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Billie M Cunningham Loren A Nikolai John D Bazley Marie Kavanagh Geoff Slaughter Sharelle Simmons Information for Busi ness Decisions
SOLUTIONS MANUAL
Accounting Information for Business Decisions 1st Edition Cunningham Solutions Manual Visit TestBankDeal.com to get complete for all chapters
Cunningham 1e Accounting: Information for Business Decisions Solutions Manual
© 2012 Cengage Learning Australia Chapter 1 Introduction to business, accounting and the role of professional skills
The questions in this chapter are divided into three sections:
• Testing your knowledge: these questions are straightforward and are designed to help students assess their basic knowledge of a particular topic.• Applying your knowledge: these questions ask students to use their basic knowledge to solve a particular problem.• Making evaluations: these questions are more complex and ask students to integrate their knowledge of a particular topic or topics to make decisions.We have included the ‘Content analysis’ below to help instructors decide which applying your knowledge questions to assign. It briefly summarises the content of each question.We did not provide a content analysis for the making evaluations questions because of their lack of uniformity, and because of the multiple topics included in them.
Content analysis for applying your knowledge questions 1.28 Service and Manufacturing Businesses. Explain how two businesses are examples of a service business and a manufacturing business.
1.29 Cash Flows. Explain how knowledge of a business’s cash receipts and payments would help a bank make a loan decision. Determine which financial statement the bank would request for help making the decision.
1.30 Business Organisation. List factors involved in deciding whether to operate as a sole proprietorship, a partnership, or a business.
1.31 Business Location. List questions a business should ask before opening a factory in a new location.
1.32 International Business Location. Referring to 1.31, list questions a business should ask before opening an international branch. Compare questions with 1.31.
1.33 Internal and External Users. List examples of business information useful to both internal and external users.
1.34 Management Information. Give examples of information that would be useful in the management activities of planning, operating, and evaluating.
1.35 GAAP. Explain what generally accepted accounting principles means and how they affect business reports. Explain why new proposals would concern business owners.
1.36 Financial statements. Describe financial statements, list the major financial statements, and explain what each financial statement includes.
Cunningham 1e Accounting: Information for Business Decisions Solutions Manual
© 2012 Cengage Learning Australia 1.37 Ethics. Explain how codes of ethics help businesspeople make decisions.
1.38 Forming Arguments. Consider two sides of an issue and develop arguments to support both sides.
1.39 Argument Presentation. Develop alternative methods for presenting an argument to a boss while considering possible rebuttals from the boss.
1.40 Evaluating Opportunities. Develop questions to ask a boss concerning a new job offer.
1.41 Evaluating Loan Customers. Determine what information is needed to evaluate a loan applicant and how this information could affect the loan decision.
1.42 Evaluating Accounting Information. Referring to 1.41, determine what could be added to accounting information to make it more useful in the loan decision.
1.43 Critical Thinking and Problem Solving. Develop a list of ideas to solve an office problem.
1.44 Logical Application of Knowledge and Reasoning. Determine the flaw in a co- worker’s reasoning.
Cunningham 1e Accounting: Information for Business Decisions Solutions Manual
© 2012 Cengage Learning Australia Testing your knowledge
1.1 Private enterprise refers to an economic system in which individuals, rather than government, own and operate businesses.
1.2 A service business is different from a manufacturing or merchandising business because it sells services, rather than goods or physical products to customers.
1.3 Both merchandising and manufacturing businesses sell products to their customers.The difference between the two is that a manufacturing business makes the products it sells. A merchandising business buys products that are ready to be sold (often from a manufacturing business) and then sells those products to its customers.
1.4 Entrepreneurship refers to a situation in which an individual with an idea for a business willingly risks the loss of both time and money to obtain capital to use in the production and sale of goods or services.
1.5 As an entrepreneur in need of resources, you might go to a bank for a loan or invest your own money. If you need equipment, machinery, or furniture, you might finance the purchase of these items through the seller or lease them. Entrepreneurs also can obtain capital from individuals who have money to invest.
1.6 The first factor affecting the business environment is easy access to a vast amount of information which allows businesses to make decisions using timely information. The only drawback is that managers must be able to sort through the information to find that which is most relevant and timely.The second factor is technological advancement. Technology has extended the work day and allowed quick communication over vast distances. It also has allowed access to up-to-date information and enabled production lines to work without human intervention. This development has made the world more competitive.The third factor affecting the business environment is the globalisation of business activities. Globalisation creates a larger, more diverse marketplace. The challenge is to market the same product to different cultures using different languages and currencies.The fourth factor is the increasing number of regulations which a business must follow. As a business chooses to operate in different countries, the number of regulations that it must follow may increase. Businesses may be affected by politically arranged, economic, or trade agreements between countries.
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