Solution Manual For Intermediate Accounting, 11th
Edition
by David Spiceland, Mark Nelson, Wayne Thomas, Jennifer
,TABLE OF CONTENTS
Section 1: The Role of Accounting as an Information System
Chapter 1: Environment and Theoretical Structure of Financial
Accounting
Chapter 2: Review of the Accounting Process
Chapter 3: The Balance Sheet and Financial Disclosures
Chapter 4: The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
Chapter 5: Time Value of Money Concepts
Chapter 6: Revenue Recognition
Section 2: Assets
Chapter 7: Cash and Receivables
Chapter 8: Inventories: Measurement
Chapter 9: Inventories: Additional Issues
Chapter 10: Property, Plant, and Equipment and Intangible Assets:
Acquisition
Chapter 11: Property, Plant, and Equipment and Intangible Assets:
Utilization and Disposition
Chapter 12: Investments
Section 3: Liabilities and Shareholders’ Equity
Chapter 13: Current Liabilities and Contingencies
Chapter 14: Bonds and Long-Term Notes
Chapter 15: Leases
Chapter 16: Accounting for Income Taxes
Chapter 17: Pensions and Other Postretirement Benefits
Chapter 18: Shareholders’ Equity
Section 4: Additional Financial Reporting Issues
Chapter 19: Share-Based Compensation and Earnings per Share
Chapter 20: Accounting Changes and Error Corrections
Chapter 21: The Statement of Cash Flows Revisited
,Chapter 1 Environment and Theoretical Structure of
Financial Accounting
Question 1–1
Financial accounting is concerned with providing relevant financial
information
about various kinds of organizations to different types of external users.
The primary
focus of financial accounting is on the financial information provided by
profit-
oriented companies to their present and potential investors and
creditors.
Question 1–2
Resources are efficiently allocated if they are given to enterprises that
will use
them to provide goods and services desired by society and not to
enterprises that will
waste them. The capital markets are the mechanism that fosters this
efficient
allocation of resources.
Question 1–3
Two extremely important variables that must be considered in any
investment
decision are the expected rate of return and the uncertainty or risk of
that expected
return.
Question 1–4
In the long run, a company will be able to provide investors and
creditors with a
rate of return only if it can generate a profit. That is, it must be able to
use the
resources provided to it to generate cash receipts from selling a product
, or service that
exceed the cash disbursements necessary to provide that product or
service.
Question 1–5
The primary objective of financial accounting is to provide investors and
creditors with information that will help them make investment and
credit decisions.
Question 1–6
Net operating cash flows are the difference between cash receipts and
cash
disbursements during a period of time from transactions related to
providing goods
and services to customers. Net operating cash flows may not be a good
indicator of
future cash flows because, by ignoring uncompleted transactions, they
may not match
the accomplishments and sacrifices of the period.
Question 1–7
GAAP (generally accepted accounting principles) are a dynamic set of
both
broad and specific guidelines that a company should follow in
measuring and
reporting the information in their financial statements and related
notes. It is
important that all companies follow GAAP so that investors can
compare financial
information across companies to make their resource allocation
Edition
by David Spiceland, Mark Nelson, Wayne Thomas, Jennifer
,TABLE OF CONTENTS
Section 1: The Role of Accounting as an Information System
Chapter 1: Environment and Theoretical Structure of Financial
Accounting
Chapter 2: Review of the Accounting Process
Chapter 3: The Balance Sheet and Financial Disclosures
Chapter 4: The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
Chapter 5: Time Value of Money Concepts
Chapter 6: Revenue Recognition
Section 2: Assets
Chapter 7: Cash and Receivables
Chapter 8: Inventories: Measurement
Chapter 9: Inventories: Additional Issues
Chapter 10: Property, Plant, and Equipment and Intangible Assets:
Acquisition
Chapter 11: Property, Plant, and Equipment and Intangible Assets:
Utilization and Disposition
Chapter 12: Investments
Section 3: Liabilities and Shareholders’ Equity
Chapter 13: Current Liabilities and Contingencies
Chapter 14: Bonds and Long-Term Notes
Chapter 15: Leases
Chapter 16: Accounting for Income Taxes
Chapter 17: Pensions and Other Postretirement Benefits
Chapter 18: Shareholders’ Equity
Section 4: Additional Financial Reporting Issues
Chapter 19: Share-Based Compensation and Earnings per Share
Chapter 20: Accounting Changes and Error Corrections
Chapter 21: The Statement of Cash Flows Revisited
,Chapter 1 Environment and Theoretical Structure of
Financial Accounting
Question 1–1
Financial accounting is concerned with providing relevant financial
information
about various kinds of organizations to different types of external users.
The primary
focus of financial accounting is on the financial information provided by
profit-
oriented companies to their present and potential investors and
creditors.
Question 1–2
Resources are efficiently allocated if they are given to enterprises that
will use
them to provide goods and services desired by society and not to
enterprises that will
waste them. The capital markets are the mechanism that fosters this
efficient
allocation of resources.
Question 1–3
Two extremely important variables that must be considered in any
investment
decision are the expected rate of return and the uncertainty or risk of
that expected
return.
Question 1–4
In the long run, a company will be able to provide investors and
creditors with a
rate of return only if it can generate a profit. That is, it must be able to
use the
resources provided to it to generate cash receipts from selling a product
, or service that
exceed the cash disbursements necessary to provide that product or
service.
Question 1–5
The primary objective of financial accounting is to provide investors and
creditors with information that will help them make investment and
credit decisions.
Question 1–6
Net operating cash flows are the difference between cash receipts and
cash
disbursements during a period of time from transactions related to
providing goods
and services to customers. Net operating cash flows may not be a good
indicator of
future cash flows because, by ignoring uncompleted transactions, they
may not match
the accomplishments and sacrifices of the period.
Question 1–7
GAAP (generally accepted accounting principles) are a dynamic set of
both
broad and specific guidelines that a company should follow in
measuring and
reporting the information in their financial statements and related
notes. It is
important that all companies follow GAAP so that investors can
compare financial
information across companies to make their resource allocation
