Solution Manual for Financial Accounting, 11th Edition — Robert Libby & Patricia Libby

SOLUTION MANUAL
All Chapters Included

, Financial Accounting 11th Edition by Robert Libby, All Chapters 1 - 13

TABLE OF CONTENTS
CHAPTER 1: Financial Statements and Business Decisions
Focus Company: Le-Nature’s Inc.
CHAPTER 2: Investing and Financing Decisions and the Accounting System
Focus Company: Chipotle Mexican Grill
CHAPTER 3: Operating Decisions and the Accounting System
Focus Company: Chipotle Mexican Grill
CHAPTER 4: Adjustments, Financial Statements, and the Closing Process
Focus Company: Chipotle Mexican Grill
CHAPTER 5: Communicating and Analyzing Accounting Information
Focus Company: Apple Inc.
CHAPTER 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash
Focus Company: Skechers U.S.A.
CHAPTER 7: Reporting and Interpreting Cost of Goods Sold and Inventory
Focus Company: Harley-Davidson, Inc.
CHAPTER 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and
Natural Resources
Focus Company: FedEx Corporation
CHAPTER 9: Reporting and Interpreting Liabilities
Focus Company: Starbucks
CHAPTER 10: Reporting and Interpreting Bond Securities
Focus Company: Amazon
CHAPTER 11: Reporting and Interpreting Stockholders’ Equity
Focus Company: Microsoft
CHAPTER 12: Statement of Cash Flows
Focus Company: National Beverage Corporation
CHAPTER 13: Analyzing Financial Statements
Focus Company: The Home Depot

,Chapter 1
Financial Statements and Business Decisions


ANSWERS TO QUESTIONS


1. Accounting is a system that collects and processes (analyzes, measures,

and records) financial information about an organization and reports
that information todecision makers.


2. Financial accounting involves preparation of the four basic financial

statements andrelated disclosures for external decision makers.
Managerial accounting involves the preparation of detailed plans,
budgets, forecasts, and performance reports for internal decision
makers.


3. Financial reports are used by both internal and external groups and

individuals. Theinternal groups are comprised of the various managers
of the entity. The external groups include the owners, investors,
creditors, governmental agencies, other interested parties, and the
public at large.


4. Investors purchase all or part of a business and hope to gain by

receiving part of what the company earns and/or selling their
ownership interest in the company in the future at a higher price than
they paid. Creditors lend money to a company fora specific length of

, time and hope to gain by charging interest on the loan.

5. In a society, each organization can be defined as a separate accounting

entity. An accounting entity is the organization for which financial data
are to be collected. Typical accounting entities are a business, a church,
a governmental unit, a university and other nonprofit organizations
such as a hospital and a welfare organization. A business typically is
defined and treated as a separate entity because the owners, creditors,
investors, and other interested parties need to evaluate its performance
and its potential separately from other entities and from itsowners.


6. Name of Statement Alternative Title
(a) Income Statement (a) Statement of Earnings; Statement of
Income; Statement of Operations
(b) Balance Sheet (b) Statement of Financial Position
(c) Cash Flow Statement (c) Statement of Cash Flows


7. The heading of each of the four required financial statements should

include thefollowing:
(a) Name of the entity

(b) Name of the statement

(c) Date of the statement, or the period of time

(d) Unit of measure



8. (a) The purpose of the income statement is to present information

about the revenues, expenses, and the net income of an entity for
a specified period oftime.
(b) The purpose of the balance sheet is to report the financial position