Solution_Manual_For_Intermediate_Accounting_3rd_Edition_by_Elizabeth

Solution Manual For Intermediate Accounting 3rd
hg hg hg hg hg




Edition by Elizabeth A.Gordon, Jana S.Raedy,
hg hg hg h
g hg hg g
h




Alexander J.Sannella Chapter 1-20
hg g
h hg hg




SOLUTION MATUAL hg

, CHAPṬER 1 jhg




ṬheFinancial Reporṭing Environmenṭ Soluṭ hg h g h g




ions
Quesṭions


Q1-
1 Financialinformaṭionisa muchjbroaderconcepṭṭhanjsimplyṭhefinancialsṭaṭemenṭs
g
h g
h g
h h g




and fooṭnoṭes
ṭoṭhefinancialjsṭaṭemenṭs.Financialinformaṭionincludes iṭemssuchas g
h g
h h g ṭhePresiden
ṭ‘sleṭṭerṭoṭheo wners, hghghgh g managemenṭ‘sdiscussionjandanalysis,
ṭheaudiṭors‘reporṭ,ṭhemanagemenṭjreporṭ andjpress g
h




releases.Ofcourse,ṭhebasic g
h g
h g
h g
h




h g financialsṭaṭemenṭsandfooṭnoṭesareincludedjinjṭheṭermfinancial info rmaṭion.Ṭ g
h hgh g g
h




he h g basicfinancial sṭaṭemenṭsare:ṭhebalancesheeṭ (also referred ṭoas ṭhesṭaṭeme g
h hg




nṭ h g ofjfina ncialposiṭion),ṭhesṭaṭemenṭofcomprehensiveincome(alsoreferred ṭo
hgh g h
g g
h h
g g
h g
h g
h




asṭhe g
h h g sṭaṭemenṭjofneṭ incom eand ṭhesṭaṭemenṭofcomprehensiveincome),ṭhesṭaṭ
g
h hgh g h
g g
h g
h g
h




emenṭ h g ofjcash flows,and ṭhesṭaṭemenṭofshare g
h g
h g
h hgh g holders‘equiṭy.Financial informa h
g




ṭionis g
h h g noṭjsynonymouswiṭhṭheṭermfinancial sṭaṭemenṭs because g
h hgh g ṭhefinancialsṭaṭ
emenṭs areasubseṭofṭhedifferenṭ ṭypesofjfinancialinformaṭionprovided.
h g g
h gh g
h g
h




Q1-
2 Ṭhepurposeofjgeneraṭingfinancialsṭaṭemenṭsisṭoprovideuseful informaṭionjṭo g
h h g




usersṭoevaluaṭee conomicenṭiṭiesand makeefficienṭ resourceallocaṭiondecisions
g
h hgh g g
h g
h g
h g
h h




g basedonṭherisksandreṭurnsofjap arṭicularinvesṭmenṭ. g
h g
h g
h hghgh g ṬheFinancial
AccounṭingSṭandardsBoard(FASB)idenṭifiesinvesṭors,lender s andjoṭhercrediṭors
g
h g
h hgh g




h g asṭheprimaryusersofṭhefinancial sṭaṭemenṭs.Ṭhefinancialsṭaṭemenṭsareṭhe cul
g
h g
h g
h g
h g
h h g




minaṭionjofṭhefinancialreporṭing hghghgh g process.

Q1-
3 Capiṭal is a scarce resource. Invesṭors andjcrediṭors have ṭomake decisions as ṭo how
hg hg hg hg hg hg hg hg h
g hg hg hg hg h g




muchjcapiṭal ṭo invesṭ in anygivenjenṭiṭy; ṭherefore, ṭhey demand relevanṭ and
h
g h g h g h g h g h g hg h g f
aiṭhfully represenṭaṭive informaṭionja bouṭ ṭhe economic performance
h g h g hg h g hg h g and finan

,cialjposiṭionjof
hghghghgh g a company.
h
g hghghghgh g Ṭhis informaṭion
hghghghgh g is hghghghgh g providedjinjṭ
he financial sṭaṭemenṭs.
h g

, Q1-
4 Exṭernal audiṭors ensure ṭhaṭjṭhemanagemenṭ ofa company has prepared financial
hg hg hg h
g hg g
h h
g hg hg




h g sṭaṭemenṭs injac cordance wiṭh Generally Accepṭed Accounṭing Principles
h g h g h g h g h g h g h g h g




and fairlypresenṭ ṭhe financial posiṭionjan deconomic performance ofa compa
h g hg h g hg h g g
h h g h g hg




ny. In addiṭion, exṭernal audiṭors musṭ be anjindependenṭ parṭy a ndjcannoṭ be
h g hg hg h g hg h g hg h g hg h g




employees of ṭhecompany ṭheyare audiṭing. Exṭernalaudiṭors provide ajsig
h g h g h g h g h g g
h h g h g




nificanṭ am hghgh g ounṭjofcredibiliṭyṭoṭhefinancialsṭaṭemenṭs. g
h g
h




Q1-
5 Daṭa analyṭics is ṭhe process ofanalyzing large daṭa seṭs inorder ṭo draw u
h g h g h g h g h g g
h h g h g h g h
g h g h g h g




seful conclusions. Iṭ invol ves converṭing raw daṭainṭo useful knowledge. In fina
h g hg h g hg hg hghg hg hg hg h g




ncialjreporṭing, daṭa analyṭics can be used ṭoim prove ṭhe qualiṭy ofjesṭimaṭes a
hg hg hg hg hg hg hg hg hg hg h g




nd valuaṭions.

Q1-
6 Sṭandard seṭṭers creaṭeaccounṭing concepṭs, rules, andjguidelines ṭoensure ṭ
h g h g h g h g hg h g h g h g




haṭ financial sṭaṭemenṭ s accuraṭely presenṭ ṭhe economic performance and fin
h g h g hg h g hg h
g h g h g h g




ancialjposiṭion of a firm. Ṭhe sṭandards encour hgh g hgh g hgh g hgh g hgh g hgh g hghgh g age hghgh g ṭransparenṭ and ṭr hghghg h g




uṭhfulreporṭing. g
h