Solution Manual For Financial Accounting,
k k k k
k 7th Canadian Edition by Libby, Hodge,
k k k k k
k Kanaan, Sterling Chapters 1 - 13, Complete
k k k k k k
1-1
,TABLE OF CONTENTS k k k
CHAPTER kONE
Financial kStatements kand kBusiness kDecisions
CHAPTER kTWO
Investing kand kFinancing kDecisions kand kthe kAccounting kSystem
CHAPTER kTHREE
Operating kDecisions kand kthe kAccounting kSystem
CHAPTER kFOUR
Adjustments, kFinancial kStatements, kand kthe kClosing kProcess
CHAPTER kFIVE
Reporting kand kInterpreting kSales kRevenue, kReceivables, kand kCash
CHAPTER kSIX
Reporting kand kInterpreting kCost kof kSales kand kInventory
CHAPTER kSEVEN
Reporting kand kInterpreting kLong-Lived kAssets
CHAPTER kEIGHT
Reporting kand kInterpreting kCurrent kLiabilities
CHAPTER kNINE
Reporting kand kInterpreting kNon-current kLiabilities
CHAPTER kTEN
Reporting kand kInterpreting kShareholders' kEquity
CHAPTER kELEVEN
Statement kof kCash kFlows
CHAPTER kTWELVE
Communicating kAccounting kInformation kand kAnalyzing kFinancial kStatements
CHAPTER kTHIRTEEN
Reporting kand kInterpreting kInvestments kin kOther kCorporations
1-2
,CHAPTER ONE k
Financial Statements and Business Decisions
k k k k
ANSWERS kTO kQUESTIONS
1. Accounting kis ka ksystem kthat kcollects kand kprocesses k(analyzes, kmeasures, kand
krecords) kfinancial kinformation kabout kan korganization kand kreports kthat
kinformation ktokdecision kmakers.
2. Financial kaccounting kinvolves kpreparation kof kthe kfour kbasic kfinancial kstatements
kandkrelated kdisclosures kfor kexternal kdecision kmakers. kManagerial kaccounting
kinvolves kthe kpreparation kof kdetailed kplans, kbudgets, kforecasts, kand kperformance
kreports kfor kinternal kdecision kmakers.
3. Financial kreports kare kused kby kboth kinternal kand kexternal kgroups kand kindividuals.
kThekinternal kgroups kare kcomprised kof kthe kvarious kmanagers kof kthe kentity. kThe
kexternal kgroups kinclude kthe kowners, kinvestors, kcreditors, kgovernmental kagencies,
kother kinterested kparties, kand kthe kpublic kat klarge.
4. Investors kpurchase kall kor kpart kof ka kbusiness kand khope kto kgain kby kreceiving kpart
kof kwhat kthe kcompany kearns kand/or kselling kthe kcompany kin kthe kfuture kat ka khigher
kprice kthan kthey kpaid. kCreditors klend kmoney kto ka kcompany kfor ka kspecific klength kof
ktime kandkhope kto kgain kby kcharging kinterest kon kthe kloan.
5. In ka ksociety keach korganization kcan kbe kdefined kas ka kseparate kaccounting kentity.
kAn kaccounting kentity kis kthe korganization kfor kwhich kfinancial kdata kare kto kbe
kcollected. kTypical kaccounting kentities kare ka kbusiness, ka kchurch, ka kgovernmental
kunit, ka kuniversity kand kother knonprofit korganizations ksuch kas ka khospital kand ka
kwelfare korganization. kA kbusiness ktypically kis kdefined kand ktreated kas ka kseparate
k entity kbecause kthe kowners, kcreditors, kinvestors, kand kother kinterested kparties
kneed kto kevaluate kits kperformance kand kits kpotential kseparately kfrom kother kentities
kand kfrom kitskowners.
1-3
, 6. Name kof kStatement Alternative kTitle
(a) Income kStatement (a) k Statement kof kEarnings; kStatement kof
Income; kStatement kof kOperations
(b) Balance kSheet (b) kStatement kof kFinancial kPosition
(c) Audit kReport (c) k Report kof kIndependent kAccountants
1-4
k k k k
k 7th Canadian Edition by Libby, Hodge,
k k k k k
k Kanaan, Sterling Chapters 1 - 13, Complete
k k k k k k
1-1
,TABLE OF CONTENTS k k k
CHAPTER kONE
Financial kStatements kand kBusiness kDecisions
CHAPTER kTWO
Investing kand kFinancing kDecisions kand kthe kAccounting kSystem
CHAPTER kTHREE
Operating kDecisions kand kthe kAccounting kSystem
CHAPTER kFOUR
Adjustments, kFinancial kStatements, kand kthe kClosing kProcess
CHAPTER kFIVE
Reporting kand kInterpreting kSales kRevenue, kReceivables, kand kCash
CHAPTER kSIX
Reporting kand kInterpreting kCost kof kSales kand kInventory
CHAPTER kSEVEN
Reporting kand kInterpreting kLong-Lived kAssets
CHAPTER kEIGHT
Reporting kand kInterpreting kCurrent kLiabilities
CHAPTER kNINE
Reporting kand kInterpreting kNon-current kLiabilities
CHAPTER kTEN
Reporting kand kInterpreting kShareholders' kEquity
CHAPTER kELEVEN
Statement kof kCash kFlows
CHAPTER kTWELVE
Communicating kAccounting kInformation kand kAnalyzing kFinancial kStatements
CHAPTER kTHIRTEEN
Reporting kand kInterpreting kInvestments kin kOther kCorporations
1-2
,CHAPTER ONE k
Financial Statements and Business Decisions
k k k k
ANSWERS kTO kQUESTIONS
1. Accounting kis ka ksystem kthat kcollects kand kprocesses k(analyzes, kmeasures, kand
krecords) kfinancial kinformation kabout kan korganization kand kreports kthat
kinformation ktokdecision kmakers.
2. Financial kaccounting kinvolves kpreparation kof kthe kfour kbasic kfinancial kstatements
kandkrelated kdisclosures kfor kexternal kdecision kmakers. kManagerial kaccounting
kinvolves kthe kpreparation kof kdetailed kplans, kbudgets, kforecasts, kand kperformance
kreports kfor kinternal kdecision kmakers.
3. Financial kreports kare kused kby kboth kinternal kand kexternal kgroups kand kindividuals.
kThekinternal kgroups kare kcomprised kof kthe kvarious kmanagers kof kthe kentity. kThe
kexternal kgroups kinclude kthe kowners, kinvestors, kcreditors, kgovernmental kagencies,
kother kinterested kparties, kand kthe kpublic kat klarge.
4. Investors kpurchase kall kor kpart kof ka kbusiness kand khope kto kgain kby kreceiving kpart
kof kwhat kthe kcompany kearns kand/or kselling kthe kcompany kin kthe kfuture kat ka khigher
kprice kthan kthey kpaid. kCreditors klend kmoney kto ka kcompany kfor ka kspecific klength kof
ktime kandkhope kto kgain kby kcharging kinterest kon kthe kloan.
5. In ka ksociety keach korganization kcan kbe kdefined kas ka kseparate kaccounting kentity.
kAn kaccounting kentity kis kthe korganization kfor kwhich kfinancial kdata kare kto kbe
kcollected. kTypical kaccounting kentities kare ka kbusiness, ka kchurch, ka kgovernmental
kunit, ka kuniversity kand kother knonprofit korganizations ksuch kas ka khospital kand ka
kwelfare korganization. kA kbusiness ktypically kis kdefined kand ktreated kas ka kseparate
k entity kbecause kthe kowners, kcreditors, kinvestors, kand kother kinterested kparties
kneed kto kevaluate kits kperformance kand kits kpotential kseparately kfrom kother kentities
kand kfrom kitskowners.
1-3
, 6. Name kof kStatement Alternative kTitle
(a) Income kStatement (a) k Statement kof kEarnings; kStatement kof
Income; kStatement kof kOperations
(b) Balance kSheet (b) kStatement kof kFinancial kPosition
(c) Audit kReport (c) k Report kof kIndependent kAccountants
1-4
