Financial accounting 7th edition solutions

Solution Manual For Financial Accounting, 7th
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Canadian Edition by Libby, Hodge, Kanaan,
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Sterling Chapters 1 - 13, Complete
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1-1

,TABLE OF CONTENTS n n n




CHAPTER ONE n




Financial Statements and Business Decisions
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CHAPTER TWO n




Investing and Financing Decisions and the Accounting System
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CHAPTER THREE n




Operating Decisions and the Accounting System
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CHAPTER FOUR n




Adjustments, Financial Statements, and the Closing Process
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CHAPTER FIVE n




Reporting and Interpreting Sales Revenue, Receivables, and Cash
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CHAPTER SIX n




Reporting and Interpreting Cost of Sales and Inventory
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CHAPTER SEVEN n




Reporting and Interpreting Long-Lived Assets
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CHAPTER EIGHT n




Reporting and Interpreting Current Liabilities
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CHAPTER NINE n




Reporting and Interpreting Non-current Liabilities
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CHAPTER TEN n




Reporting and Interpreting Shareholders' Equity
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CHAPTER ELEVEN n




Statement of Cash Flows
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CHAPTER TWELVE n




Communicating Accounting Information and Analyzing Financial Statements
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CHAPTER THIRTEEN n




Reporting and Interpreting Investments in Other Corporations
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1-2

,CHAPTER ONE n




Financial Statements and Business Decisions n n n n




ANSWERS TO QUESTIONS n n




1. Accounting is a system that collects and processes (analyzes, measures, and
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records) financial information about an organization and reports that information to
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decision makers.
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2. Financial accounting involves preparation of the four basic financial statements and
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related disclosures for external decision makers. Managerial accounting involves the
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preparation of detailed plans, budgets, forecasts, and performance reports for internal
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decision makers.
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3. Financial reports are used by both internal and external groups and individuals. The
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internal groups are comprised of the various managers of the entity. The external
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groups include the owners, investors, creditors, governmental agencies, other
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interested parties, and the public at large.
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4. Investors purchase all or part of a business and hope to gain by receiving part of what
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the company earns and/or selling the company in the future at a higher price than they
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paid. Creditors lend money to a company for a specific length of time andhope to gain
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by charging interest on the loan.
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5. In a society each organization can be defined as a separate accounting entity. An
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accounting entity is the organization for which financial data are to be collected. Typical
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accounting entities are a business, a church, a governmental unit, a university and
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other nonprofit organizations such as a hospital and a welfare organization. A
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business typically is defined and treated as a separate entity because the owners,
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creditors, investors, and other interested parties need to evaluate its performance and
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its potential separately from other entities and from itsowners.
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6. Name of Statement n n Alternative Title n




1-3

, (a) Income Statement
n (a) Statement of Earnings; Statement of
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Income; Statement of Operations
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(b) Balance Sheet
n (b) Statement of Financial Position
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(c) Audit Report
n (c) Report of Independent Accountants
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