CHAPTER 1
ACCOUNTING: INFORMATION FOR DECISION MAKING
OVERVIEW OF BRIEF EXERCISES, EXERCISES , CASES & CRITICAL
THINKING
Brief Learning
Exercises Topic Objectives Skills
B. Ex. 1.1 Users of accounting information 1, 3, 5 Analysis
B. Ex. 1.2 Components of internal control 2,5 Analysis
B. Ex. 1.3 Inexact or approximate measures 3,4 Analysis, judgment
B. Ex. 1.4 Standards for the preparation of 5,6 Analysis
accounting information
B. Ex. 1.5 FASB conceptual framework 1, 3, 5, 6 Analysis
B. Ex. 1.6 PCAOB 5, 6 Analysis, research
B. Ex. 1.7 COSO 2, 5, 6 Analysis, ethics
B. Ex. 1.8 Professional certifications in accounting 7, 8 Analysis
B. Ex. 1.9 AICPA code of professional conduct 5, 7 Analysis, ethics
B. Ex. 1.10 Personal benefits of accounting skills 1 Analysis
Learning
Exercises Topic Objectives Skills
1.1 You as a user of accounting 1 Analysis, judgment
1.2 information
Real World: Boeing Company, 3, 4 Analysis, research
California Public Employees
Retirement System, China Airlines
Users of accounting information
1.3 What is financial reporting? 3 Analysis, judgment
1.4 Generally accepted accounting 6 Analysis
1.5 principles
Accounting organizations 6 Analysis,
1.6 Investment return 3 communication
Analysis
1.7 Accounting terminology 3-5, 7 Analysis
1.8 Accounting organizations 6 Analysis
1.9 Financial and management accounting 3, 4 Judgment
1.10 Management accounting information 4 Communication,
1.11 Accounting organizations 6 judgment
Analysis, judgment
1.12 Purpose of an audit 5 Analysis, judgment
1.13 Audits of financial statements 5 Analysis
1.14 Ethics and professional judgment 7 Analysis,
communication,
1.15 Careers in accounting 8 judgment
Judgment,
1.16 adidas AG general information 1, 3, 5 communication
Analysis, judgment,
research
© The McGraw-Hill Companies, Inc., 2010
Overview
,Due to the introductory nature of this chapter and the conceptual nature of its contents, no
items labeled Problems are included. In all future chapters you will find a series of Problems
that generally include computations, are more complex, and generally require more time to
complete than Exercises.
Critical Thinking Cases
1.1 Real World: Dubai World 5 Analysis, ethics,
Reliability of financial statements judgment
1.2 Objectives of financial accounting 3 Analysis,
communication, group,
1.3 Accounting systems 2 judgment
Analysis,
1.4 Codes of ethics (Ethics, fraud & 7 communication
Analysis,
corporate governance) communication,
1.5 Accounting reports lack candor 1, 3, 7 judgment
Analysis, ethics,
(Business Week) judgment
1.6 Accessing information on the Internet 6, 7 Research, technology
(Internet)
© The McGraw-Hill Companies, Inc., 2010
Overview
, DESCRIPTIONS OF CRITICAL THINKING CASES
Below are brief descriptions of each case. These descriptions are accompanied by the estimated time (in
minutes) required for completion and by a difficulty rating.
Critical Thinking Cases
1.1 Dubai World 15 Easy
Reliability of Financial Statements
This case explores the general subject of integrity in financial statements—what
causes potential investors to be able to rely on information and what precludes
management from portraying a company in more positive terms than it should.
1.2 Objectives of Financial Accounting 15 Medium
Characteristics of accounting and accounting information (e.g., useful for
decision making, language of business) are used to explain the importance of
accounting information.
1.3 Accounting Systems 15 Easy
The purpose and functions of accounting systems are covered, as well as the
definition of what an accounting system is and who is responsible for designing
and implementing accounting systems.
1.4 Codes of Ethics 30 Medium
Ethics, Fraud and Corporate Governance
Students are placed in the position of a new employee who is faced with the
challenge of becoming familiar with an appropriate code of ethics and must think
through how that code might influence his/her behavior on the job.
1.5 Accessing Information on the Internet 30 Medium
Internet
Students are introduced to learning on the Internet by accessing the Rutgers
University web page on accounting information. Once there they learn about
accounting firms, accounting textbook publishers, and professional accounting
organizations.
© The McGraw-Hill Companies, Inc., 2010
Desc. of Cases
ACCOUNTING: INFORMATION FOR DECISION MAKING
OVERVIEW OF BRIEF EXERCISES, EXERCISES , CASES & CRITICAL
THINKING
Brief Learning
Exercises Topic Objectives Skills
B. Ex. 1.1 Users of accounting information 1, 3, 5 Analysis
B. Ex. 1.2 Components of internal control 2,5 Analysis
B. Ex. 1.3 Inexact or approximate measures 3,4 Analysis, judgment
B. Ex. 1.4 Standards for the preparation of 5,6 Analysis
accounting information
B. Ex. 1.5 FASB conceptual framework 1, 3, 5, 6 Analysis
B. Ex. 1.6 PCAOB 5, 6 Analysis, research
B. Ex. 1.7 COSO 2, 5, 6 Analysis, ethics
B. Ex. 1.8 Professional certifications in accounting 7, 8 Analysis
B. Ex. 1.9 AICPA code of professional conduct 5, 7 Analysis, ethics
B. Ex. 1.10 Personal benefits of accounting skills 1 Analysis
Learning
Exercises Topic Objectives Skills
1.1 You as a user of accounting 1 Analysis, judgment
1.2 information
Real World: Boeing Company, 3, 4 Analysis, research
California Public Employees
Retirement System, China Airlines
Users of accounting information
1.3 What is financial reporting? 3 Analysis, judgment
1.4 Generally accepted accounting 6 Analysis
1.5 principles
Accounting organizations 6 Analysis,
1.6 Investment return 3 communication
Analysis
1.7 Accounting terminology 3-5, 7 Analysis
1.8 Accounting organizations 6 Analysis
1.9 Financial and management accounting 3, 4 Judgment
1.10 Management accounting information 4 Communication,
1.11 Accounting organizations 6 judgment
Analysis, judgment
1.12 Purpose of an audit 5 Analysis, judgment
1.13 Audits of financial statements 5 Analysis
1.14 Ethics and professional judgment 7 Analysis,
communication,
1.15 Careers in accounting 8 judgment
Judgment,
1.16 adidas AG general information 1, 3, 5 communication
Analysis, judgment,
research
© The McGraw-Hill Companies, Inc., 2010
Overview
,Due to the introductory nature of this chapter and the conceptual nature of its contents, no
items labeled Problems are included. In all future chapters you will find a series of Problems
that generally include computations, are more complex, and generally require more time to
complete than Exercises.
Critical Thinking Cases
1.1 Real World: Dubai World 5 Analysis, ethics,
Reliability of financial statements judgment
1.2 Objectives of financial accounting 3 Analysis,
communication, group,
1.3 Accounting systems 2 judgment
Analysis,
1.4 Codes of ethics (Ethics, fraud & 7 communication
Analysis,
corporate governance) communication,
1.5 Accounting reports lack candor 1, 3, 7 judgment
Analysis, ethics,
(Business Week) judgment
1.6 Accessing information on the Internet 6, 7 Research, technology
(Internet)
© The McGraw-Hill Companies, Inc., 2010
Overview
, DESCRIPTIONS OF CRITICAL THINKING CASES
Below are brief descriptions of each case. These descriptions are accompanied by the estimated time (in
minutes) required for completion and by a difficulty rating.
Critical Thinking Cases
1.1 Dubai World 15 Easy
Reliability of Financial Statements
This case explores the general subject of integrity in financial statements—what
causes potential investors to be able to rely on information and what precludes
management from portraying a company in more positive terms than it should.
1.2 Objectives of Financial Accounting 15 Medium
Characteristics of accounting and accounting information (e.g., useful for
decision making, language of business) are used to explain the importance of
accounting information.
1.3 Accounting Systems 15 Easy
The purpose and functions of accounting systems are covered, as well as the
definition of what an accounting system is and who is responsible for designing
and implementing accounting systems.
1.4 Codes of Ethics 30 Medium
Ethics, Fraud and Corporate Governance
Students are placed in the position of a new employee who is faced with the
challenge of becoming familiar with an appropriate code of ethics and must think
through how that code might influence his/her behavior on the job.
1.5 Accessing Information on the Internet 30 Medium
Internet
Students are introduced to learning on the Internet by accessing the Rutgers
University web page on accounting information. Once there they learn about
accounting firms, accounting textbook publishers, and professional accounting
organizations.
© The McGraw-Hill Companies, Inc., 2010
Desc. of Cases
