Introductory Accounting A Measurement Approach For Managers 1st Edition Daniel P. Tinkelman - Solutions

What are some of the attributes of a company that the FASB thinks are important to potential investors?
What does the FASB consider the two most important criteria for information to have in order to be useful to potential investors and creditors?
What does the FASB consider to be“enhancing characteristics” of accounting information?
Explain what the FASB means by“relevance” and “faithful representation.”
Explain what the FASB means by “materiality.”
What is “equity”? How is it defined?
Equity at the beginning of one period is a“stock.” What are the flows that explain the change in equity from the beginning of one period to the end of the period?
What is the difference between a revenue and a gain?
Why does prepaid insurance meet the FASB’s definition of an asset?
Why do bonuses that employees have earned, but that the company has not yet paid, meet the FASB’s definition of a liability?
What is the difference between fixed costs, variable costs, and semi-variable costs?
Is a cost the same as an expense? Explain.
Is an expense the same as an expenditure? Explain.
What is required, under FASB rules, for a revenue to be recognized?
Under FASB rules, when do expenses have to be recognized?
What is accrual accounting?
Which standard-setter would do each of the following:A. Set accounting rules used by U.S. public companies?B. Set accounting rules generally followed in the U.S. by private companies?C. Set accounting standards followed in most countries around the world?
The FASB defined the following elements of financial statements: assets, liabilities, equity, revenues, gains, expenses, losses, investments by owners and distributions to owners. For each of the items below, indicate which element best describes it:A. ——Cash B. ——Sales to customers during
The FASB defined the following elements of financial statements: assets, liabilities, equity, revenues, gains, expenses, losses, investments by owners and distributions to owners. For each of the items below, indicate which element best describes it:A. ——Land owned by the company B.
Use the data given to find the missing figure: Assets Liabilities Equity
Use the data given to find the missing figures: Beginning Equity Comprehensive Income (loss) Distributions Investments Ending to Owners by Owners Equity ARCDE A. $0 $3,000,000 $200,000 $1,000,000 ? B. $2,000,000 $1,000,000 $500,000 ? $2,750,000 C. $4,000,000 $1,500,000 ? $1,000,000 $4,500,000 D.
Use the data given to find the missing figures: Revenues Gains Expenses Losses Comprehensive Income (Loss) ARCDE A. $10,000,000 $500,000 $5,000,000 $300,000 ? B. $8,000,000 $100,000 $7,000,000 ? $900,000 C. $4,000,000 $1,500,000 ? $1,000,000 $100,000 D. $6,000,000 ? $4,000,000 $1,000,000 $1,000,000
Assume a university is trying to analyze its costs for a possible new program. For each of the following situations, indicate if the cost is fixed, variable, step or semi-variable with regard to the number of students:A. The university prints an ID card for each student. There is a cost for each
A company is being created that will tutor high school students who are studying for college entrance exams. It could be set up in different ways. It expects to teach 100 classes a year.Explain whether each decision would result in a fixed cost, a variable cost, step, or a semi-variable cost with
A company makes kitchen pans. It has various costs. Which are costs that relate directly to the products made, and which are costs of the period?A. Metal bought that is made into the pans B. Wages paid to the people who make the pans C. Wages paid to the company chief financial officer D.
For each of the following situations, indicate how it affects: total assets; total liabilities; and equity. For example, when a company borrows money from a bank, it has more cash and it also has a liability. Therefore, assets increase, liabilities increase, but equity is unchanged.A. The company
For each of the following situations, indicate how it affects: total assets; total liabilities; and equity. For example, when a company borrows money from a bank, it has more cash and it also has a liability. Therefore, assets increase, liabilities increase, but equity is unchanged.A. A company
For each of the transactions in A9, indicate if they affect comprehensive income.
For each of the transactions in A10, indicate if they affect comprehensive income.
Accountants need to record some things that happen that are not transactions with other companies.For each of the items listed below, indicate how you think they should affect the accounting equation. For example, assume that a company had paid its rent before the month started, and recorded the
Accountants need to record some things that happen that are not transactions with other companies.For each of the items listed below, indicate how you think they should affect the accounting equation. For example, assume that a real estate company had received some rent from a tenant before the
The general criteria for revenue recognition are explained in the chapter. For each of the following, say if you believe if these criteria have been met.A. A grocery store sells three cans of tuna fish to a customer for cash.B. A grocery store sells $70 worth of groceries to a customer, who uses a
For each of the following situations, indicate whether you think an expense should be recognized during the current period.A. A law firm pays its employees for work they did during the period.B. A law firm buys new office furniture that it expects to last for five years. Should the amount paid for
For each of the situations below, indicate which of the qualitative characteristics listed by the FASB are being violated. The characteristics are: relevance; faithful representation; timeliness; verifiability;understandability; and comparability.A. A company’s investors need to file their tax
Indicate whether each of the following is either an inflow or an outflow of cash, and indicate if the item should be classified as operating, investing, or financing.a. Receipt of cash from customers for goods sold.b. Payment of cash to suppliers for inventory purchased.c. Receipt of cash from a
The chapter makes a distinction between stocks and flows. In this example, the “stock” is the amount of inventory on hand at any one time. The “flows” are the purchases of inventory and the costs of the inventory sold to customers. Use the information shown to find the missing items.
The chapter makes a distinction between stocks and flows. In this example, the “stock” is the amount of accounts receivable at any one time. The “flows” are new sales on credit and amounts collected from customers related to sales made in the past. Use the information shown to find the
The chapter makes a distinction between stocks and flows. In this example, the “stock” is the amount of cash at any one time. The“flows” are the operating, investing, and financing cash flows during the year.Use the information shown to find the missing items. Beginning Cash Operating
The FASB lists a number of desirable characteristics of information. In practice, a choice of one way of measuring things may make one of these characteristics better, but might make another worse. Explain what factors are made better or worse in each of these choices:A. The FASB had to choose
The chapter discusses the characteristics of information that the FASB and the IMA consider desirable. In many cases, their ideas are similar.However, one place in which they differ is that the IMA has two criteria for how information should be used. The IMA say managers should use information in a
The FASB has made definitions of various financial statement elements. However, in practice, it is sometimes not obvious whether something meets the definition of an element or not. For each of the following, comment on how the item should be classified.A. A company has sold a special kind of stock
The FASB has designed an accounting system that is meant to serve the needs of outside investors and creditors. However, there are other parties that are interested in a company’s performance, and they may have other needs. Consider each of the following:A. The FASB often requires companies to
The cash method of accounting basically recognizes expenses when cash is spent, and revenues when cash is received.The accrual method uses the revenue and expense recognition methods described in this chapter. For each of the following, indicate whether it would be recognized under the accrual
Assume that you own an accounting business, and that you account for this business on a cash basis. Also assume that you are trying to show a low income for the year for your tax return.A. Which of these possible actions in December would help you report lower income on your tax return?a. Asking
The text indicates that the FASB’s rules for classifying cash flows differ in some cases from the IASB’s rules. Indicate in each case which rule you think is more appropriate.A. The IASB allows a company to classify interest it pays on its loans as a financing cash flow. The FASB does not, and
The United States is considering adopting IFRS for public companies. One issue is that this would transfer the authority to set standards from the SEC (part of the U.S. government) to the IASB, a foreign nongovernmental organization. Do you feel comfortable with this change in who sets rules? Why
A number of the principles of accrual accounting can be illustrated with a simple example. An 11-year-old girl, Mary, decides to make a little bit of money by setting up a lemonade stand. She plans to sell lemonade every Saturday for 10 weekends. The following events take place on the first
Historically, the FASB has tended to issue very precise rules on how businesses must account for particular transactions. The IASB has instead tended to decide on general principles to be followed, and has expected accountants and businesses to use their judgment in applying the principles. This
The choices by the FASB and the IASB of what to measure also mean that some things are not typically measured or recognized in accounting. Consider what you think the effects of the following may be:A. Companies do not record an asset for the skills of their workers.B. Companies typically do not
In the early 20th century, lenders were the most important users of company financial statements. Over time, shareholders and potential buyers of stock became more important. Historically, lenders were believed to have favored “conservative” accounting, and U.S. accounting used to have a
Tony Tinker (1985) wrote that one theme that runs through the history of accounting is:[A] concern to present an image of objectivity, independence, and neutrality by shunning “subjective” questions of value and confining accounting data to“objective” market prices (historical and current).
Go to the IASB website (www.iasb.org) and find out:A. How many members are there of the IASB?B. What countries have representatives on the organization that oversees the IASB?
Go to the FASB website (www.fasb.org) and find out:A. How many members are there of the FASB?B. How are they selected?
Go to the website of a public company that interests you, and find its latest financial statements. (Usually you can find a company’s financial statements in a section called “investor relations.” Often, the company provides SEC filings, and the annual financial statements are in the Form
What are the two basic reasons managers report financial results to shareholders?
What is the relationship between the idea of “materiality”from Chapter 2 and the guidance on design of reports in this chapter?
Why is it important for reports to be:A. Succinct?B. Comparable in design?C. Distributed only to intended users?D. Timely?
What is meant by information overload?
What are some of the bad effects that occur when decision-makers are overloaded with information?
What are the three methods suggested in the chapter for reducing information overload?
What are benefits and disadvantages of reporting aggregated data?
What are advantages and disadvantages of providing disaggregated data to users?
What are advantages and disadvantages of providing information orally?
What are advantages and disadvantages of reporting accounting data in prose narratives, e.g. sentences and paragraphs?
What are some examples of accounting reports in prose form?
What are some techniques suggested in the chapters to help organize prose reports, so readers can find information quickly?
List three guidelines given in the chapter for ways to make business writing more clear and understandable for readers.
What are advantages and disadvantages of using tables to report data?
What are some examples of accounting reports that are in the form of tables?
List three guidelines given in the chapter for ways to make tables clearer.
What are some advantages and disadvantages of using graphs to report financial data?
What are three guidelines the chapter cites for creating good graphs?
What are three things the chapter indicates should be avoided when preparing graphs?
Why should graphs usually not use three-dimensional formats?
What is a reconciliation?
Explain what you would normally see on a:A. Balance sheet B. Income statement C. Statement of comprehensive income D. Statement of shareholders’ equity E. Statement of cash flows.
Which, if any, of the five basic financial statements is:A. A list of things at one point in time?B. A computation?C. A reconciliation?
What does it mean for a balance sheet to be“classified?
What is the difference between a “current asset”and a “noncurrent asset”?
What is a “multi-step” income statement?
What is the difference between a statement of comprehensive income and an income statement?
What are two limitations of the usefulness of financial statements?
What are some separate budgets that might be part of a company’s overall master budget package?
What is meant by a variance in a performance report?
Match the following general criteria of good reports with definitions:A. Timeliness ——1. including all relevant information B. Succinctness/brevity ——2. having value worth more than the cost C. Proper distribution ——3. Reaches decision-makers when they need it D. Completeness ——4.
The chapter indicates certain general criteria for reports. For each of the examples below, explain what criteria you believe have been violated:A. A boss asked a research assistant to find out what the longest river in the world was. The assistant gave the boss a book that contained a list of
The chapter lists five different ways of reporting raw data: providing unsummarized data; oral reports; prose;tables, and graphs. For each of the following situations, indicate which method you feel would be most appropriate:A. Your boss is about to go into a meeting, and wants to know the
The chapter cited various guidelines about clear business writing. For each of the following examples, suggest a clearer way to say the same thing.23 A. A management letter comment was generated by our firm in prior periods regarding the collection of these types of accounts.B. Management must be
For each of the terms or phrases below, suggest a simpler word or phrase with the same meaning.A. Endeavor B. Optimum C. Subsequent to D. Communicate E. Modification
Table 3.8 violates several of the rules listed in the chapter for preparing clear tables. Briefly explain the problems with this table. Table 3.8 Professor name Teaching ratings Number of publications Tenure decision Alexander Baker Excellent Poor 7 4 Granted Not Granted
Prepare a better version of Table 3.8. Your purpose is to better understand what factors result in tenure being granted. What trends do you see in this revised table? What makes it clearer? Table 3.8 Professor name Teaching ratings Number of publications Tenure decision Alexander Baker Excellent
Table 3.9 presents data from six public companies from 2013, slightly modified for teaching purposes. Briefly explain the things that are wrong with this table, using the guidance in the chapter. Table 3.9 Some Statistics on Six Companies 2013 revenues 2013 net income 2013 net 2013 2013 revenue
Prepare a better version of Table 3.9. Assume your purpose is to clearly show patterns in the relative income and revenue per employee in the drug and soft drink industries. Table 3.9 Some Statistics on Six Companies 2013 revenues 2013 net income 2013 net 2013 2013 revenue 2013 total employees
Table 3.10 is a table of balance sheet data for eight companies.A. Suggest ways to make this table clearer.B. What patterns do you see in this data? Table 3.10 Balance Sheet Data for Eight Companies Total assets Total liabilities Equity in 2013 Equity/assets Type In 2013 in millions In 2013 in
Make your own version of Table 3.10. Assume the point of the table is to compare the relative sizes and the relative ratio of equity to assets of leading banks with those of leading oil companies. Table 3.10 Balance Sheet Data for Eight Companies Bank of America Chevron Corp Citigroup Inc.
The graph in Figure 3.2 is a reconstruction of one that was shown on television, in a 2012 story about the effects on personal income tax rates if the“Bush tax cuts” were allowed to expire. The top pearsonal income tax rate would rise from 35% to 39.6%.A. In what way do you think this graph
The data in Table 3.11 are the closing prices for the Dow Jones average for a week in November, 2014.A. Input this information into two columns in an Excel spreadsheet.Then, create a line graph using the first column to label the horizontal axis, and the second column as the data to plot. Excel’s
Shown below are values for five months for an item from a company’s income statement.A. Input this information into two columns in an Excel spreadsheet.Then, create a line graph using the first column to label the horizontal axis, and the second column as the data to plot. Excel’s automatic
Listed below are various account titles or financial statement totals. For each one, indicate which financial statement(balance sheet, income statement, statement of comprehensive income, statement of cash flows, and statement of owner’s equity) you would expect to see it on. Note—some items
Listed below are various account titles or financial statement totals. For each one, indicate which financial statement(balance sheet, income statement, statement of comprehensive income, statement of cash flows, and statement of owner’s equity) you would expect to see it on. Note—some items

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Introductory Accounting A Measurement Approach For Managers 1st Edition Daniel P. Tinkelman - Solutions

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