Fullpfilepatphttps://testbanku.eu/
ppp
Solution Manual for Finan p p p
cial Accounting Fundam
p p
entals 6th Edition By Wil p p p p
Complete downloadable file at: p p p
https://testbanku.eu/Solution-Manual-
for-Financial-Accounting-Fundamentals-
6th-Edition-By-Wil p
QUESTIONS
1.
Theppurposepofpaccountingpisptopprovidepdecisionpmakerspwithprelevantpandpreliabl
epinformationptophelppthempmakepbetterpdecisions.pExamplespincludepinformationpforp
peoplepmakingpinvestments,ploans,pandpbusinesspplans.p
2.
Technologypreducesptheptime,peffort,pandpcostpofprecordkeeping.pTherepispstillpapde
mandpforppeoplepwhopcanpdesignpaccountingpsystems,psuperviseptheirpoperation,pana
lyzepcomplexptransactions,pandpinterpretpreports.pDemandpalsopexistspforppeoplepwho
pcanpeffectivelypusepcomputersptoppreparepandpanalyzepaccountingpreports.pTechnolo
gypwillpneverpsubstitutepforpqualifiedppeoplepwithpabilitiesptopprepare,puse,panalyze,pan
dpinterpretpaccountingpinformation.
3.
Externalpuserspandptheirpusespofpaccountingpinformationpinclude:p(a)plenders,ptopme
asurepthepriskpandpreturnpofploans;p(b)pshareholders,ptopassesspwhetherptopbuy,psell,po
rpholdptheirpshares;p(c)pdirectors,ptopoverseeptheirpinterestspinptheporganization;p(d)pem
ployeespandplaborpunions,ptopjudgepthepfairnesspofpwagespandpassesspfuturepemploy
mentpopportunities;pandp(e)pregulators,ptopdeterminepwhetherptheporganizationpispcom
plyingpwithpregulations.pOtherpusersparepvoters,plegislators,pgovernmentofficials,pcon
tributorsptopnonprofits,psuppliers,pandpcustomers.
4.
Businesspownerspandpmanagerspusepaccountingpinformationptophelppanswerpquesti
onspsuchpas:pWhatpresourcespdoespanporganizationpown?pWhatpdebtsparepowed?pHow
pmuchpincomepispearned?p Arepexpensespreasonablepforptheplevelpofpsales?p Arepcusto
mers’paccountspbeingppromptlypcollected?
5.
Servicepbusinessespinclude:ppStandardpandpPoor’s,pDunp&pBradstreet,pMerrillpLync
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
SolutionspManual,pChapterp1 1
, h,pSouthwestpAirlines,pCitiCorp,pHumana,pCharlespSchwab,pandpPrudential.ppBusiness
espofferingpproductspincludepNike,pReebok,pGap,pApple,pFordpMotorpCo.,pPhilippMorris
,pCoca-Cola,pBestpBuy,pandpWalMart.p
6.
Thepinternalprolepofpaccountingpisptopserveptheporganization’spinternalpoperatingpfun
ctions.pItpdoespthispbypprovidingpusefulpinformationpforpinternalpuserspinpcompletingpt
heirptaskspmorepeffectivelypandpefficiently.pBypprovidingpthispinformation,paccountingp
helpsptheporganizationpreachpitspoverallpgoals.
7.
Accountingpprofessionalspofferpmanypservicespincludingpauditing,pmanagementpad
vice,ptaxpplanning,pbusinesspvaluation,pandpmoneypmanagement.
8.
Marketingpmanagerspareplikelypinterestedpinpinformationpsuchpaspsalespvolume,padv
ertisingpcosts,ppromotionpcosts,psalariespofpsalesppersonnel,pandpsalespcommissions.
p
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
2 Financialp&pManagerialpAccounting,p7thpEdition
,ppp Fullpfilepatphttps://testbanku.eu/
p 9.
Accountingpispdescribedpaspapservicepactivitypbecausepitpservespdecisionpmakerspb
ypprovidingpinformationptophelppthempmakepbetterpbusinesspdecisions.
10. Somepaccounting-
relatedpprofessionspincludepconsultant,pfinancialpanalyst,punderwriter,pfinancialpplann
er,pappraiser,pFBIpinvestigator,pmarketpresearcher,pandpsystempdesigner.
11.
Ethicsprulesprequirepthatpauditorspavoidpauditingpclientspinpwhichptheyphavepapdirect
pinvestment,porpifpthepauditor’spfeepispdependentponpthepfigurespinpthepclient’spreports.p
pThispwillphelpppreventpotherspfrompdoubtingpthepqualitypofpthepauditor’spreport.
12.
Inpadditionptoppreparingptaxpreturns,ptaxpaccountantsphelppcompaniespandpindividu
alspplanpfutureptransactionsptopminimizepthepamountpofptaxptopbeppaid.ppTheyparepalsop
activelypinvolvedpinpestatepplanningpandpinphelpingpsetpupporganizations.pSomeptaxpac
countantspworkpforpregulatorypagenciespsuchpaspthepIRSporpthepvariouspstatepdepartm
entspofprevenue.ppTheseptaxpaccountantsphelpptopenforceptaxplaws.
13.
Thepobjectivitypconceptpmeanspthatpfinancialpstatementpinformationpispsupportedpb
ypindependent,punbiasedpevidencepotherpthanpsomeone’spopinionporpimagination.ppThi
spconceptpincreasespthepreliabilitypandpverifiabilitypofpfinancialpstatementpinformation.
14. Thisptreatmentpispjustifiedpbypbothpthepcostpprinciplepandpthepgoing-
concernpassumption.
15.
Theprevenueprecognitionpprinciplepprovidespguidancepforpmanagerspandpauditorspsopt
heypknowpwhenptoprecognizeprevenue.ppIfprevenuepisprecognizedptoopearly,pthepbusines
splookspmorepprofitablepthanpitpis.ppOnpthepotherphand,pifprevenuepisprecognizedptooplat
epthepbusinessplooksplesspprofitablepthanpitpis.ppThispprinciplepdemandspthatprevenuepb
eprecognizedpwhenpitpispbothpearnedp(whenpserviceporpproductpprovided)pandpcanpbep
measuredpreliably.ppThepamountpofprevenuepshouldpequalpthepvaluepofpthepassetsprecei
vedporpexpectedptopbepreceivedpfrompthepbusiness’spoperatingpactivitiespcoveringpapsp
ecificptimepperiod.
16.
Businessporganizationspcanpbeporganizedpinponepofpthreepbasicpforms:psolepproprie
torship,ppartnership,porpcorporation.pThesepformsphavepimplicationspforplegalpliability,
ptaxation,pcontinuity,pnumberpofpowners,pandplegalpstatuspaspfollows:
Proprietorship ppppPartnership ppppCorporation
Businesspentity yes yes yes
Legalpentity no no yes
Limitedpliability no* no* yes
Unlimitedplife no no yes
Businessptaxed no no yes
Onepownerpallowed yes no yes
*ProprietorshipspandppartnershipspthatparepsetpuppaspLLCspprovideplimitedpliability.
17.
(a)pAssetsparepresourcespownedporpcontrolledpbypapcompanypthatparepexpectedptopyi
eldpfuturepbenefits.p(b)pLiabilitiesparepcreditors’pclaimsponpassetspthatpreflectpobligatio
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
SolutionspManual,pChapterp1 3
, nsptopprovidepassets,pproducts,porpservicesptopothers.p(c)pEquitypispthepowner’spclaimp
onpassetspandpispequalptopassetspminuspliabilities.p(d)pNetpassetspreferptopequity.
18.
Equitypispincreasedpbypinvestmentspfrompownersp(stockpissuances)pandpbypnetpinco
mep(whichpispthepexcesspofprevenuespoverpexpenses).ppItpispdecreasedpbypdividendspa
ndpbypapnetplossp(whichpispthepexcesspofpexpensespoverprevenues).
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
4 Financialp&pManagerialpAccounting,p7thpEdition
ppp
Solution Manual for Finan p p p
cial Accounting Fundam
p p
entals 6th Edition By Wil p p p p
Complete downloadable file at: p p p
https://testbanku.eu/Solution-Manual-
for-Financial-Accounting-Fundamentals-
6th-Edition-By-Wil p
QUESTIONS
1.
Theppurposepofpaccountingpisptopprovidepdecisionpmakerspwithprelevantpandpreliabl
epinformationptophelppthempmakepbetterpdecisions.pExamplespincludepinformationpforp
peoplepmakingpinvestments,ploans,pandpbusinesspplans.p
2.
Technologypreducesptheptime,peffort,pandpcostpofprecordkeeping.pTherepispstillpapde
mandpforppeoplepwhopcanpdesignpaccountingpsystems,psuperviseptheirpoperation,pana
lyzepcomplexptransactions,pandpinterpretpreports.pDemandpalsopexistspforppeoplepwho
pcanpeffectivelypusepcomputersptoppreparepandpanalyzepaccountingpreports.pTechnolo
gypwillpneverpsubstitutepforpqualifiedppeoplepwithpabilitiesptopprepare,puse,panalyze,pan
dpinterpretpaccountingpinformation.
3.
Externalpuserspandptheirpusespofpaccountingpinformationpinclude:p(a)plenders,ptopme
asurepthepriskpandpreturnpofploans;p(b)pshareholders,ptopassesspwhetherptopbuy,psell,po
rpholdptheirpshares;p(c)pdirectors,ptopoverseeptheirpinterestspinptheporganization;p(d)pem
ployeespandplaborpunions,ptopjudgepthepfairnesspofpwagespandpassesspfuturepemploy
mentpopportunities;pandp(e)pregulators,ptopdeterminepwhetherptheporganizationpispcom
plyingpwithpregulations.pOtherpusersparepvoters,plegislators,pgovernmentofficials,pcon
tributorsptopnonprofits,psuppliers,pandpcustomers.
4.
Businesspownerspandpmanagerspusepaccountingpinformationptophelppanswerpquesti
onspsuchpas:pWhatpresourcespdoespanporganizationpown?pWhatpdebtsparepowed?pHow
pmuchpincomepispearned?p Arepexpensespreasonablepforptheplevelpofpsales?p Arepcusto
mers’paccountspbeingppromptlypcollected?
5.
Servicepbusinessespinclude:ppStandardpandpPoor’s,pDunp&pBradstreet,pMerrillpLync
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
SolutionspManual,pChapterp1 1
, h,pSouthwestpAirlines,pCitiCorp,pHumana,pCharlespSchwab,pandpPrudential.ppBusiness
espofferingpproductspincludepNike,pReebok,pGap,pApple,pFordpMotorpCo.,pPhilippMorris
,pCoca-Cola,pBestpBuy,pandpWalMart.p
6.
Thepinternalprolepofpaccountingpisptopserveptheporganization’spinternalpoperatingpfun
ctions.pItpdoespthispbypprovidingpusefulpinformationpforpinternalpuserspinpcompletingpt
heirptaskspmorepeffectivelypandpefficiently.pBypprovidingpthispinformation,paccountingp
helpsptheporganizationpreachpitspoverallpgoals.
7.
Accountingpprofessionalspofferpmanypservicespincludingpauditing,pmanagementpad
vice,ptaxpplanning,pbusinesspvaluation,pandpmoneypmanagement.
8.
Marketingpmanagerspareplikelypinterestedpinpinformationpsuchpaspsalespvolume,padv
ertisingpcosts,ppromotionpcosts,psalariespofpsalesppersonnel,pandpsalespcommissions.
p
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
2 Financialp&pManagerialpAccounting,p7thpEdition
,ppp Fullpfilepatphttps://testbanku.eu/
p 9.
Accountingpispdescribedpaspapservicepactivitypbecausepitpservespdecisionpmakerspb
ypprovidingpinformationptophelppthempmakepbetterpbusinesspdecisions.
10. Somepaccounting-
relatedpprofessionspincludepconsultant,pfinancialpanalyst,punderwriter,pfinancialpplann
er,pappraiser,pFBIpinvestigator,pmarketpresearcher,pandpsystempdesigner.
11.
Ethicsprulesprequirepthatpauditorspavoidpauditingpclientspinpwhichptheyphavepapdirect
pinvestment,porpifpthepauditor’spfeepispdependentponpthepfigurespinpthepclient’spreports.p
pThispwillphelpppreventpotherspfrompdoubtingpthepqualitypofpthepauditor’spreport.
12.
Inpadditionptoppreparingptaxpreturns,ptaxpaccountantsphelppcompaniespandpindividu
alspplanpfutureptransactionsptopminimizepthepamountpofptaxptopbeppaid.ppTheyparepalsop
activelypinvolvedpinpestatepplanningpandpinphelpingpsetpupporganizations.pSomeptaxpac
countantspworkpforpregulatorypagenciespsuchpaspthepIRSporpthepvariouspstatepdepartm
entspofprevenue.ppTheseptaxpaccountantsphelpptopenforceptaxplaws.
13.
Thepobjectivitypconceptpmeanspthatpfinancialpstatementpinformationpispsupportedpb
ypindependent,punbiasedpevidencepotherpthanpsomeone’spopinionporpimagination.ppThi
spconceptpincreasespthepreliabilitypandpverifiabilitypofpfinancialpstatementpinformation.
14. Thisptreatmentpispjustifiedpbypbothpthepcostpprinciplepandpthepgoing-
concernpassumption.
15.
Theprevenueprecognitionpprinciplepprovidespguidancepforpmanagerspandpauditorspsopt
heypknowpwhenptoprecognizeprevenue.ppIfprevenuepisprecognizedptoopearly,pthepbusines
splookspmorepprofitablepthanpitpis.ppOnpthepotherphand,pifprevenuepisprecognizedptooplat
epthepbusinessplooksplesspprofitablepthanpitpis.ppThispprinciplepdemandspthatprevenuepb
eprecognizedpwhenpitpispbothpearnedp(whenpserviceporpproductpprovided)pandpcanpbep
measuredpreliably.ppThepamountpofprevenuepshouldpequalpthepvaluepofpthepassetsprecei
vedporpexpectedptopbepreceivedpfrompthepbusiness’spoperatingpactivitiespcoveringpapsp
ecificptimepperiod.
16.
Businessporganizationspcanpbeporganizedpinponepofpthreepbasicpforms:psolepproprie
torship,ppartnership,porpcorporation.pThesepformsphavepimplicationspforplegalpliability,
ptaxation,pcontinuity,pnumberpofpowners,pandplegalpstatuspaspfollows:
Proprietorship ppppPartnership ppppCorporation
Businesspentity yes yes yes
Legalpentity no no yes
Limitedpliability no* no* yes
Unlimitedplife no no yes
Businessptaxed no no yes
Onepownerpallowed yes no yes
*ProprietorshipspandppartnershipspthatparepsetpuppaspLLCspprovideplimitedpliability.
17.
(a)pAssetsparepresourcespownedporpcontrolledpbypapcompanypthatparepexpectedptopyi
eldpfuturepbenefits.p(b)pLiabilitiesparepcreditors’pclaimsponpassetspthatpreflectpobligatio
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
SolutionspManual,pChapterp1 3
, nsptopprovidepassets,pproducts,porpservicesptopothers.p(c)pEquitypispthepowner’spclaimp
onpassetspandpispequalptopassetspminuspliabilities.p(d)pNetpassetspreferptopequity.
18.
Equitypispincreasedpbypinvestmentspfrompownersp(stockpissuances)pandpbypnetpinco
mep(whichpispthepexcesspofprevenuespoverpexpenses).ppItpispdecreasedpbypdividendspa
ndpbypapnetplossp(whichpispthepexcesspofpexpensespoverprevenues).
©2018pbypMcGraw-
HillpEducation.ppThispispproprietarypmaterialpsolelypforpauthorizedpinstructorpuse.pNotpauthorizedpforpsaleporpdistributionpinpanypmanner.pThispd
ocumentpmaypnotpbepcopied,pscanned,pduplicated,pforwarded,pdistributed,porppostedponpapwebsite,pinpwholeporppart.
4 Financialp&pManagerialpAccounting,p7thpEdition
