INTRODUCTION This Solutions Manual is designed to ease your load as instructor of one of the most demanding courses within the accounting curriculum. It includes suggestions for making assignments, answer guides to discussion-type questions, solutions to chapter problems, and suggested solutions to comprehensive cases and problems included on CD-ROM. In addition, a separately bound Instructor’s Resource Guide includes chapter outlines, a test bank, and a selected set of transparency masters. Many of the multiplechoice items in the test bank are similar to those that have appeared on various professional examinations. Certain of the aids in this manual are described below. Chapter Outlines Many instructors’ desire to review each chapter can be aided by outlines of the major points covered by the chapters. Each chapter is outlined in the Instructor’s Resource Guide, and each outline appears on a separate page(s), so that a transparency or handout can be made for use in class. Taxonomy of Educational Objectives: Cognitive Domain The following Bloom’s Taxonomy of educational objectives is used to suggest the level of achievement expected in each of the questions and problems. Although only a rough and somewhat subjective guide, the taxonomy permits a more meaningful selection of assignments based on the course objectives. 5. SYNTHESIS: Ability to hypothesize and resolve complex problems which yield new arrangements or answers. • Hypothesis. Ability to make tentative assumptions in order to draw out or test logical or empirical consequences. • Resolution. Ability to answer complex problems. Descriptive verbs include the following: assumes, projects, formulates, predicts, rationalizes, reconciles, plans, solves, innovates, redefines, and reconstructs. 4. EVALUATION: Ability to analyze and qualify information and data or situations to make a judgement. • Analysis. Ability to breakdown objects or ideas into simpler parts and see how the parts are related or organized. • Qualification. Ability to discern a variance in measuring information against a criterion or standard that ought to be complied with. Descriptive verbs include the following: analyzes, quantifies, breaks down, determines, identifies cause/effects, diagnoses, discriminates, distinguishes, qualifies, and predicts. 3. APPLICATION: Ability to clarify a problem or situation and use appropriate principles and procedures to solve a specific problem or situation. • Clarification. Ability to isolate the elements of a singular problem or situation from its surrounding context (e.g., identification of the relevant and irrelevant elements, and defining the problem).