These suggested answers are for the end of chapter questions that appear in black in the book. Answers to questions in blue are in the appendix section of the book for students to access.
Chapter 1: Discussion Answers
The answers below provide some outline points for discussion.
|A1||See Book Appendix for Answer.|
|A2||These are innumerable! However, below are some common decisions.
|A3||See Book Appendix for Answer.|
|A4||Accounting operates within society. It, therefore, changes as society changes. To take two examples:
(a) In medieval times, accounting was all about keeping track of resources, such as livestock, grain or money. Shareholders and limited companies did not exist. Today, shareholders own companies while managers run them. Shareholders, therefore, need reports on how the companies are performing. Profit has become more important as it helps to determine the dividends (i.e., cash payments) that shareholders will receive. Consequently, keeping track of assets has become less important.