Solution Manual For Financial Accounting,
b b b b
b 7th Canadian Edition by Libby, Hodge,
b b b b b
b Kanaan, Sterling Chapters 1 - 13, Complete
b b b b b b
1-1
,TABLE OF CONTENTS b b b
CHAPTER bONE
Financial bStatements band bBusiness bDecisions
CHAPTER bTWO
Investing band bFinancing bDecisions band bthe bAccounting bSystem
CHAPTER bTHREE
Operating bDecisions band bthe bAccounting bSystem
CHAPTER bFOUR
Adjustments, bFinancial bStatements, band bthe bClosing bProcess
CHAPTER bFIVE
Reporting band bInterpreting bSales bRevenue, bReceivables, band bCash
CHAPTER bSIX
Reporting band bInterpreting bCost bof bSales band bInventory
CHAPTER bSEVEN
Reporting band bInterpreting bLong-Lived bAssets
CHAPTER bEIGHT
Reporting band bInterpreting bCurrent bLiabilities
CHAPTER bNINE
Reporting band bInterpreting bNon-current bLiabilities
CHAPTER bTEN
Reporting band bInterpreting bShareholders' bEquity
CHAPTER bELEVEN
Statement bof bCash bFlows
CHAPTER bTWELVE
Communicating bAccounting bInformation band bAnalyzing bFinancial bStatements
CHAPTER bTHIRTEEN
Reporting band bInterpreting bInvestments bin bOther bCorporations
1-2
,CHAPTER ONE b
Financial Statements and Business Decisions
b b b b
ANSWERS TO QUESTIONS
b b
1. Accounting bis ba bsystem bthat bcollects band bprocesses b(analyzes, bmeasures, band
brecords) bfinancial binformation babout ban borganization band breports bthat binformation
btob
decision bmakers.
2. Financial baccounting binvolves bpreparation bof bthe bfour bbasic bfinancial bstatements
bandbrelated bdisclosures bfor bexternal bdecision bmakers. bManagerial baccounting
binvolves bthe bpreparation bof bdetailed bplans, bbudgets, bforecasts, band bperformance
breports bfor binternal bdecision bmakers.
3. Financial breports bare bused bby bboth binternal band bexternal bgroups band bindividuals.
bThebinternal bgroups bare bcomprised bof bthe bvarious bmanagers bof bthe bentity. bThe
bexternal bgroups binclude bthe bowners, binvestors, bcreditors, bgovernmental bagencies,
bother binterested bparties, band bthe bpublic bat blarge.
4. Investors bpurchase ball bor bpart bof ba bbusiness band bhope bto bgain bby breceiving bpart bof
bwhat bthe bcompany bearns band/or bselling bthe bcompany bin bthe bfuture bat ba bhigher
bprice bthan bthey bpaid. bCreditors blend bmoney bto ba bcompany bfor ba bspecific blength bof
btime bandbhope bto bgain bby bcharging binterest bon bthe bloan.
5. In ba bsociety beach borganization bcan bbe bdefined bas ba bseparate baccounting bentity. bAn
baccounting bentity bis bthe borganization bfor bwhich bfinancial bdata bare bto bbe bcollected.
bTypical baccounting bentities bare ba bbusiness, ba bchurch, ba bgovernmental bunit, ba
buniversity band bother bnonprofit borganizations bsuch bas ba bhospital band ba bwelfare
borganization. bA bbusiness btypically bis bdefined band btreated bas ba bseparate b entity
bbecause bthe bowners, bcreditors, binvestors, band bother binterested bparties bneed bto
bevaluate bits bperformance band bits bpotential bseparately bfrom bother bentities band bfrom
bitsb
owners.
1-3
, 6. Name bof bStatement Alternative bTitle
(a) Income bStatement (a) b Statement bof bEarnings; bStatement bof
Income; bStatement bof bOperations
(b) Balance bSheet (b) bStatement bof bFinancial bPosition
(c) Audit bReport (c) b Report bof bIndependent bAccountants
1-4
b b b b
b 7th Canadian Edition by Libby, Hodge,
b b b b b
b Kanaan, Sterling Chapters 1 - 13, Complete
b b b b b b
1-1
,TABLE OF CONTENTS b b b
CHAPTER bONE
Financial bStatements band bBusiness bDecisions
CHAPTER bTWO
Investing band bFinancing bDecisions band bthe bAccounting bSystem
CHAPTER bTHREE
Operating bDecisions band bthe bAccounting bSystem
CHAPTER bFOUR
Adjustments, bFinancial bStatements, band bthe bClosing bProcess
CHAPTER bFIVE
Reporting band bInterpreting bSales bRevenue, bReceivables, band bCash
CHAPTER bSIX
Reporting band bInterpreting bCost bof bSales band bInventory
CHAPTER bSEVEN
Reporting band bInterpreting bLong-Lived bAssets
CHAPTER bEIGHT
Reporting band bInterpreting bCurrent bLiabilities
CHAPTER bNINE
Reporting band bInterpreting bNon-current bLiabilities
CHAPTER bTEN
Reporting band bInterpreting bShareholders' bEquity
CHAPTER bELEVEN
Statement bof bCash bFlows
CHAPTER bTWELVE
Communicating bAccounting bInformation band bAnalyzing bFinancial bStatements
CHAPTER bTHIRTEEN
Reporting band bInterpreting bInvestments bin bOther bCorporations
1-2
,CHAPTER ONE b
Financial Statements and Business Decisions
b b b b
ANSWERS TO QUESTIONS
b b
1. Accounting bis ba bsystem bthat bcollects band bprocesses b(analyzes, bmeasures, band
brecords) bfinancial binformation babout ban borganization band breports bthat binformation
btob
decision bmakers.
2. Financial baccounting binvolves bpreparation bof bthe bfour bbasic bfinancial bstatements
bandbrelated bdisclosures bfor bexternal bdecision bmakers. bManagerial baccounting
binvolves bthe bpreparation bof bdetailed bplans, bbudgets, bforecasts, band bperformance
breports bfor binternal bdecision bmakers.
3. Financial breports bare bused bby bboth binternal band bexternal bgroups band bindividuals.
bThebinternal bgroups bare bcomprised bof bthe bvarious bmanagers bof bthe bentity. bThe
bexternal bgroups binclude bthe bowners, binvestors, bcreditors, bgovernmental bagencies,
bother binterested bparties, band bthe bpublic bat blarge.
4. Investors bpurchase ball bor bpart bof ba bbusiness band bhope bto bgain bby breceiving bpart bof
bwhat bthe bcompany bearns band/or bselling bthe bcompany bin bthe bfuture bat ba bhigher
bprice bthan bthey bpaid. bCreditors blend bmoney bto ba bcompany bfor ba bspecific blength bof
btime bandbhope bto bgain bby bcharging binterest bon bthe bloan.
5. In ba bsociety beach borganization bcan bbe bdefined bas ba bseparate baccounting bentity. bAn
baccounting bentity bis bthe borganization bfor bwhich bfinancial bdata bare bto bbe bcollected.
bTypical baccounting bentities bare ba bbusiness, ba bchurch, ba bgovernmental bunit, ba
buniversity band bother bnonprofit borganizations bsuch bas ba bhospital band ba bwelfare
borganization. bA bbusiness btypically bis bdefined band btreated bas ba bseparate b entity
bbecause bthe bowners, bcreditors, binvestors, band bother binterested bparties bneed bto
bevaluate bits bperformance band bits bpotential bseparately bfrom bother bentities band bfrom
bitsb
owners.
1-3
, 6. Name bof bStatement Alternative bTitle
(a) Income bStatement (a) b Statement bof bEarnings; bStatement bof
Income; bStatement bof bOperations
(b) Balance bSheet (b) bStatement bof bFinancial bPosition
(c) Audit bReport (c) b Report bof bIndependent bAccountants
1-4
