We should file our federal income taxes by April 15; for our state taxes we can request an
extension.
We should file our federal income taxes by April 15, but for our state taxes we can
request an extension.
We should file our federal income taxes by April 15; however, for our state taxes we can
request an extension.
We should file our federal income taxes by April 15 and request an extension for our
state taxes.
Exercise 5-2
NOTE: Some of the following errors can be corrected in more than one way. However, this
key will give only one possible correction. If your students recognize the error, they
probably understand how to correct it.
1. Comma splice. Revision:
The accounting department had added several new employees; thus, we had a training
session.
2. Incorrect punctuation. (Therefore doesn’t come between two independent clauses.)
Revision:
To improve our profits, therefore, we reduced expenses.
3. Correct.
4. Fused sentence. Revision:
Tax season is our busiest time of the year, so everyone works long hours.
5. Correct. (The first clause is dependent.)
6. Fragment. Revision:
However, the new equipment has improved our rate of production.
7. Fragment. Revision:
The reason for our poor profit performance is that the market is saturated.
8. Common splice. Correction:
Accountants write many letters as part of their professional responsibilities. For example,
they may write letters to the IRS.
9. Correct. (Thus doesn’t come between two independent clauses.)
10. Correct. (The first clause⎯“although we increased our advertising”⎯is not independent;
it could not stand alone as a sentence.)
Exercise 5−3
1. Problems with implementing the new inventory system have frustrated everyone. (The
verb should agree with the subject problems.)
2. If we hired a consultant, we would be able to design a new system.
or
If we hire a consultant, we will be able to design a new system.
3. Correct.
4. One problem we found in our reviews of the records was that revenues were not always
recorded in the proper period. (The verb should agree with problem.)
5. A statement with supplementary disclosures provides additional information to investors.
(The verb should agree with statement.)
6. The physical flow of goods generally follows the FIFO pattern. (The verb should agree
with flow.)
7. Correct.
8. We will review the client’s system of internal control. Then we will recommend ways to
improve it.
9. The future benefits provided by the bond are partly due to its high interest rate. (The verb
should agree with benefits.)
10. Correct.
Exercise 5−4
1. When investors or creditors wish to compare two companies, they review the companies’
financial statements.
2. Hamilton Exports, Inc., increased its advertising this year.
3. Correct.
4. Management is interested in improving the revenue figures for its report to the
stockholders.
5. All accountants are required to complete their reports on time.
6. The Smallwood Corporation has greatly increased its advertising expense.
7. A switch to LIFO usually results in a lower income tax liability and a lower inventory
figure on the balance sheet; these advantages would be important to our company.
8. Correct.
9. Every corporation coming under SEC regulations must follow certain procedures in
preparing its financial statements.
10. Everyone registering for the convention will receive a package of information when he or
she arrives.
or
All registrants for the convention will receive a package of information when they arrive.
Exercise 5−5
The hiring decision will be based on three criteria: work experience, education, and
communication skills.
(The original sentence combined a noun phrase, a noun, and a clause.)
Exercise 5−6
Singular
a. Singular Possessive Plural Possessive
statement statement’s statements statements’
company company’s companies companies’
business business’s businesses businesses’
cost cost’s costs costs’
risk risk’s risks risks’
CPA CPA’s CPAs or CPA’s CPAs’
year year’s years years’
industry industry’s industries industries’
b.
1. CPAs (or CPA’s)
2. business’s
3. costs
4. statements
5. cost
6. risks
7. industries
8. years’
9. company’s
10. statements’
Exercise 5−7
1. The Board of Directors met December 12, 2014, in Charlotte, North Carolina.
2. To increase the revenues from its new product, the company introduced an advertising
campaign in New York, Chicago, and Los Angeles.
3. The biggest problem in our firm, however, is obsolete inventories.
4. The firm hired two new auditors. Thus, the work will be finished on time.
5. For example, Elixir Products should consider FASB Accounting Standards Codification®
Topic 840, which deals with leases.
6. The auditors revealed several problems in Thompson Company’s financial records, such
as its depreciation policy, its handling of bad debts, and its inventory accounting.
7. The president’s letter contained the following warning: “If our revenues don’t increase
soon, the plant may be forced to close.”
8. “We’re planning a new sales strategy,” the manager wrote in reply.
9. We have decided not to invest in the Allied bonds at this time. Instead we are considering
Blackstone’s common stocks. (Alternative: We have decided not to invest in the Allied
bonds at this time; instead, we are considering Blackstone’s common stocks.)
10. Although our revenues increased during June, expenses rose at an alarming rate.
Exercise 5−8
1. correct 5. accrual 9. costs 13. their
2. receive 6. advise 10. misled 14. interest
3. occurred 7. existence 11. advice 15. trial balance
4. separate 8. correct 12. correct
Exercise 5−9
1. Punctuation needed. The letter was dated May 8, 2014, and mailed from Boston,
Massachusetts.
2. Lack of parallel structure. The guidelines will explain eligibility for the benefits, costs, and
the application procedure.
3. Fused sentence. We have increased our advertising. Thus, we hope to sell more of our
product.
4. Punctuation needed. The report was signed by the controller, the internal auditor, and the
vice president.
5. Subject-verb agreement. Neither Susan nor Lisa is on the committee.
6. Apostrophe error. This is the employees’ parking lot.
7. Subject-verb agreement. Either the computers or the printer is malfunctioning.
8. Subject-verb agreement. The benefits of this health insurance policy are obvious to
employees. (The verb should agree with benefits.)
9. Tense shift. We will review the client’s system of internal controls. Then we will
recommend ways to improve it. (The original sentence contained a tense shift from present
to future.)
10. Ambiguous pronoun reference. Three new procedures were used to improve the internal
control system. These procedures were the responsibility of Hugh Tran.
or
Three new procedures were used to improve the internal control system. Hugh Tran is
responsible for internal control.
Exercise 5−10
Students will suggest a variety of revisions, and discussion of their choices should be beneficial
as a class exercise. Problems include formatting and paragraph length, an inappropriate courtesy
title (“Miss”), unprofessional opening sentence, wordiness, numerous grammatical and
punctuation errors, and inappropriate tone. Some students may observe that the memo writer
appears to have shifted responsibility for a task originally assigned him onto another person.
Below is one possible revision to the memo.
To: Elaine Jacobs
From: Jonathan Brooks
Subject: Banquet for Veteran Employees
Date: March 12, 2014
Out Human Resources Department has asked me to organize a banquet for employees who
have been with our firm ten years or more, and I’d like to ask you to chair a committee that
will be responsible for the banquet arrangements.
We plan to schedule the event for May 8, which we know will be a convenient time for most
people. All the honorees have already agreed that the date will work with their schedules.
Since you have experience in setting up events for our department, we hope you will make
arrangements with the caterer, the florist, and the printer for the program. Costs of these
items will be covered by the Human Resources Department.
In the past, we gave gifts to the honorees so that they would receive a tangible reward for
their service. Please coordinate with Human Resources about the amount of money we can
spend on each gift. We want to ensure that all honorees realize how much the firm
appreciates their service.
Please let me know if you will be able to assume responsibility for the banquet, as well as
the names of other people who might be willing to work on your committee. I appreciate
your willingness to help.
CHAPTER 6 FORMAT FOR CLARITY:
DOCUMENT DESIGN
Chapter Objectives
The objectives of this chapter are to
• Explain the importance of effective document design.
• Illustrate techniques of document design that will make documents more attractive,
more professional, and easier to read: paper and print, white space, headings, set-off
lists, and graphic illustrations.
• Discuss the advantages of using a computer to design documents.
Teaching Tips
To teach the principles of document design, you can
• Collect examples of effective (and ineffective) document design to share with your
class. Alternatively, ask the students to look for examples.
• Select papers from your classes that illustrate effective document design. With the
writers’ permission, make class sets or transparencies to show your students.
• When you evaluate or review your students’ papers, suggest to individual students
ways they can improve the design of their papers. You might suggest the use of
descriptive headings, set-off lists, or improved use of white space.
Troubleshooting
You could encounter these potential problems when teaching the concepts covered in this
chapter:
• Some students may be unfamiliar with headings or set-off lists.
If they study the sample documents in Effective Writing, as well as the examples you
provide in class, they will see how these techniques can be used to advantage.
• For headings, encourage the students to use words that will suggest the content of the
following section in concrete, specific terms. They may tend to use generic headings
like “First Alternative,” and “Second Alternative” rather than descriptive wording
like “FIFO” and “LIFO.” Headings should also be grammatically parallel, as
discussed in Chapter 5.
The reader should gain some idea of a document’s contents from scanning the
headings.
• With lists, remind the students to use parallel grammatical structure, as discussed in
Chapter 5.
Masters to Use with This Chapter
Sample Memo1 Page 104
Sample Letter2 Page 105
Answers to Exercises
Exercises 6−1 through 6−11
Self-explanatory⎯answers will vary.
1Billie L. Sanders, “Memo to Partner” (unpublished student paper, University of Georgia, 1991).
2Billie L. Sanders, “Letter to Client” (unpublished student paper, University of Georgia, 1991).
CHAPTER 7 CRITICAL THINKING
Chapter Objectives
The objectives of this chapter are to
• Show students the importance of critical thinking in what the write, say, read, and hear.
• Guide students through the process of constructing a valid, convincing argument.
• Introduce students to inductive and deductive logic.
• Help students identify and avoid fallacies in thinking and writing.
Teaching Tips
• Bring to class examples you find of effective and ineffective arguments , including
arguments with fallacies. You may find examples of both in editorials and advertisements in
the print media, as well as talk shows, commercials, and other programming on television or
radio, as well as the Internet.
• Give assignments that will encourage students to look at the issues from more than one point
of view. These assignments may include problems with more than one defensible solution, or
issues that include possible gray areas. Assignments involving ethical issues might work well
for this type of assignment.
• When students are researching and defending an argument for an assignment or class
discussion, tell them that you will play the role of “Devil’s Advocate.” Emphasize that you
are taking this role to help them identify counterarguments and avoid fallacies.
Trouble Shooting
Potential problems teaching this chapter:
• Some students have trouble evaluating the credibility and reliability of information
sources. This problem is especially acute when they research their arguments through
the internet. Emphasize to them that they should identify and evaluate the credentials
and possible biases of the person or organization responsible for the site or printed
matter.
• For controversial issues, some students may not realize the importance of researching
an issue from all reasonable points of view. Teach them to investigate the issues with
an open mind, and consider all sides when determining and then defending their own
position on the issues.
• Sometimes students don’t understand the importance of discussing counterarguments
in an argument. They may believe that including the opposing views may weaken
their own argument. Stress that including counterarguments, and responding to them,
will make the writer of an argument seem fair, honest, and informed.
• Occasionally, you may find students who cannot separate their emotional
involvement in an issue from a rational defense of a position. You can point out to
these students that they will have a more convincing argument if they analyze the
issues rationally and present their argument without an appeal to emotion or other
fallacy, including loaded language.
Masters to Use with This Chapter
Planning a Paper Page 97
Audience Analysis Page 98
Coherent Organization Page 99
Answers to Exercises
Exercise 7−1
1. Post hoc fallacy.
2. Slippery slope
3. Either/or (false dilemma) fallacy.
4. Ad hominem and loaded language.
5. False authority. What is the origin of this statistic?
6. False authority and hasty generalization.
7. Appeal to tradition.
8. Appeal to emotion (prejudice), loaded language, ad hominem.
Exercises 7−2 through 7−12
Self-explanatory ⎯ answers will vary.
CHAPTER 8 ACCOUNTING RESEARCH
Chapter Objectives
The objectives of this chapter are to
• Review the methodology of accounting research: planning a paper, locating sources,
taking notes, organizing material, drafting, and revising.
• Review steps in the accounting research process: determining relevant facts,
identifying issues, researching accounting literature, identifying alternative solutions
and arguments, evaluating alternative solutions, and communicating results.
• Discuss direct quotation, paraphrasing, plagiarism, and the importance of documenting
sources.
• Illustrate two documentation styles: internal documentation and endnotes.
• Illustrate sample citations for commonly used accounting sources.
• Give students an opportunity to write a documented research paper.
Teaching Tips
• Assign a research project that your students will write in a typical business format,
such as a memo or formal report. Writing a business document will enable your
students to practice the principles of business writing, such as analysis of purpose and
audience. They should thus review Chapters 1−7 of Effective Writing as part of the
preparation for writing this paper.
• You can assign an accounting research project to reinforce instruction on authoritative
accounting pronouncements. In a financial accounting course, for example, you could
assign a topic that would require students to become familiar with the FASB
Accounting Standards CodificationTM.
• Many of the writing assignments in Effective Writing involve accounting research. As
an alternative to using these assignments, you can design your own to reinforce your
course content.
Troubleshooting
Potential problems teaching this chapter:
• Most students should have had experience with research long before they reached your
course, in secondary school if not college courses taken previously. However, the
quality of their instruction will have varied, and some of them may have forgotten
much of what they learned.
• How much time and attention you devote to teaching the concepts covered in this
chapter will depend on the needs of your students. You may decide that you can work
individually with students who have a weak background in research, or you may
decide to work with the class as a whole.
• Unintentional plagiarism may be a problem with some students if they are unfamiliar
with the rules for direct quotation, paraphrasing, and documentation of sources.
The section of Chapter 8 that discusses documentation and paraphrasing should help
these students.
• Few, if any, students will have had experience with the accounting research process.
Determining what the important issues and facts are can be difficult for many students
who have, up to this point, always been told what they are and asked merely to come
up with a solution.
Assigning students to groups of three or four and giving them time to discuss the
issues and facts before holding a class discussion can be a very productive way of
addressing this problem.
Masters to Use with This Chapter
Planning a Paper Page 97
\
Audience Analysis Page 98
Coherent Organization Page 99
Peer Review Process Pages 109-113
Answers to Exercises
Exercises 8−1 through 8−3
Self-explanatory⎯answers will vary.
Exercise 8−4
Although answers will vary, some of the points students should cover are:
• Domestic and international legal liability recognition or non-recognition.
• Discretionary liability, i.e., extra liability that the board of directors has decided to
recognize because of ethical or other non-legal reasons.
• Possible going-concern issues.
Exercise 8−5
Although answers will vary, some of the points students should cover are:
• Can stream water qualify as an asset according to FASB’s Concepts Statement No. 6?
Particular focus here should be placed on the requirement of control.
• Regardless of the answer to the question of whether stream water is an asset, the broader
question is whether any asset was acquired for the extra $1 million that was paid. If so,
what is the nature of the asset that was acquired, i.e., land, prepaid marketing expense,
goodwill, or something else? Can it be recorded, and, if so, how? If no recordable asset
was acquired, what gets debited to offset the $1 million credit?
Exercises 8−6 through 8−8
Self-explanatory⎯answers will vary.
CHAPTER 9 LETTERS
Chapter Objectives
The objectives of this chapter are to
• Summarize the principles of business letter writing: analysis of audience and purpose;
coherent organization; concise and clear style; courteous tone; correct form and
attractive appearance.
• Explain and illustrate the parts of a standard business letter.
• Provide guidelines for responding to correspondence.
• Discuss and illustrate typical accounting letters.
• Provide writing assignments that will allow the students to write letters similar to
those they will encounter in practice.
Teaching Tips
When you teach this chapter, you may find these suggestions helpful:
• Teaching this chapter will be easier if you don’t teach it in isolation. Assign the first
six chapters of Effective Writing as preparation for this chapter, and remind the
students to review those chapters as needed. For example, Chapter 2 discusses reader
analysis in much more depth than is possible in this chapter.
• Use the writing assignments at the end of this chapter, or design your own assignments
to reinforce the accounting concepts you are teaching. (See page 21 of this manual for
suggestions on designing assignments.)
• Audience analysis is particularly important for letters, since many of the letters
accountants write in practice are to nonaccountants, such as clients. Remind your
students to analyze their readers’ interests and concerns and to write their letters at an
appropriate technical level and tone.
• Encourage your students to use summary sentences so that readers can easily spot
main ideas:
Conclusions and recommendations should be summarized near the beginning of the
letter, usually as part of the introduction.
Sections should begin with a summary of the main point discussed in that section.
Paragraphs should begin with topic sentences.
• Document design techniques, such as headings and set-off lists, also make main ideas
easy to identify, and the letter easier to read.
• Peer reviews enable students to receive feedback on their letters before they turn them
in for a grade.
• Insist that your students submit final drafts that have a polished, professional
appearance.
Troubleshooting
These problems could occur when you teach this chapter:
• Your students may have trouble organizing their letters in a deductive structure, with
conclusions summarized at the beginning, and sections and paragraphs starting with
summary sentences.
Show them models of students’ papers that are organized effectively, including the use
of summary sentences.
You can also remind them that readers want to know what’s important as quickly and
clearly as possible, without having to read through unnecessary preliminary material.
• A few students may have been taught that personal pronouns (you, we, I, etc.) are
inappropriate for business writing.
Remind them that most documents should be written in a personal, conversational
style, including the use of pronouns.
• If the students have not thought carefully about their readers’ needs and expectations,
they may include too much detail in their letters or write them on a level that is too
technical.
Ask these students to review the section of Chapter 2 that discusses audience analysis.
They should address readers’ concerns explicitly and clearly at a level that the readers
will understand. At the same time, their letters should be as concise as possible.
• A few students will try to write their letters in wording that is too close to the models
in Effective Writing. These models provide good examples of format, organization,
and style, but the students should write their letters in their own words.
Masters to Use with This Chapter
These masters for handouts and slides will help you teach this chapter:
Effective Writing for Accountants Page 95
Guidelines for Letters and Memos Page 106
Sample Memo Page 104
Sample Letter Page 105
Evaluation Masters Pages 114-117
Answers to Exercises
Exercise 9−1
The problems with the letter include these (your students may find more):
• Poorly organized. Negative news is presented first.
• Several instances of substandard English. Examples:
The word “excepted” in the first paragraph is used instead of “accepted.”
“Would of” in the second paragraph is incorrect. The proper phrase is “would
have.”
• “Enclosures” are specified to go with the letter, but none are referred to in the body of
the letter.
What is effective about the letter:
• It is short and to the point. There is no doubt about the message it conveys.
A revised version that would make a better impression on a reader:
Smith, Barnum, and Bailey
Certified Public Accountants
301 MacDonald Place
Atlanta, Georgia 36095
Telephone: (306) 782-5107
Members: American Institute of Certified Public Accountants
May 21, 2014
Mr. John W. Simmons
254 Myers Hall, UGA
Athens, Georgia 30609
Dear John:
I enjoyed talking with you yesterday and believe you would be a positive addition to our firm.
After considerable debate about our needs, however, we decided to offer the internship to
someone else with more coursework in auditing.
We would be most interested in talking with you regarding full-time employment after your
graduation. Please give me a call at that time so we may discuss the possibility further.
In the meantime, best of luck in your studies. I look forward to hearing from you again.
Sincerely,
Jason
Jason A. Smith
JASjr/mlk
Exercises 9−2 through 9−17
Self-explanatory⎯answers will vary. These exercises all present scenarios in which a business
letter is called for.
CHAPTER 10 MEMOS
Chapter Objectives
The objectives of this chapter are to
• Summarize the basic principles of memo writing: analysis of purpose and audience;
coherent organization; concise, clear, and readable style.
• Describe and illustrate the parts of a standard memo.
• Discuss and illustrate the memos that accountants write on the job.
• Provide opportunities for students to practice writing the kinds of memos they will
encounter in practice.
Teaching Tips
Suggestions for teaching this chapter:
• Assign Chapters 1-8 of Effective Writing as preparation for this chapter, and remind
your students to review those chapters as necessary. Some of the writing principles
summarized briefly in this chapter are explained much more thoroughly in earlier
chapters.
• Use the assignments at the end of this chapter, or design your own assignments to
reinforce the concepts you’re teaching in your course. (Pages 21-22 of this manual
discuss how to design writing assignments.)
• Point out to your students the variety of memo formats illustrated within the chapter.
This variety shows the different expectations that various organizations may have
about how memos are to be written.