Intermediate Accounting Chapter 1

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CHAPTER 1 Financial Accounting and Accounting Standards ASSIGNMENT CLASSIFICATION TABLE Topics 1. 2. 3. 4. 5. Subject matter of accounting. Environment of accounting. Role of principles, objectives, standards, and accounting theory. Historical development of GAAP. Authoritative pronouncements and rulemaking bodies. Role of pressure groups. Ethical issues. Questions 1 2, 3, 29 4, 5, 6, 7 8, 9, 10, 11 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23 23, 24, 25, 26, 27, 28 30 Cases 4 6, 7 1, 2, 3, 5 8 3, 9, 11, 12, 13, 14, 16, 17 10, 19, 20 15, 18 6. 7. Copyright © 2011 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only) 1-1 ASSIGNMENT CHARACTERISTICS TABLE Level of Difficulty Simple…show more content…
3. If a company’s financial performance is measured accurately, fairly, and on a timely basis, the right managers and companies are able to attract investment capital. To provide unreliable and irrelevant information leads to poor capital allocation which adversely affects the securities market. 4. The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in decisions about providing resources to the entity through equity investments and loans or other forms of credit. Information that is decision-useful to capital providers (investors) may also be useful to other users of financial reporting who are not investors. 5. Investors are interested in financial reporting because it provides information that is useful for making decisions (referred to as the decision-usefulness approach). When making these decisions, investors are interested in assessing the company’s (1) ability to generate net cash inflows and (2) management’s ability to protect and enhance the capital providers’ investments. Financial reporting should therefore help investors assess the amounts, timing, and uncertainty of prospective cash inflows from dividends or interest, and the proceeds from the sale, redemption, or maturity of securities or loans. In order for investors to make these assessments, the economic resources of an enterprise, the claims to
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