Solution Manual For Financial Accounting,
h h h h
h 7th Canadian Edition by Libby, Hodge,
h h h h h
h Kanaan, Sterling Chapters 1 - 13, Complete
h h h h h h
1-1
,TABLE OF CONTENTS h h h
CHAPTER hONE
Financial hStatements hand hBusiness hDecisions
CHAPTER hTWO
Investing hand hFinancing hDecisions hand hthe hAccounting hSystem
CHAPTER hTHREE
Operating hDecisions hand hthe hAccounting hSystem
CHAPTER hFOUR
Adjustments, hFinancial hStatements, hand hthe hClosing hProcess
CHAPTER hFIVE
Reporting hand hInterpreting hSales hRevenue, hReceivables, hand hCash
CHAPTER hSIX
Reporting hand hInterpreting hCost hof hSales hand hInventory
CHAPTER hSEVEN
Reporting hand hInterpreting hLong-Lived hAssets
CHAPTER hEIGHT
Reporting hand hInterpreting hCurrent hLiabilities
CHAPTER hNINE
Reporting hand hInterpreting hNon-current hLiabilities
CHAPTER hTEN
Reporting hand hInterpreting hShareholders' hEquity
CHAPTER hELEVEN
Statement hof hCash hFlows
CHAPTER hTWELVE
Communicating hAccounting hInformation hand hAnalyzing hFinancial hStatements
CHAPTER hTHIRTEEN
Reporting hand hInterpreting hInvestments hin hOther hCorporations
1-2
,CHAPTER ONE h
Financial Statements and Business Decisions
h h h h
ANSWERS TO QUESTIONS
h h
1. Accounting his ha hsystem hthat hcollects hand hprocesses h(analyzes, hmeasures, hand
hrecords) hfinancial hinformation habout han horganization hand hreports hthat hinformation
htoh
decision hmakers.
2. Financial haccounting hinvolves hpreparation hof hthe hfour hbasic hfinancial hstatements
handhrelated hdisclosures hfor hexternal hdecision hmakers. hManagerial haccounting
hinvolves hthe hpreparation hof hdetailed hplans, hbudgets, hforecasts, hand hperformance
hreports hfor hinternal hdecision hmakers.
3. Financial hreports hare hused hby hboth hinternal hand hexternal hgroups hand hindividuals.
hThehinternal hgroups hare hcomprised hof hthe hvarious hmanagers hof hthe hentity. hThe
hexternal hgroups hinclude hthe howners, hinvestors, hcreditors, hgovernmental hagencies,
hother hinterested hparties, hand hthe hpublic hat hlarge.
4. Investors hpurchase hall hor hpart hof ha hbusiness hand hhope hto hgain hby hreceiving hpart hof
hwhat hthe hcompany hearns hand/or hselling hthe hcompany hin hthe hfuture hat ha hhigher
hprice hthan hthey hpaid. hCreditors hlend hmoney hto ha hcompany hfor ha hspecific hlength hof
htime handhhope hto hgain hby hcharging hinterest hon hthe hloan.
5. In ha hsociety heach horganization hcan hbe hdefined has ha hseparate haccounting hentity. hAn
haccounting hentity his hthe horganization hfor hwhich hfinancial hdata hare hto hbe hcollected.
hTypical haccounting hentities hare ha hbusiness, ha hchurch, ha hgovernmental hunit, ha
huniversity hand hother hnonprofit horganizations hsuch has ha hhospital hand ha hwelfare
horganization. hA hbusiness htypically his hdefined hand htreated has ha hseparate h entity
hbecause hthe howners, hcreditors, hinvestors, hand hother hinterested hparties hneed hto
hevaluate hits hperformance hand hits hpotential hseparately hfrom hother hentities hand hfrom
hitsh
owners.
1-3
, 6. Name hof hStatement Alternative hTitle
(a) Income hStatement (a) h Statement hof hEarnings; hStatement hof
Income; hStatement hof hOperations
(b) Balance hSheet (b) hStatement hof hFinancial hPosition
(c) Audit hReport (c) h Report hof hIndependent hAccountants
1-4
h h h h
h 7th Canadian Edition by Libby, Hodge,
h h h h h
h Kanaan, Sterling Chapters 1 - 13, Complete
h h h h h h
1-1
,TABLE OF CONTENTS h h h
CHAPTER hONE
Financial hStatements hand hBusiness hDecisions
CHAPTER hTWO
Investing hand hFinancing hDecisions hand hthe hAccounting hSystem
CHAPTER hTHREE
Operating hDecisions hand hthe hAccounting hSystem
CHAPTER hFOUR
Adjustments, hFinancial hStatements, hand hthe hClosing hProcess
CHAPTER hFIVE
Reporting hand hInterpreting hSales hRevenue, hReceivables, hand hCash
CHAPTER hSIX
Reporting hand hInterpreting hCost hof hSales hand hInventory
CHAPTER hSEVEN
Reporting hand hInterpreting hLong-Lived hAssets
CHAPTER hEIGHT
Reporting hand hInterpreting hCurrent hLiabilities
CHAPTER hNINE
Reporting hand hInterpreting hNon-current hLiabilities
CHAPTER hTEN
Reporting hand hInterpreting hShareholders' hEquity
CHAPTER hELEVEN
Statement hof hCash hFlows
CHAPTER hTWELVE
Communicating hAccounting hInformation hand hAnalyzing hFinancial hStatements
CHAPTER hTHIRTEEN
Reporting hand hInterpreting hInvestments hin hOther hCorporations
1-2
,CHAPTER ONE h
Financial Statements and Business Decisions
h h h h
ANSWERS TO QUESTIONS
h h
1. Accounting his ha hsystem hthat hcollects hand hprocesses h(analyzes, hmeasures, hand
hrecords) hfinancial hinformation habout han horganization hand hreports hthat hinformation
htoh
decision hmakers.
2. Financial haccounting hinvolves hpreparation hof hthe hfour hbasic hfinancial hstatements
handhrelated hdisclosures hfor hexternal hdecision hmakers. hManagerial haccounting
hinvolves hthe hpreparation hof hdetailed hplans, hbudgets, hforecasts, hand hperformance
hreports hfor hinternal hdecision hmakers.
3. Financial hreports hare hused hby hboth hinternal hand hexternal hgroups hand hindividuals.
hThehinternal hgroups hare hcomprised hof hthe hvarious hmanagers hof hthe hentity. hThe
hexternal hgroups hinclude hthe howners, hinvestors, hcreditors, hgovernmental hagencies,
hother hinterested hparties, hand hthe hpublic hat hlarge.
4. Investors hpurchase hall hor hpart hof ha hbusiness hand hhope hto hgain hby hreceiving hpart hof
hwhat hthe hcompany hearns hand/or hselling hthe hcompany hin hthe hfuture hat ha hhigher
hprice hthan hthey hpaid. hCreditors hlend hmoney hto ha hcompany hfor ha hspecific hlength hof
htime handhhope hto hgain hby hcharging hinterest hon hthe hloan.
5. In ha hsociety heach horganization hcan hbe hdefined has ha hseparate haccounting hentity. hAn
haccounting hentity his hthe horganization hfor hwhich hfinancial hdata hare hto hbe hcollected.
hTypical haccounting hentities hare ha hbusiness, ha hchurch, ha hgovernmental hunit, ha
huniversity hand hother hnonprofit horganizations hsuch has ha hhospital hand ha hwelfare
horganization. hA hbusiness htypically his hdefined hand htreated has ha hseparate h entity
hbecause hthe howners, hcreditors, hinvestors, hand hother hinterested hparties hneed hto
hevaluate hits hperformance hand hits hpotential hseparately hfrom hother hentities hand hfrom
hitsh
owners.
1-3
, 6. Name hof hStatement Alternative hTitle
(a) Income hStatement (a) h Statement hof hEarnings; hStatement hof
Income; hStatement hof hOperations
(b) Balance hSheet (b) hStatement hof hFinancial hPosition
(c) Audit hReport (c) h Report hof hIndependent hAccountants
1-4
