accounting. This is a good time to say a few words about the different types of accounting
information. Explain how outsiders (e.g., investors and creditors) need different kinds of
information than insiders (e.g., managers). For example, a person deciding whether to
invest in Kmart versus Wal-Mart is interested in knowing which company generated more
earnings or profits. In contrast, a Wal-Mart vice-president needs information about specific
stores and specific items within each store. Different branches of accounting have been
established to satisfy the informational needs of different users. Emphasize that financial
accounting focuses on the information needs of investors and creditors. Make the discus-
sion light and breezy. Students quickly get bored with this kind of general discussion.
Instructors need to be flexible and creative in handling the student input. Problem-based
learning is designed to provide an opportunity for student discovery. The exercise is de-
signed to stimulate student interest and critical thinking. Expect a variety of questions.
Also, be prepared to raise questions if the students do not ask about some of the things you
want to discuss. The instructor should be prepared to address predetermined learning ob-
jectives. The primary learning objective, however, is for students to leave class able to
describe the role accountants play in society. Specific topics include identifying the stake-
holders of accounting information; distinguishing between financial and managerial ac-
counting; distinguishing between various careers in accounting; and identifying the differ-
ent professional designations. The instructor should guide the discussion toward the ac-
complishment of these objectives.
1-3
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
, Chapter 1 Problem-Based Learning Case:
Ask Me Anything
Assume that you are considering going into business
with Linda Wilson. Assume that I am Linda’s account-
ant and that you can ask me three questions. Write
down the three questions that you would ask.
1-4
Copyright ©2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education
