Solution Manual For Financial Accounting,
8th Canadian Edition by Libby, Hodge,
Kanaan, Sterling Chapters 1 - 13, Complete
1-1
,TABLEOF CONTENTS i
CHAPTER iiONE
Financial iiStatements iiand iiBusiness iiDecisions
CHAPTER iiTWO
Investing iiand iiFinancing iiDecisions iiand iithe iiAccounting iiSystem
CHAPTER iiTHREE
Operating iiDecisions iiand iithe iiAccounting iiSystem
CHAPTER iiFOUR
Adjustments, iiFinancial iiStatements, iiand iithe iiClosing iiProcess
CHAPTER iiFIVE
Reporting iiand iiInterpreting iiSales iiRevenue, iiReceivables, iiand iiCash
CHAPTER iiSIX
Reporting iiand iiInterpreting iiCost iiof iiSales iiand iiInventory
CHAPTER iiSEVEN
Reporting iiand iiInterpreting iiLong-Lived iiAssets
CHAPTER iiEIGHT
Reporting iiand iiInterpreting iiCurrent iiLiabilities
CHAPTER iiNINE
Reporting iiand iiInterpreting iiNon-current iiLiabilities
CHAPTER iiTEN
Reporting iiand iiInterpreting iiShareholders' iiEquity
CHAPTER iiELEVEN
Statement iiof iiCash iiFlows
CHAPTER iiTWELVE
Communicating iiAccounting iiInformation iiand iiAnalyzing iiFinancial iiStatements
CHAPTER iiTHIRTEEN
Reporting iiand iiInterpreting iiInvestments iiin iiOther iiCorporations
1-2
,CHAPTER ONE
Financial Statements and Business Decisions
ANSWERS TO QUESTIONS
ii ii
1. Accounting iiis iia iisystem iithat iicollects iiand iiprocesses ii(analyzes, iimeasures, iiand ii records)
iifinancial iiinformation iiabout iian iiorganization iiand iireports iithat iiinformation iito i i decision
iimakers. ii
2. Financial iiaccounting iiinvolves iipreparation iiof iithe iifour iibasic iifinancial iistatements iiand
i i related iidisclosures iifor iiexternal iidecision iimakers. iiManagerial iiaccounting iiinvolves
i i the iipreparation iiof iidetailed iiplans, iibudgets, iiforecasts, iiand iiperformance iireports iifor
i i internal iidecision iimakers. ii
3. Financial iireports iiare iiused iiby iiboth iiinternal iiand iiexternal iigroups iiand iiindividuals. iiThe
i i internal iigroups iiare iicomprised iiof iithe iivarious iimanagers iiof iithe iientity. iiThe iiexternal
i i groups iiinclude iithe iiowners, iiinvestors, iicreditors, iigovernmental iiagencies, iiother
i i interested iiparties, iiand iithe iipublic iiat iilarge. ii
4. Investors iipurchase iiall iior iipart iiof iia iibusiness iiand iihope iito iigain iiby iireceiving iipart iiof
i i what iithe iicompany iiearns iiand/or iiselling iithe iicompany iiin iithe iifuture iiat iia iihigher iiprice
i i than iithey iipaid. iiCreditors iilend iimoney iito iia iicompany iifor iia iispecific iilength iiof iitime iiand
i i hope iito iigain iiby iicharging iiinterest iion iithe iiloan. ii
5. In iia iisociety iieach iiorganization iican iibe iidefined iias iia iiseparate iiaccounting iientity. iiAn
i i accounting iientity iiis iithe iiorganization iifor iiwhich iifinancial iidata iiare iito iibe iicollected.
i i Typical iiaccounting iientities iiare iia iibusiness, iia iichurch, iia iigovernmental iiunit, iia
i i university iiand iiother iinonprofit iiorganizations iisuch iias iia iihospital iiand iia iiwelfare
i i organization. iiA iibusiness iitypically iiis iidefined iiand iitreated iias iia iiseparate ii entity
i i because iithe iiowners, iicreditors, iiinvestors, iiand iiother iiinterested iiparties iineed iito
i i evaluate iiits iiperformance iiand iiits iipotential iiseparately iifrom iiother iientities iiand iifrom iiits
1-3
, ii owners. ii
1-4
8th Canadian Edition by Libby, Hodge,
Kanaan, Sterling Chapters 1 - 13, Complete
1-1
,TABLEOF CONTENTS i
CHAPTER iiONE
Financial iiStatements iiand iiBusiness iiDecisions
CHAPTER iiTWO
Investing iiand iiFinancing iiDecisions iiand iithe iiAccounting iiSystem
CHAPTER iiTHREE
Operating iiDecisions iiand iithe iiAccounting iiSystem
CHAPTER iiFOUR
Adjustments, iiFinancial iiStatements, iiand iithe iiClosing iiProcess
CHAPTER iiFIVE
Reporting iiand iiInterpreting iiSales iiRevenue, iiReceivables, iiand iiCash
CHAPTER iiSIX
Reporting iiand iiInterpreting iiCost iiof iiSales iiand iiInventory
CHAPTER iiSEVEN
Reporting iiand iiInterpreting iiLong-Lived iiAssets
CHAPTER iiEIGHT
Reporting iiand iiInterpreting iiCurrent iiLiabilities
CHAPTER iiNINE
Reporting iiand iiInterpreting iiNon-current iiLiabilities
CHAPTER iiTEN
Reporting iiand iiInterpreting iiShareholders' iiEquity
CHAPTER iiELEVEN
Statement iiof iiCash iiFlows
CHAPTER iiTWELVE
Communicating iiAccounting iiInformation iiand iiAnalyzing iiFinancial iiStatements
CHAPTER iiTHIRTEEN
Reporting iiand iiInterpreting iiInvestments iiin iiOther iiCorporations
1-2
,CHAPTER ONE
Financial Statements and Business Decisions
ANSWERS TO QUESTIONS
ii ii
1. Accounting iiis iia iisystem iithat iicollects iiand iiprocesses ii(analyzes, iimeasures, iiand ii records)
iifinancial iiinformation iiabout iian iiorganization iiand iireports iithat iiinformation iito i i decision
iimakers. ii
2. Financial iiaccounting iiinvolves iipreparation iiof iithe iifour iibasic iifinancial iistatements iiand
i i related iidisclosures iifor iiexternal iidecision iimakers. iiManagerial iiaccounting iiinvolves
i i the iipreparation iiof iidetailed iiplans, iibudgets, iiforecasts, iiand iiperformance iireports iifor
i i internal iidecision iimakers. ii
3. Financial iireports iiare iiused iiby iiboth iiinternal iiand iiexternal iigroups iiand iiindividuals. iiThe
i i internal iigroups iiare iicomprised iiof iithe iivarious iimanagers iiof iithe iientity. iiThe iiexternal
i i groups iiinclude iithe iiowners, iiinvestors, iicreditors, iigovernmental iiagencies, iiother
i i interested iiparties, iiand iithe iipublic iiat iilarge. ii
4. Investors iipurchase iiall iior iipart iiof iia iibusiness iiand iihope iito iigain iiby iireceiving iipart iiof
i i what iithe iicompany iiearns iiand/or iiselling iithe iicompany iiin iithe iifuture iiat iia iihigher iiprice
i i than iithey iipaid. iiCreditors iilend iimoney iito iia iicompany iifor iia iispecific iilength iiof iitime iiand
i i hope iito iigain iiby iicharging iiinterest iion iithe iiloan. ii
5. In iia iisociety iieach iiorganization iican iibe iidefined iias iia iiseparate iiaccounting iientity. iiAn
i i accounting iientity iiis iithe iiorganization iifor iiwhich iifinancial iidata iiare iito iibe iicollected.
i i Typical iiaccounting iientities iiare iia iibusiness, iia iichurch, iia iigovernmental iiunit, iia
i i university iiand iiother iinonprofit iiorganizations iisuch iias iia iihospital iiand iia iiwelfare
i i organization. iiA iibusiness iitypically iiis iidefined iiand iitreated iias iia iiseparate ii entity
i i because iithe iiowners, iicreditors, iiinvestors, iiand iiother iiinterested iiparties iineed iito
i i evaluate iiits iiperformance iiand iiits iipotential iiseparately iifrom iiother iientities iiand iifrom iiits
1-3
, ii owners. ii
1-4
