Fullbfilebatbhttps://testbanku.eu/
bbb
Solution Manual for Finan b b b
cial Accounting Fundam
b b
entals 6th Edition By Wil b b b b
Complete downloadable file at: b b b
https://testbanku.eu/Solution-Manual-
for-Financial-Accounting-Fundamentals-
6th-Edition-By-Wil b
QUESTIONS
1.
Thebpurposebofbaccountingbisbtobprovidebdecisionbmakersbwithbrelevantbandbreliabl
ebinformationbtobhelpbthembmakebbetterbdecisions.bExamplesbincludebinformationbforb
peoplebmakingbinvestments,bloans,bandbbusinessbplans.b
2.
Technologybreducesbthebtime,beffort,bandbcostbofbrecordkeeping.bTherebisbstillbabde
mandbforbpeoplebwhobcanbdesignbaccountingbsystems,bsupervisebtheirboperation,bana
lyzebcomplexbtransactions,bandbinterpretbreports.bDemandbalsobexistsbforbpeoplebwho
bcanbeffectivelybusebcomputersbtobpreparebandbanalyzebaccountingbreports.bTechnolo
gybwillbneverbsubstitutebforbqualifiedbpeoplebwithbabilitiesbtobprepare,buse,banalyze,ban
dbinterpretbaccountingbinformation.
3.
Externalbusersbandbtheirbusesbofbaccountingbinformationbinclude:b(a)blenders,btobme
asurebthebriskbandbreturnbofbloans;b(b)bshareholders,btobassessbwhetherbtobbuy,bsell,bo
rbholdbtheirbshares;b(c)bdirectors,btoboverseebtheirbinterestsbinbtheborganization;b(d)bem
ployeesbandblaborbunions,btobjudgebthebfairnessbofbwagesbandbassessbfuturebemploy
mentbopportunities;bandb(e)bregulators,btobdeterminebwhetherbtheborganizationbisbcom
plyingbwithbregulations.bOtherbusersbarebvoters,blegislators,bgovernmentofficials,bcon
tributorsbtobnonprofits,bsuppliers,bandbcustomers.
4.
Businessbownersbandbmanagersbusebaccountingbinformationbtobhelpbanswerbquesti
onsbsuchbas:bWhatbresourcesbdoesbanborganizationbown?bWhatbdebtsbarebowed?bHow
bmuchbincomebisbearned?b Arebexpensesbreasonablebforbtheblevelbofbsales?b Arebcusto
mers’baccountsbbeingbpromptlybcollected?
5.
Servicebbusinessesbinclude:bbStandardbandbPoor’s,bDunb&bBradstreet,bMerrillbLync
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
SolutionsbManual,bChapterb1 1
, h,bSouthwestbAirlines,bCitiCorp,bHumana,bCharlesbSchwab,bandbPrudential.bbBusiness
esbofferingbproductsbincludebNike,bReebok,bGap,bApple,bFordbMotorbCo.,bPhilipbMorris
,bCoca-Cola,bBestbBuy,bandbWalMart.b
6.
Thebinternalbrolebofbaccountingbisbtobservebtheborganization’sbinternalboperatingbfun
ctions.bItbdoesbthisbbybprovidingbusefulbinformationbforbinternalbusersbinbcompletingbt
heirbtasksbmorebeffectivelybandbefficiently.bBybprovidingbthisbinformation,baccountingb
helpsbtheborganizationbreachbitsboverallbgoals.
7.
Accountingbprofessionalsbofferbmanybservicesbincludingbauditing,bmanagementbad
vice,btaxbplanning,bbusinessbvaluation,bandbmoneybmanagement.
8.
Marketingbmanagersbareblikelybinterestedbinbinformationbsuchbasbsalesbvolume,badv
ertisingbcosts,bpromotionbcosts,bsalariesbofbsalesbpersonnel,bandbsalesbcommissions.
b
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
2 Financialb&bManagerialbAccounting,b7thbEdition
,bbb Fullbfilebatbhttps://testbanku.eu/
b 9.
Accountingbisbdescribedbasbabservicebactivitybbecausebitbservesbdecisionbmakersbb
ybprovidingbinformationbtobhelpbthembmakebbetterbbusinessbdecisions.
10. Somebaccounting-
relatedbprofessionsbincludebconsultant,bfinancialbanalyst,bunderwriter,bfinancialbplann
er,bappraiser,bFBIbinvestigator,bmarketbresearcher,bandbsystembdesigner.
11.
Ethicsbrulesbrequirebthatbauditorsbavoidbauditingbclientsbinbwhichbtheybhavebabdirect
binvestment,borbifbthebauditor’sbfeebisbdependentbonbthebfiguresbinbthebclient’sbreports.b
bThisbwillbhelpbpreventbothersbfrombdoubtingbthebqualitybofbthebauditor’sbreport.
12.
Inbadditionbtobpreparingbtaxbreturns,btaxbaccountantsbhelpbcompaniesbandbindividu
alsbplanbfuturebtransactionsbtobminimizebthebamountbofbtaxbtobbebpaid.bbTheybarebalsob
activelybinvolvedbinbestatebplanningbandbinbhelpingbsetbupborganizations.bSomebtaxbac
countantsbworkbforbregulatorybagenciesbsuchbasbthebIRSborbthebvariousbstatebdepartm
entsbofbrevenue.bbThesebtaxbaccountantsbhelpbtobenforcebtaxblaws.
13.
Thebobjectivitybconceptbmeansbthatbfinancialbstatementbinformationbisbsupportedbb
ybindependent,bunbiasedbevidencebotherbthanbsomeone’sbopinionborbimagination.bbThi
sbconceptbincreasesbthebreliabilitybandbverifiabilitybofbfinancialbstatementbinformation.
14. Thisbtreatmentbisbjustifiedbbybbothbthebcostbprinciplebandbthebgoing-
concernbassumption.
15.
Thebrevenuebrecognitionbprinciplebprovidesbguidancebforbmanagersbandbauditorsbsobt
heybknowbwhenbtobrecognizebrevenue.bbIfbrevenuebisbrecognizedbtoobearly,bthebbusines
sblooksbmorebprofitablebthanbitbis.bbOnbthebotherbhand,bifbrevenuebisbrecognizedbtooblat
ebthebbusinessblooksblessbprofitablebthanbitbis.bbThisbprinciplebdemandsbthatbrevenuebb
ebrecognizedbwhenbitbisbbothbearnedb(whenbserviceborbproductbprovided)bandbcanbbeb
measuredbreliably.bbThebamountbofbrevenuebshouldbequalbthebvaluebofbthebassetsbrecei
vedborbexpectedbtobbebreceivedbfrombthebbusiness’sboperatingbactivitiesbcoveringbabsp
ecificbtimebperiod.
16.
Businessborganizationsbcanbbeborganizedbinbonebofbthreebbasicbforms:bsolebproprie
torship,bpartnership,borbcorporation.bThesebformsbhavebimplicationsbforblegalbliability,
btaxation,bcontinuity,bnumberbofbowners,bandblegalbstatusbasbfollows:
Proprietorship bbbbPartnership bbbbCorporation
Businessbentity yes yes yes
Legalbentity no no yes
Limitedbliability no* no* yes
Unlimitedblife no no yes
Businessbtaxed no no yes
Onebownerballowed yes no yes
*ProprietorshipsbandbpartnershipsbthatbarebsetbupbasbLLCsbprovideblimitedbliability.
17.
(a)bAssetsbarebresourcesbownedborbcontrolledbbybabcompanybthatbarebexpectedbtobyi
eldbfuturebbenefits.b(b)bLiabilitiesbarebcreditors’bclaimsbonbassetsbthatbreflectbobligatio
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
SolutionsbManual,bChapterb1 3
, nsbtobprovidebassets,bproducts,borbservicesbtobothers.b(c)bEquitybisbthebowner’sbclaimb
onbassetsbandbisbequalbtobassetsbminusbliabilities.b(d)bNetbassetsbreferbtobequity.
18.
Equitybisbincreasedbbybinvestmentsbfrombownersb(stockbissuances)bandbbybnetbinco
meb(whichbisbthebexcessbofbrevenuesboverbexpenses).bbItbisbdecreasedbbybdividendsba
ndbbybabnetblossb(whichbisbthebexcessbofbexpensesboverbrevenues).
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
4 Financialb&bManagerialbAccounting,b7thbEdition
bbb
Solution Manual for Finan b b b
cial Accounting Fundam
b b
entals 6th Edition By Wil b b b b
Complete downloadable file at: b b b
https://testbanku.eu/Solution-Manual-
for-Financial-Accounting-Fundamentals-
6th-Edition-By-Wil b
QUESTIONS
1.
Thebpurposebofbaccountingbisbtobprovidebdecisionbmakersbwithbrelevantbandbreliabl
ebinformationbtobhelpbthembmakebbetterbdecisions.bExamplesbincludebinformationbforb
peoplebmakingbinvestments,bloans,bandbbusinessbplans.b
2.
Technologybreducesbthebtime,beffort,bandbcostbofbrecordkeeping.bTherebisbstillbabde
mandbforbpeoplebwhobcanbdesignbaccountingbsystems,bsupervisebtheirboperation,bana
lyzebcomplexbtransactions,bandbinterpretbreports.bDemandbalsobexistsbforbpeoplebwho
bcanbeffectivelybusebcomputersbtobpreparebandbanalyzebaccountingbreports.bTechnolo
gybwillbneverbsubstitutebforbqualifiedbpeoplebwithbabilitiesbtobprepare,buse,banalyze,ban
dbinterpretbaccountingbinformation.
3.
Externalbusersbandbtheirbusesbofbaccountingbinformationbinclude:b(a)blenders,btobme
asurebthebriskbandbreturnbofbloans;b(b)bshareholders,btobassessbwhetherbtobbuy,bsell,bo
rbholdbtheirbshares;b(c)bdirectors,btoboverseebtheirbinterestsbinbtheborganization;b(d)bem
ployeesbandblaborbunions,btobjudgebthebfairnessbofbwagesbandbassessbfuturebemploy
mentbopportunities;bandb(e)bregulators,btobdeterminebwhetherbtheborganizationbisbcom
plyingbwithbregulations.bOtherbusersbarebvoters,blegislators,bgovernmentofficials,bcon
tributorsbtobnonprofits,bsuppliers,bandbcustomers.
4.
Businessbownersbandbmanagersbusebaccountingbinformationbtobhelpbanswerbquesti
onsbsuchbas:bWhatbresourcesbdoesbanborganizationbown?bWhatbdebtsbarebowed?bHow
bmuchbincomebisbearned?b Arebexpensesbreasonablebforbtheblevelbofbsales?b Arebcusto
mers’baccountsbbeingbpromptlybcollected?
5.
Servicebbusinessesbinclude:bbStandardbandbPoor’s,bDunb&bBradstreet,bMerrillbLync
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
SolutionsbManual,bChapterb1 1
, h,bSouthwestbAirlines,bCitiCorp,bHumana,bCharlesbSchwab,bandbPrudential.bbBusiness
esbofferingbproductsbincludebNike,bReebok,bGap,bApple,bFordbMotorbCo.,bPhilipbMorris
,bCoca-Cola,bBestbBuy,bandbWalMart.b
6.
Thebinternalbrolebofbaccountingbisbtobservebtheborganization’sbinternalboperatingbfun
ctions.bItbdoesbthisbbybprovidingbusefulbinformationbforbinternalbusersbinbcompletingbt
heirbtasksbmorebeffectivelybandbefficiently.bBybprovidingbthisbinformation,baccountingb
helpsbtheborganizationbreachbitsboverallbgoals.
7.
Accountingbprofessionalsbofferbmanybservicesbincludingbauditing,bmanagementbad
vice,btaxbplanning,bbusinessbvaluation,bandbmoneybmanagement.
8.
Marketingbmanagersbareblikelybinterestedbinbinformationbsuchbasbsalesbvolume,badv
ertisingbcosts,bpromotionbcosts,bsalariesbofbsalesbpersonnel,bandbsalesbcommissions.
b
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
2 Financialb&bManagerialbAccounting,b7thbEdition
,bbb Fullbfilebatbhttps://testbanku.eu/
b 9.
Accountingbisbdescribedbasbabservicebactivitybbecausebitbservesbdecisionbmakersbb
ybprovidingbinformationbtobhelpbthembmakebbetterbbusinessbdecisions.
10. Somebaccounting-
relatedbprofessionsbincludebconsultant,bfinancialbanalyst,bunderwriter,bfinancialbplann
er,bappraiser,bFBIbinvestigator,bmarketbresearcher,bandbsystembdesigner.
11.
Ethicsbrulesbrequirebthatbauditorsbavoidbauditingbclientsbinbwhichbtheybhavebabdirect
binvestment,borbifbthebauditor’sbfeebisbdependentbonbthebfiguresbinbthebclient’sbreports.b
bThisbwillbhelpbpreventbothersbfrombdoubtingbthebqualitybofbthebauditor’sbreport.
12.
Inbadditionbtobpreparingbtaxbreturns,btaxbaccountantsbhelpbcompaniesbandbindividu
alsbplanbfuturebtransactionsbtobminimizebthebamountbofbtaxbtobbebpaid.bbTheybarebalsob
activelybinvolvedbinbestatebplanningbandbinbhelpingbsetbupborganizations.bSomebtaxbac
countantsbworkbforbregulatorybagenciesbsuchbasbthebIRSborbthebvariousbstatebdepartm
entsbofbrevenue.bbThesebtaxbaccountantsbhelpbtobenforcebtaxblaws.
13.
Thebobjectivitybconceptbmeansbthatbfinancialbstatementbinformationbisbsupportedbb
ybindependent,bunbiasedbevidencebotherbthanbsomeone’sbopinionborbimagination.bbThi
sbconceptbincreasesbthebreliabilitybandbverifiabilitybofbfinancialbstatementbinformation.
14. Thisbtreatmentbisbjustifiedbbybbothbthebcostbprinciplebandbthebgoing-
concernbassumption.
15.
Thebrevenuebrecognitionbprinciplebprovidesbguidancebforbmanagersbandbauditorsbsobt
heybknowbwhenbtobrecognizebrevenue.bbIfbrevenuebisbrecognizedbtoobearly,bthebbusines
sblooksbmorebprofitablebthanbitbis.bbOnbthebotherbhand,bifbrevenuebisbrecognizedbtooblat
ebthebbusinessblooksblessbprofitablebthanbitbis.bbThisbprinciplebdemandsbthatbrevenuebb
ebrecognizedbwhenbitbisbbothbearnedb(whenbserviceborbproductbprovided)bandbcanbbeb
measuredbreliably.bbThebamountbofbrevenuebshouldbequalbthebvaluebofbthebassetsbrecei
vedborbexpectedbtobbebreceivedbfrombthebbusiness’sboperatingbactivitiesbcoveringbabsp
ecificbtimebperiod.
16.
Businessborganizationsbcanbbeborganizedbinbonebofbthreebbasicbforms:bsolebproprie
torship,bpartnership,borbcorporation.bThesebformsbhavebimplicationsbforblegalbliability,
btaxation,bcontinuity,bnumberbofbowners,bandblegalbstatusbasbfollows:
Proprietorship bbbbPartnership bbbbCorporation
Businessbentity yes yes yes
Legalbentity no no yes
Limitedbliability no* no* yes
Unlimitedblife no no yes
Businessbtaxed no no yes
Onebownerballowed yes no yes
*ProprietorshipsbandbpartnershipsbthatbarebsetbupbasbLLCsbprovideblimitedbliability.
17.
(a)bAssetsbarebresourcesbownedborbcontrolledbbybabcompanybthatbarebexpectedbtobyi
eldbfuturebbenefits.b(b)bLiabilitiesbarebcreditors’bclaimsbonbassetsbthatbreflectbobligatio
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
SolutionsbManual,bChapterb1 3
, nsbtobprovidebassets,bproducts,borbservicesbtobothers.b(c)bEquitybisbthebowner’sbclaimb
onbassetsbandbisbequalbtobassetsbminusbliabilities.b(d)bNetbassetsbreferbtobequity.
18.
Equitybisbincreasedbbybinvestmentsbfrombownersb(stockbissuances)bandbbybnetbinco
meb(whichbisbthebexcessbofbrevenuesboverbexpenses).bbItbisbdecreasedbbybdividendsba
ndbbybabnetblossb(whichbisbthebexcessbofbexpensesboverbrevenues).
©2018bbybMcGraw-
HillbEducation.bbThisbisbproprietarybmaterialbsolelybforbauthorizedbinstructorbuse.bNotbauthorizedbforbsaleborbdistributionbinbanybmanner.bThisbd
ocumentbmaybnotbbebcopied,bscanned,bduplicated,bforwarded,bdistributed,borbpostedbonbabwebsite,binbwholeborbpart.
4 Financialb&bManagerialbAccounting,b7thbEdition
