ASSIGNMENT CLASSIFICATION TABLE

CHAPTER 1

The Purpose and Use of Financial Statements

ASSIGNMENT CLASSIFICATION TABLE

Study Objectives Questions Brief Exercises Exercises A Problems B Problems BYP 1.Identify the users and uses of accounting.

1, 2, 3, 4,

5, 6

1, 5 1, 4 1A 1B 3, 4, 5,

7, 9 2.Describe the primary forms of business organization.

7, 8, 9, 10 2, 5 2 2A 2B 4, 6, 9

3.Explain the three main types of business activity.

11, 12, 13,

14

3, 4, 5 3, 4 3A, 4A 3B, 4B 9

4.Describe the content and purpose of each of the financial statements.

15, 16, 17,

18, 19, 20,

21, 22

6, 7, 8, 9,

10, 11, 12

5, 6, 7, 8,

9, 10, 11,

12, 13

4A, 5A,

6A, 7A,

8A, 9A,

10A

4B, 5B,

6B, 7B,

8B, 9B,

10B

1, 2, 3,

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Kimmel, Weygandt, Kieso, Trenholm, Irvine Financial Accounting, Fifth Canadian Edition

ASSIGNMENT CHARACTERISTICS TABLE

Problem Number

Description Difficulty Level Time Allotted (min.) 1A Identify users and uses of financial statements. Moderate 30-40

2A Determine forms of business organization. Moderate 20-30

3A Identify business activities. Simple 25-30

4A Classify accounts. Simple 20-30

5A Classify accounts. Simple 20-30

6A Determine missing amounts; answer questions. Complex 30-40

7A Prepare financial statements. Moderate 35-45

8A Prepare statement of cash flows; comment on adequacy of cash.Moderate 25-35

9A Calculate missing amounts; explain statement interrelationships.Moderate 40-50

10A Prepare corrected statement of financial position; identify financial statements for ASPE.Complex 35-45

1B Identify users and uses of financial statements. Moderate 30-40

2B Determine forms of business organization. Moderate 20-30

3B Identify business activities. Simple 25-30

4B Classify accounts. Simple 20-30

5B Classify accounts Simple 20-30

6B Determine missing amounts; answer questions. Complex 30-40

7B Prepare financial statements. Moderate 35-45

8B Prepare statement of cash flows; comment on adequacy of cash.Moderate 25-35

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Kimmel, Weygandt, Kieso, Trenholm, Irvine Financial Accounting, Fifth Canadian Edition

ASSIGNMENT CHARACTERISTICS TABLE (Continued)

Problem Number

Description Difficulty Level Time Allotted (min.)

9B Calculate missing amounts; explain statement interrelationships.Moderate 40-50

10B Prepare corrected statement of financial position; identify financial statements for ASPE.Complex 35-45

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Kimmel, Weygandt, Kieso, Trenholm, Irvine Financial Accounting, Fifth Canadian Edition

ANSWERS TO QUESTIONS

• Accounting is the information system that identifies and records the economic events

of an organization, and then communicates them to a wide variety of interested users.

• Everyone should study accounting since a working knowledge of accounting will be

relevant and useful to any user of accounting information, not just an accountant.

• Internal users of accounting information work for the company and include finance

directors, marketing managers, human resource personnel, production supervisors, and company officers.

External users of accounting information do not work for the company. The main external users are investors, lenders, and other creditors. Other external users include labour unions, customers, the Canada Revenue Agency (CRA), and securities commissions.

4. Internal users may want the following questions answered:

• Is there enough cash to purchase a new piece of equipment?• What price should we sell our product for to cover costs and to maximize profits?• How many employees can we afford to hire this year?• Which product line is the most profitable?• How much of a pay raise can the company afford to give me?

External users may want the following questions answered:

• Is the company earning enough to give me my required return on investment?• Will the company be able to repay its debts as the debts come due?• Will the company stay in business long enough to service the products I buy from it?

• Ethics are important because without the expectation of ethical behaviour, the

information presented in the financial statements would have no credibility for the accounting profession. Without credibility, financial statement information would be useless to financial statement users.

• Answers will vary. Examples of ethical dilemmas follow.

(a) Professor at a university: being asked to give additional marks to a student “because they need it.”

(b) A cashier at a Fast Food Inc.: giving free food to friends.

(c) A chief financial officer: presenting financial information so that it increases a performance bonus.(d) A supplier of goods to a company: selling goods that are past their due date to boost profits.

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