CHAPTER 1
ACCOUNTING: INFORMATION FOR DECISION MAKING
OVERVIEW OF BRIEF EXERCISES, EXERCISES, AND CRITICAL THINKING
CASES
Brief
Exercises
B. Ex. 1.1
B. Ex. 1.2
B. Ex. 1.3
B. Ex. 1.4
B. Ex. 1.5
B. Ex. 1.6
B. Ex. 1.7
B. Ex. 1.8
B. Ex. 1.9
B. Ex. 1.10

Exercises
1.1
1.2

Topic
Users of accounting information
Components of internal control
Inexact or approximate measures
Standards for the preparation of accounting information
FASB conceptual framework
PCAOB
COSO
Professional certifications in accounting
AICPA code of professional conduct
Personal benefits of accounting skills

1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14

Topic
You as a user of accounting information
Real World: Boeing Company,
California Public Employees
Retirement System, China Airlines
Users of accounting information
What is financial reporting?
Generally accepted accounting principles
Accounting organizations
Investment return
Accounting terminology
Accounting organizations
Financial and management accounting
Management accounting information
Accounting organizations
Purpose of an audit
Audits of financial statements
Ethics and professional judgment

1.15
1.16

Careers in accounting
Home Depot, Inc. general information

Learning
Objectives

Skills

1, 3, 5
2, 5
3, 4
5, 6

Analysis
Analysis
Analysis, judgment
Analysis

1, 3, 5, 6
5, 6
2, 5, 6
7, 8
5, 7
1

Analysis
Analysis, research
Analysis, ethics
Analysis
Analysis, ethics
Analysis

Learning
Objectives
Skills
1
Analysis, judgment
3, 4
Analysis, research

3
6
6
3
3-5, 7
6
3, 4
4
6
5
5
7
8
1, 3, 5

© The McGraw-Hill Companies, Inc., 2012
Overview

Analysis, judgment
Analysis
Analysis, communication
Analysis
Analysis
Analysis
Judgment
Communication, judgment
Analysis, judgment
Analysis, judgment
Analysis
Analysis, communication, judgment Judgment, communication
Analysis, judgment, research Due to the introductory nature of this chapter and the conceptual nature of its contents, no items labeled
Problems are included. In all future chapters you will find a series of Problems that generally include computations, are more complex, and generally require more time to complete than Exercises.
Critical Thinking Cases
1.1
Real World: Fannie Mae
Reliability of financial statements
1.2
Objectives of financial accounting
1.3
1.4
1.5

Accounting systems
Codes of ethics (Ethics, fraud, and corporate governance)
Accessing information on the Internet
(Internet)

5

Analysis, ethics, judgment

3

Analysis, communication, group, judgment
Analysis, communication
Analysis, communication, judgment Research, technology

2
7
6, 7

© The McGraw-Hill Companies, Inc., 2012
Overview

DESCRIPTIONS OF CRITICAL THINKING CASES
Below are brief descriptions of each case. These descriptions are accompanied by the estimated time (in minutes) required for completion and by a difficulty rating.

Critical Thinking Cases
1.1

Fannie Mae
15 Easy
Reliability of Financial Statements
This case explores the general subject of integrity in financial statements—what causes potential investors to be able to rely on information and what precludes management from portraying a company in more positive terms than it should.

1.2

Objectives of Financial Accounting
Characteristics of accounting and accounting information (e.g., useful for decision making, language of business) are used to explain the importance of accounting information.

15 Medium

1.3

Accounting Systems
The purpose and functions of accounting systems are covered, as well as the definition of what an accounting system is and who is responsible for designing and implementing accounting systems.

15 Easy

1.4

Codes of Ethics
30 Medium
Ethics, Fraud, and Corporate Governance
Students are placed in the position of a new employee who is faced with the challenge of