Intermediate Accounting 11th Edition By Spiceland Test Bank - Complete Solutions (Guaranteed A++) Best 2024

Complete Solution Manual for Intermediate Accounting, 11th Edition 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 profitoriented 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.