Solution Manual For Financial Accounting,
7th Canadian Edition by Libby, Hodge,
Kanaan, Sterling Chapters 1 - 13, Complete
1-1
,TABLE OF CONTENTS
CHAPTER ONE
Financial Statements and Business Decisions
CHAPTER TWO
Investing and Financing Decisions and the Accounting System
CHAPTER THREE
Operating Decisions and the Accounting System
CHAPTER FOUR
Adjustments, Financial Statements, and the Closing Process
CHAPTER FIVE
Reporting and Interpreting Sales Revenue, Receivables, and Cash
CHAPTER SIX
Reporting and Interpreting Cost of Sales and Inventory
CHAPTER SEVEN
Reporting and Interpreting Long-Lived Assets
CHAPTER EIGHT
Reporting and Interpreting Current Liabilities
CHAPTER NINE
Reporting and Interpreting Non-current Liabilities
CHAPTER TEN
Reporting and Interpreting Shareholders' Equity
CHAPTER ELEVEN
Statement of Cash Flows
CHAPTER TWELVE
Communicating Accounting Information and Analyzing Financial Statements
CHAPTER THIRTEEN
Reporting and Interpreting Investments in Other Corporations
1-2
,CHAPTER ONE
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 to decision makers7
2. Financial accounting involves preparation of the four basic financial
statements and related disclosures for external decision makers7 Managerial
accounting involves the preparation of detailed plans, budgets, forecasts,
and performance reports for internal decision makers7
3. Financial reports are used by both internal and external groups and
individuals7 The internal groups are comprised of the various managers of
the entity7 The external groups include the owners, investors, creditors,
governmental agencies, other interested parties, and the public at large7
4. Investors purchase all or part of a business and hope to gain by receiving
part of what the company earns and/or selling the company in the future at a
higher price than they paid7 Creditors lend money to a company for a
specific length of time and hope to gain by charging interest on the loan7
5. In a society each organization can be defined as a separate accounting
entity7 An accounting entity is the organization for which financial data are
to be collected7 Typical accounting entities are a business, a church, a
governmental unit, a university and other nonprofit organizations such as a
hospital and a welfare organization7 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
1-3
, separately from other entities and from its owners7
1-4
7th Canadian Edition by Libby, Hodge,
Kanaan, Sterling Chapters 1 - 13, Complete
1-1
,TABLE OF CONTENTS
CHAPTER ONE
Financial Statements and Business Decisions
CHAPTER TWO
Investing and Financing Decisions and the Accounting System
CHAPTER THREE
Operating Decisions and the Accounting System
CHAPTER FOUR
Adjustments, Financial Statements, and the Closing Process
CHAPTER FIVE
Reporting and Interpreting Sales Revenue, Receivables, and Cash
CHAPTER SIX
Reporting and Interpreting Cost of Sales and Inventory
CHAPTER SEVEN
Reporting and Interpreting Long-Lived Assets
CHAPTER EIGHT
Reporting and Interpreting Current Liabilities
CHAPTER NINE
Reporting and Interpreting Non-current Liabilities
CHAPTER TEN
Reporting and Interpreting Shareholders' Equity
CHAPTER ELEVEN
Statement of Cash Flows
CHAPTER TWELVE
Communicating Accounting Information and Analyzing Financial Statements
CHAPTER THIRTEEN
Reporting and Interpreting Investments in Other Corporations
1-2
,CHAPTER ONE
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 to decision makers7
2. Financial accounting involves preparation of the four basic financial
statements and related disclosures for external decision makers7 Managerial
accounting involves the preparation of detailed plans, budgets, forecasts,
and performance reports for internal decision makers7
3. Financial reports are used by both internal and external groups and
individuals7 The internal groups are comprised of the various managers of
the entity7 The external groups include the owners, investors, creditors,
governmental agencies, other interested parties, and the public at large7
4. Investors purchase all or part of a business and hope to gain by receiving
part of what the company earns and/or selling the company in the future at a
higher price than they paid7 Creditors lend money to a company for a
specific length of time and hope to gain by charging interest on the loan7
5. In a society each organization can be defined as a separate accounting
entity7 An accounting entity is the organization for which financial data are
to be collected7 Typical accounting entities are a business, a church, a
governmental unit, a university and other nonprofit organizations such as a
hospital and a welfare organization7 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
1-3
, separately from other entities and from its owners7
1-4
