Solution Manual
Intermediate Accounting,
By David Spiceland, Mark Nelson
11th Edition
,Table Of Contents
Section 1: The Role Of Accounting As An Information System
Chapter 1: Environment And Theoretical Structure Of Financial Accounting
Chapter 2: Review Of The Accounting Process
Chapter 3: The Balance Sheet And Financial Disclosures
Chapter 4: The Income Statement, Comprehensive Income, And The Statement Of Cash Flows
Chapter 5: Time Value Of Money Concepts
Chapter 6: Revenue Recognition
Section 2: Assets
Chapter 7: Cash And Receivables
Chapter 8: Inventories: Measurement
Chapter 9: Inventories: Additional Issues
Chapter 10: Property, Plant, And Equipment And Intangible Assets: Acquisition
Chapter 11: Property, Plant, And Equipment And Intangible Assets: Utilization And Disposition
Chapter 12: Investments
Section 3: Liabilities And Shareholders’ Equity
Chapter 13: Current Liabilities And Contingencies
Chapter 14: Bonds And Long-Term Notes
Chapter 15: Leases
Chapter 16: Accounting For Income Taxes
Chapter 17: Pensions And Other Postretirement Benefits
Chapter 18: Shareholders’ Equity
Section 4: Additional Financial Reporting Issues
Chapter 19: Share-Based Compensation And Earnings Per Share
Chapter 20: Accounting Changes And Error Corrections
Chapter 21: The Statement Of Cash Flows Revisited
,Chapter 1 Environment And Theoretical Structure Of
Financial Accounting
Question 1–1
Financial Accounting Is Concerned With Providing Relevant Financial
Information About Various Kinds Of Organizations To Different Types Of External
Users. The Primary Focus Of Financial Accounting Is On The Financial Information
Provided By Profit- Oriented Companies To Their Present And Potential Investors
And Creditors.
Question 1–2
Resources Are Efficiently Allocated If They Are Given To Enterprises That Will
Use Them To Provide Goods And Services Desired By Society And Not To
Enterprises That Will Waste Them. The Capital Markets Are The Mechanism That
Fosters This Efficient Allocation Of Resources.
Question 1–3
Two Extremely Important Variables That Must Be Considered In Any
Investment Decision Are The Expected Rate Of Return And The Uncertainty Or Risk
Of That Expected Return.
Question 1–4
In The Long Run, A Company Will Be Able To Provide Investors And Creditors
With A Rate Of Return Only If It Can Generate A Profit. That Is, It Must Be Able To
Use The Resources Provided To It To Generate Cash Receipts From Selling A
Product Or Service That Exceed The Cash Disbursements Necessary To Provide That
Product Or Service.
Question 1–5
The Primary Objective Of Financial Accounting Is To Provide Investors And
Creditors With Information That Will Help Them Make Investment And Credit
Decisions.
Question 1–6
Net Operating Cash Flows Are The Difference Between Cash Receipts And Cash
Disbursements During A Period Of Time From Transactions Related To Providing
Goods And Services To Customers. Net Operating Cash Flows May Not Be A Good
Indicator Of Future Cash Flows Because, By Ignoring Uncompleted Transactions,
They May Not Match The Accomplishments And Sacrifices Of The Period.
, Question 1–7
Gaap (Generally Accepted Accounting Principles) Are A Dynamic Set Of Both
Broad And Specific Guidelines That A Company Should Follow In Measuring And
Reporting The Information In Their Financial Statements And Related Notes. It Is
Important That All Companies Follow Gaap So That Investors Can Compare
Financial Information Across Companies To Make Their Resource Allocation
Decisions.
Question 1–8
In 1934, Congress Created The Sec And Gave It The Job Of Setting Accounting
And Reporting Standards For Companies Whose Securities Are Publicly Traded. The
Sec Has Retained The Power, But Has Relied On Private Sector Bodies To Create The
Standards. The Current Private Sector Body Responsible For Setting Accounting
Standards Is The Fasb.
Question 1–9
Auditors Are Independent, Professional Accountants Who Examine Financial
Statements To Express An Opinion. The Opinion Reflects The Auditors‘ Assessment
Of The Statements' Fairness, Which Is Determined By The Extent To Which They
Are Prepared In Compliance With Gaap. The Auditor Adds Credibility To The
Financial Statements, Which Increases The Confidence Of Capital Market
Participants Relying On That Information.
Intermediate Accounting,
By David Spiceland, Mark Nelson
11th Edition
,Table Of Contents
Section 1: The Role Of Accounting As An Information System
Chapter 1: Environment And Theoretical Structure Of Financial Accounting
Chapter 2: Review Of The Accounting Process
Chapter 3: The Balance Sheet And Financial Disclosures
Chapter 4: The Income Statement, Comprehensive Income, And The Statement Of Cash Flows
Chapter 5: Time Value Of Money Concepts
Chapter 6: Revenue Recognition
Section 2: Assets
Chapter 7: Cash And Receivables
Chapter 8: Inventories: Measurement
Chapter 9: Inventories: Additional Issues
Chapter 10: Property, Plant, And Equipment And Intangible Assets: Acquisition
Chapter 11: Property, Plant, And Equipment And Intangible Assets: Utilization And Disposition
Chapter 12: Investments
Section 3: Liabilities And Shareholders’ Equity
Chapter 13: Current Liabilities And Contingencies
Chapter 14: Bonds And Long-Term Notes
Chapter 15: Leases
Chapter 16: Accounting For Income Taxes
Chapter 17: Pensions And Other Postretirement Benefits
Chapter 18: Shareholders’ Equity
Section 4: Additional Financial Reporting Issues
Chapter 19: Share-Based Compensation And Earnings Per Share
Chapter 20: Accounting Changes And Error Corrections
Chapter 21: The Statement Of Cash Flows Revisited
,Chapter 1 Environment And Theoretical Structure Of
Financial Accounting
Question 1–1
Financial Accounting Is Concerned With Providing Relevant Financial
Information About Various Kinds Of Organizations To Different Types Of External
Users. The Primary Focus Of Financial Accounting Is On The Financial Information
Provided By Profit- Oriented Companies To Their Present And Potential Investors
And Creditors.
Question 1–2
Resources Are Efficiently Allocated If They Are Given To Enterprises That Will
Use Them To Provide Goods And Services Desired By Society And Not To
Enterprises That Will Waste Them. The Capital Markets Are The Mechanism That
Fosters This Efficient Allocation Of Resources.
Question 1–3
Two Extremely Important Variables That Must Be Considered In Any
Investment Decision Are The Expected Rate Of Return And The Uncertainty Or Risk
Of That Expected Return.
Question 1–4
In The Long Run, A Company Will Be Able To Provide Investors And Creditors
With A Rate Of Return Only If It Can Generate A Profit. That Is, It Must Be Able To
Use The Resources Provided To It To Generate Cash Receipts From Selling A
Product Or Service That Exceed The Cash Disbursements Necessary To Provide That
Product Or Service.
Question 1–5
The Primary Objective Of Financial Accounting Is To Provide Investors And
Creditors With Information That Will Help Them Make Investment And Credit
Decisions.
Question 1–6
Net Operating Cash Flows Are The Difference Between Cash Receipts And Cash
Disbursements During A Period Of Time From Transactions Related To Providing
Goods And Services To Customers. Net Operating Cash Flows May Not Be A Good
Indicator Of Future Cash Flows Because, By Ignoring Uncompleted Transactions,
They May Not Match The Accomplishments And Sacrifices Of The Period.
, Question 1–7
Gaap (Generally Accepted Accounting Principles) Are A Dynamic Set Of Both
Broad And Specific Guidelines That A Company Should Follow In Measuring And
Reporting The Information In Their Financial Statements And Related Notes. It Is
Important That All Companies Follow Gaap So That Investors Can Compare
Financial Information Across Companies To Make Their Resource Allocation
Decisions.
Question 1–8
In 1934, Congress Created The Sec And Gave It The Job Of Setting Accounting
And Reporting Standards For Companies Whose Securities Are Publicly Traded. The
Sec Has Retained The Power, But Has Relied On Private Sector Bodies To Create The
Standards. The Current Private Sector Body Responsible For Setting Accounting
Standards Is The Fasb.
Question 1–9
Auditors Are Independent, Professional Accountants Who Examine Financial
Statements To Express An Opinion. The Opinion Reflects The Auditors‘ Assessment
Of The Statements' Fairness, Which Is Determined By The Extent To Which They
Are Prepared In Compliance With Gaap. The Auditor Adds Credibility To The
Financial Statements, Which Increases The Confidence Of Capital Market
Participants Relying On That Information.
