financial accounting solution chap 02
CHAPTER 2
A Further Look at Financial Statements
Study Objectives
1. Identify sections of a classified balance sheet.
2. Identify and compute ratios for analyzing a company’s profitability.
3. Explain the relationship between a retained earnings statement and a statement of stockholders’ equity.
4. Identify and compute ratios for analyzing a company’s liquidity and solvency using a balance sheet.
5. Use the statement of cash flows to evaluate solvency.
6. Explain the meaning of generally accepted accounting principles.
7. Discuss financial reporting concepts.
Summary of Questions by Study Objectives and Bloom’s Taxonomy
Item
SO
BT
Item
SO
BT
Item
SO
BT
Item
SO
BT
Item
SO
BT
Questions
1.
1
K 6.
2, 4, 5
C
10.
4, 5
K
14.
7
C
18.
7
K
2.
1
K 7.
2, 4, 5
K
11.
2, 4, 5
C
15.
7
C
19.
7
C
3.
1
C 8.
4
C
12.
6
K
16.
7
C
20.
7
C
4.
1
C 9.
4, 5
C
13.
6, 7
K
17.
6
C
21.
1
C
5.
1
K
Brief Exercises 1.
1
K 4.
3
K 7.
6
K 9.
7
K
11.
7
K
2.
1
AP 5.
4
AP 8.
7
K
10.
7
K
12.
7
K 3.
2
AP 6.
4, 5
AP
Do It! Review Exercises 1.
1
AP 2.
1
AP 3.
4, 5
K
4.
7
K
Exercises 1.
1
AP 4.
1
AP 7.
2
AP
10.
4
AP
12.
7
K 2.
1
AP 5.
1
AP 8.
1, 3, 4
AP
11.
4, 5
AP
13.
7
C 3.
1
AP 6.
1
AP 9.
4
AP
Problems: Set A 1.
1
AP 3.
1, 3
AP
5.
2, 4,
5
AP 7.
2, 4,
5
AP 8.
6, 7
E
2.
1, 3
AP
4.
2, 4,
5
AN 6.
2, 4,
5
AP
Problems: Set B 1.
1
AP 3.
1, 3
AP
5.
2, 4,
5
AP 7.
2, 4,
5
AP 8.
6, 7
E
2.
1, 3
AP
4.
2, 4,
5
AN 6.
2, 4,
5
AP
ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number
Description
Difficulty
Level
Time
Allotted (min.)
1A
Prepare a classified balance sheet.
Simple
10–20
A Further Look at Financial Statements
Study Objectives
1. Identify sections of a classified balance sheet.
2. Identify and compute ratios for analyzing a company’s profitability.
3. Explain the relationship between a retained earnings statement and a statement of stockholders’ equity.
4. Identify and compute ratios for analyzing a company’s liquidity and solvency using a balance sheet.
5. Use the statement of cash flows to evaluate solvency.
6. Explain the meaning of generally accepted accounting principles.
7. Discuss financial reporting concepts.
Summary of Questions by Study Objectives and Bloom’s Taxonomy
Item
SO
BT
Item
SO
BT
Item
SO
BT
Item
SO
BT
Item
SO
BT
Questions
1.
1
K 6.
2, 4, 5
C
10.
4, 5
K
14.
7
C
18.
7
K
2.
1
K 7.
2, 4, 5
K
11.
2, 4, 5
C
15.
7
C
19.
7
C
3.
1
C 8.
4
C
12.
6
K
16.
7
C
20.
7
C
4.
1
C 9.
4, 5
C
13.
6, 7
K
17.
6
C
21.
1
C
5.
1
K
Brief Exercises 1.
1
K 4.
3
K 7.
6
K 9.
7
K
11.
7
K
2.
1
AP 5.
4
AP 8.
7
K
10.
7
K
12.
7
K 3.
2
AP 6.
4, 5
AP
Do It! Review Exercises 1.
1
AP 2.
1
AP 3.
4, 5
K
4.
7
K
Exercises 1.
1
AP 4.
1
AP 7.
2
AP
10.
4
AP
12.
7
K 2.
1
AP 5.
1
AP 8.
1, 3, 4
AP
11.
4, 5
AP
13.
7
C 3.
1
AP 6.
1
AP 9.
4
AP
Problems: Set A 1.
1
AP 3.
1, 3
AP
5.
2, 4,
5
AP 7.
2, 4,
5
AP 8.
6, 7
E
2.
1, 3
AP
4.
2, 4,
5
AN 6.
2, 4,
5
AP
Problems: Set B 1.
1
AP 3.
1, 3
AP
5.
2, 4,
5
AP 7.
2, 4,
5
AP 8.
6, 7
E
2.
1, 3
AP
4.
2, 4,
5
AN 6.
2, 4,
5
AP
ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number
Description
Difficulty
Level
Time
Allotted (min.)
1A
Prepare a classified balance sheet.
Simple
10–20