财务会计英语版课后答案.docx

财务会计英语版课后答案.docx

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财务会计英语版课后答案

Chapter1

Page8

1.Classifyfollowingitemsaseitheranexpense（E）,arevenue（R）,anasset（A）,oraliability（L）;Cash,buildings,salariesofthesalesforce,$5owedtoacompanyforworkperformed,Mortgagetoabank,sales.

Answer:

Cash—ABuildings—ASalariesofthesalesforce—E

$5owed—LMortgagetoabank—LSales—R

2.Classifyeachofthefollowingasnoperating（O）,bank（I）,orfinancing（F）inastatementofcashflows;Wagepaidtoworkers,Cashreceivedformabankintheformofamortgage,cashdividendspaidtoasupplierofinventory,Cashpaidtopurchaseanewmachine.

Answer:

Wagepaid—OCashofmortgage--FCashdividendspaid--F

Cashpaidtosupplierofinventory—OCashpaidtopurchaseamachine—I

Page11

1.Listseveraleconomicdecisionsthatrelyonaccountinginformation.

Answer:

·Whethertograntaloan

·Howmuchtopayforashareofcommonstock.

·Whethertograntarateincreasetoanelectricutility

·Howmuchindamagestheloserofalawsuitmustpay

·Howmuchofabonustopayaplantmanager

·Whethertoenteranewmarket

2.Whydofinancialstatementshavefootnotes,andwhatkindsofinformationmightyoufindinthem?

Answer:

Financialstatementshavefootnotesbecausefinancialdisclosureisacomplexbusiness.Thenotestellussomeofthespecificsaboutthecompanyenvironment,whataccountingmethodsthecompanyhasused,whattheaccountingnumbersmightbeifalternativemethodshadbeenused,andsomeofthemajorcontingenciesthatarenotformallyincludedinthestatementproper.

Page20

1.Describetheprocessofsettingaccountingstandards.Whataretherolesofallthepartiesyoumention?

Answer:

TheFASB,aprivate,not-for-profitorganization,setsGAAPintheU.S.Itpubliclydeclaresanagenda,promulgates"ExposureDrafts"ofproposedstandards,holdsopenmeetings,andinvitesinputfrominterestedparties.TheFASBhasbeendelegatedthisauthoritybytheSEC,agovernmentagencywithlegalauthoritytodetermineGAAP.

2.Thinkofanexample,liketheexecutivecompensationexampleinthechapter,whereincentivesmightexisttobiasaccountingnumbersonewayoranother.

Answer:

Thereareotherexamples,buthereisonethatisdifferent.Ataxpayerhasincentivestobiasreportedincomedownwardinordertominimizeincometaxpayments.However,itisimportanttounderstandthattaxaccountingrulesaredifferentfromGAAP,andthisbookisaboutGAAP.Chapter14coversGAAPfortaxesinmoredetail.

Otherexamplesinclude:

·Anentrepreneurseekingaloanfromabankorfundingfromaventurecapitalistmighthaveincentivestobiasaccountingnumberstolookfavorable.

·Afirmthatissubjecttoscrutinyforearningexcessprofits（e.g.,anoilcompany）mighthaveincentivestobiasaccountingnumberstolooklessfavorable.

·Autilitysubjecttorateregulationmighthaveanincentivetobiasaccountingnumberstolooklessfavorableinordertogainmoregenerousincreasesinitsrates.（Atthiswriting,thereisaratherseverecontroversyaboutwhetherelectricutilitiesinCaliforniaaregenuinelyinfinancialdifficultyandshouldbeallowedtocontinuetoimposelargerateincrease.）

Chapter2

Page38

1Defineassets,liabilities,andequities.Gaveanexampleofeach.Howareassetsvalued?

Howareliabilitiesvalued?

Answer:

Anassetisaprobablefutureeconomicbenefitobtainedor

controlledbyanentityasaresultofapasttransaction.Cash

marketablesecurities,accountsreceivable,inventories,prepaidexpenses,patents,copyrights,trademarks,andproperty,plantandequipmentareallexamplesofassets.Aliabilityisaprobablefuturesacrificeofeconomicbenefitsarisingfrompresentobligationsofanentitytotransferassetsorprovideservicesasaresultofapasttransactionorevent.Accountspayable,accruedliabilities,unearnedrevenues,warranties,andbondspayableareallexamplesofliabilities.Accountingvaluationofassetsusesseveraldifferentmethods,includingmarketvalue,expectedrealizablevalue,lowerofcostormarket,presentvalueoffuturecashflows,andhistoricalcost.Accountingvaluationofliabilitiesistheexpectedamountthatwillbepaid,perhapsadjustedforthetimevalueofmoney.

2.Explainwhatismeantbytheentityconcept.

Answer:

Theentityisthepersonororganizationaboutwhichaccounting'sfinancialhistoryisbeingwritten.

3.Acompanysignsaten-yearemployeecontractwithavicepresident.Thesalaryis$peryear,guaranteed.Isthiscontractanasset?

Woulditappearonthebalancesheet?

Explain.

Answer:

Therightsconveyedbythecontratmaybeanassetfromaneconomicpointofview,buttheyarenotanassetunderGAAP.Thecontractwouldnotappearonthebalancesheetasanasset,becauseGAAPdoesnotrecordexecutorycontracts,whicharecontractsthatrequirefutureperformanceformbothparties.Thatis,GAAPviewsthecontractasdeterminingwhatserviceswillbeprovided,noassetisrecognizedunderGAAP.（Neitherisaliabilityforpaymentrecognizeduntilserviceshavebeenperformed.）

4.Acompanypurchasedaparcelofland10yearsagoatacostof$.Thelandhasrecentlybeenappraisedat$.Atwhatvalueisthelandcarriedinthebalancesheet?

Howdoestheappraisalaffectthecarryingvalueinthebalancesheet?

Answer:

Thelandisonthebalancesheetatitshistoricalcostof$.Thecarryingvalueofthelandisunaffectedbytheappraisal.

Page42

1、Definedebitandcredit.Whatkindofbalance,debitorcredit,wouldyouexpecttofindintheinventoryT-account？

IntheCommonStockT-account?

Answer:

AdebitisanentryontheleftsideofaT-account.AcreditisanentryontherightsideofaT-account.WewouldexcepttofindadebitbalanceinInventory,andcreditbalancesinBondsPayableandCommonStock.Thereasonistheconventionthatincreasesinassetsaredebitsandincreasesinliabilitiesandequitiesarecredits.

2、Ifthetrialbalances,itmeansthatyouhaveanalyzedalltheeffectsoftransactionscorrectly.Trueorfalse？

Explain.

Answer:

False.Abalancedmeansthatthetrialbalanceisconsistent,notnecessarilycorrect.Forexample.IfanarbitraryentryismadethatdebitsCashandcreditsCommonStockforanequalamount,thetrialbalancewillbalancebutitwillbewrong.Anaccountingcanreceiptofcashandtheissuanceofcommonstock,butitalonecannotmakecashoradditionalcommonshares.

3﹑SupposeWebsellleasesaportionofitsspacetoanothercompany.Websell’saccountsaredebitedandcreditedtorecordthistransaction?

Answer:

WebsellwoulddebitCashandaliability,RentReceivedinAdvance,fortheprepayment.

Chapter3

Page57

1.Definerevenueandexpense.Howdoesonedecidetolistanitemasrevenueinanincomestatement?

Whatismatching?

Answer:

Revenuesareincreasesinnetassetsresultingfromoperationsoveraperiodoftime.Expensearedecreasesinnetassetsresultingfromoperationsoveraperiodoftime.Revenueisrecognizedtheearningsprocessissubstantiallycomplete,atransaction

2.Giveanexamplenotfoundinthetext,ofanexpensethatispaidforincashinaprioraccountingperiod.Inasubsequentaccountingperiod.

Answer:

Therearemanyallowableresponses.Anexampleisapatentthatispurchasedandpaidforinoneyearandusedinnext.

3.Giveanexample,notfoundinthetext,ofarevenuethatisreceivedincashinaprioraccountingperiod.Inasubsequentaccountingperiod.

Answer:

Anexampleisahousepaintingcontractorthatreceivespaymentforone-thirdofthecontractpricebeforebeginningthepainting.

4.Explainwhyitisrighttothinkofanassetasacostandanexpenseasanexpiredcost.

Answer:

Anassetisafuturebenefit.Andthereisanopportunitycostassociatedwithnotsellingitforcashorexchangingittosettle

Chapter6

Page120:

1.ThefollowingtableliststheadjustmentsandhasanXinthecolumnindicatingtheapproach:

Adjustment

Estimateexpense,

Plugendingbalance

Estimateendingbalance

Plugexpense

B

X

C

X

D

X

E

X

F

X

G

X

H

X

I

X

J

X

K

X

M

2.Wefirsttakeadjustmentforprepaidinsuranceandinsuranceexpense.Itwouldbeeasytothinkofthisadjustmentasfocusingonhowmuchoftheinsurancecoverageremained,asopposedtohowmuchwasused.Infact,thesametypeoflogiccouldbeused---computingamonthlyrateforthecoverageandapplyingthattothemonthsreminding,insteadofthemonthsused.

Nowtakeadjustmentfordepreciationexpenseandaccumulateddepreciation.Estimatingthevalueoftheequipmentatyearendmightbeeasy,forexample,ifthereisamarketforusedequipment,orverydifficult,forexample,iftheequipmentwasspeciallydesignedforWebsell.Onceavalueestimatefortheequipmentatyearendisobtained,depreciationexpensewouldbethechangeinvalueovertheyear.

Page123

1.$5000×（1+0.06）^10=$5000×1.79085=$8954.24

2.$5000×（1+0.06/2）^（10×2）=$5000×（1+0.03）^20

=$5000×1.80611=$9030.56

3.$1000×（1.05）^3+$1000×（1.05）^2+$1000×（1.05）^1=$3310.13

4.（$1000×0.05/5）^13+$1000×（1+0.05/5）^10+$1000×（1+0.05/5）^5

=（$1000×（1.01）^15）+（$1000×（1.01）^10）+（$1000×（1.01）^5）

=$1160.97+$1104.62+$1051.01

=$3316.6

Page124

1.x×.（1.07）^3=$3000x=$3000/（1.07）^3=$2448.89

2.Calculatethepresentvalueat10%of$1300receivedtwoyearsfromnow.Ifthatisgreaterthan$1000,youarebetteroffwiththe$1300tobereceivedintwoyears.Ifitspresentvalueislessthat$1000,youbetteroffwith$1000now.$1300/（1.10）^2=$1074.38

Therefore,youarebetteroffreceiving$1300twoyearsfromnow.

Anotherwaytodothisproblemistotakethefuturevalueat10%of$1000.Attheendoftwoyears,the$1000wouldcompoundu