Keys to the Exercises

Chapter 1

1.(1)A　(2)　B(3)C

2.(1)F　(2)　F(3)T

3.(1)会计主体

(2)持续经营

(3)会计分期

(4)收入实现原则

(5)可比性

(6)及时性

(7)权责发生制

(8)谨慎性

(9)收益性支出与资本性支出

(10)客观性

(11)相关性

(12)一致性

(13)完全披露

(14)配比

(15)历史成本

(16)重要性

Chapter 2Section 1

1.(1)Assets—things of value or property owned by an economic entity

(2)Liabilities—amounts owed to creditors

(3)Owner's Equity—owner's claim，investment，net worth

(4)Revenues—amount of assets that a business gains(earns)from its operations

(5)Expenses—amounts of assets that a business uses up as a result of its operations

(6)Income—the amount by which revenues exceed expenses 2.

Chapter 2Section 2

1.

2.

(a)The cost assigned to the asset is$17，131.This cost is determined based on the cost principle.The cost assigned to an asset includes the purchase price，transportation costs，and installation costs，as well as any other costs necessary to place the asset in use.

(b)The new automobile is recorded at the cost of$17，131 regardless of the offer made for it.

(c)Although the business is owned by the proprietor，his rights to the assets extend only to the dollar value of his investment.The asset automobile belongs to the business;it is not the proprietor's personal asset.

3.

The cost principle still applies.The asset is recorded on the books of Mr.Glenn's business at$150，000.

Chapter 3Section 1

1.

(a)Debit.

(b)Credit.

(c)Debit(left side).

(d)Debit.Increases in assets are shown on the same side as the beginning balances.

(e)Credit(right side).

(f)Increases in liability and/or permanent capital are added on the same side as the beginning balances.

(g)Decreases are shown on the side opposite the beginning balances.Thus，a decrease in an asset is credited.To show a decrease in a liability or permanent capital，the account is debited.

(h)A“Balance”in an account represents the dollar value of that particular account at a specific moment in time.

(i)Every business transaction involves a minimum of two changes.The system used to reflect this is known as double-entry accounting.

(j)The account form of the balance sheet indicates the positioning of the various accounts'beginning balances.

(k)Total the debit and credit money columns.If the totals are the same，the account is said to be in balance.If the totals are not the same，then the balance is the excess of the two totals.The normal account balances follow their location on the balance sheet.

2.

(a)T　(b)T　(c)F　(d)T　(e)F　(f)F　(g)T　(h)F

3.

(1)借方

(2)借方余额

(3)资本抽取账户

(4)过账

(5)经济业务

(6)会计科目表

(7)贷方

(8)贷方余额

Chapter 3Section 2

1.

2.

(1)

3.

续表

General Journal　PAGE2

续表

General Journal　PAGE3

4.

5.

General Journal　PAGE4

6.

Chapter 4Section 1

1.

(1)F　Internal control is more complex in a large organization with many employees and great diversity of operations.

(2)T

(3)F　The bank is also a party to the check.

(4)F　The bank record is not reduced until the bank actually receives the check and pays out the face amount.

(5)T

(6)T

(7)T

2.

(1)银行余额调节表

(2)备用金

(3)银行对账单

(4)银行尚未确认的存款

(5)内部控制

(6)凭证

(7)已开出但尚未被兑现的支票

Chapter 4Section 2

1.

2.

ABC Company

Bank Reconciliation

3.

4.

1.

2.

1.

2.

3.

4.

(1)先进先出法

(2)定期盘存制

(3)后进先出法

(4)永续盘存制

(5)加权平均法

Chapter 6Section 2

1.

2.

1.

2.

1.

(1)Since the useful life of the asset is 5 years，each year's depreciation recognized under the straight-line method will be 1/5 of the total depreciation，or 20%.

(2)Subtracting the scrap value of the asset from its total cost gives the depreciable value of the asset.Thus，the depreciable value would be calculated as follows:$7，850－$350=$7，500.

(3)Depreciable Value×Straight-line Rate=Annual Depreciation($7，500 ×20%=$1，500).

(4)Annual Depreciation×3 Years=Total Depreciation for the Period($1，500 ×3－$4，500).

2.

(1)The depreciable value is$15，600－$600=$15，000.

(2)$15，000/15，000 miles=$10 per mile.

(3)Dec.31，200

(23，200 miles×$10)

(4)A credit balance of$6，540

(5)It it is assumed that the total mileage driven was 65，400 miles，the book value of the asset would be:

3.

Original cost of asset:$325，000

Scrap value:0

Useful life:25 years

Annual straight-line depreciation is$325，000/25 years=$13，000.

With this method each of the 2 years'depreciation would amount to$13，000.

(1)The straight-line rate is 4%(1/25)per year.The double-declining!

(2)Balance rate would then be 8%each year on the book value of the asset.

1st year's depreciation=$325，000×8%=$26，000.

2nd year's depreciation=$299，000×8%=$23，920.

(3)The sum of the years'digits fraction is determined as follows:

S=N×(N+l)/2(325=25×(25+1)/2).

1st year's depreciation=$325，000×25/325=$25，000.

2nd year's depreciation=$325，000×24/325=$24，000.

Chapter 8Section 1

1.

(1)D　(2)B　(3)A　(4)A　(5)A　(6)C　(7)B　(8)C

Chapter 8Section 2

1.

2.

3.

4.

Chapter 9

1.

(1)F　(2)T　(3)F　(4)F　(5)T　(6)T　(7)T　(8)F

2.

(1)销售收入

(2)劳务收入

(3)主要业务收入

(4)期间费用

(5)运输费

(6)广告费

Chapter 10Section 1

1.

(1)The income statement.

(2)Revenue and expenses.

(3)Net income.

(4)The account form.

2.

(1)特定的

(2)多步式

(3)流动的

(4)到期日

(5)利息

(6)债权人

(7)财务状况

(8)经营成果

(9)资产负债表

(10)利润表

(11)现金流量表

(12)净收入

(13)净损失

(14)多步式利润表

(15)单步式利润表

(16)商品销售成本

(17)毛利

(18)所得税费用

(19)现金收入

(20)现金支出

(21)现金等价物

(22)经营活动

(23)筹资活动

Chapter 10Section 2

1.

(1)

(2)

(3)

2.

(1)

(2)

(3)

(4)

Chapter 11Section 1

1.

(1)T　(2)F　(3)T　(4)F

2.

Current Ratio　(Ⅲ)

Quick Ratio　(Ⅷ)

Gearing　(Ⅵ)

Times Interest Cover　(Ⅴ)

Divided Cover　(Ⅰ)

Stock Turnover　(Ⅶ)

Average Collection Period　(Ⅱ)

Profit Margin　(Ⅹ)

Return on Total Assets　(Ⅳ)

Return on Owner's Equity　(Ⅸ)

3.

(1)趋势百分比

(2)总资产报酬率

(3)已获利息倍数

(4)存货周转率

(5)应收账款周转率

(6)流动比率

(7)速动比率

(8)酸性试验比率

Chapter 11Section 2

1.

This current ratio indicates that the firm can meet its current，or short-term，obligations because it has twice the amount of cash from liquid assets as it does current liabilities.

2.

(1)

3.

The industry current ratio is better than the firm's indicating that the firm is less liquid than some of its competitors.Nevertheless，a 2.5 ratio indicates a satisfactory level of liquidity.The firm has a lower debt to equity ratio than the industry，indicating an opportunity to issue more debt without incurring too much financial risk，especially since its time-interest earned ratio is 3.0 versus 2.0 for the industry.

The time-interest earned ratio is better than the industry's，probably because of the lower debt to equity ratio.The firm appears to have ample coverage of interest expense and less danger of defaulting than the industry，on average.

The firm's return on total assets is higher than the industry's，indicating that it is making more effective use of available resources or assets.

The firm has a slower inventory turnover rate than the industry，suggesting that it is carrying too much inventory.However，if this extra inventory is helpful in satisfying customer needs and in enabling the firm to charge slightly higher prices，it may be worth the additional investment.