Solution Manual for Financial Accounting 11th Edition
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Robert Libby, Patricia Libby, Complete Chapters 1 – 13
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, TABLE OF CONTENTS k
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CHAPTER 1: Financial Statements and Business Decisions
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CHAPTER 2: Investing and Financing Decisions and the Accounting System
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CHAPTER 3: Operating Decisions and the Accounting System
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CHAPTER 4: Adjustments, Financial Statements, and the Closing Process
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CHAPTER 5: Communicating and Analyzing Accounting Information
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CHAPTER 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash
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CHAPTER 7: Reporting and Interpreting Cost of Goods Sold and Inventory
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CHAPTER 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural
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CHAPTER 9: Reporting and Interpreting Liabilities
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CHAPTER 10: Reporting and Interpreting Bond Securities
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CHAPTER 11: Reporting and Interpreting Stockholders' Equity
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CHAPTER 12: Statement of Cash Flows
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CHAPTER 13: Analyzing Financial Statements
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, Chapter 1 Financial Statements andBusiness jkjk jkjk jkjk jkjk jkjk
Decisions
ANSWERSTOQUESTIONS jk jk
1. Accounting is a system that collects and processes (analyzes, measures, and records) jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk j kj k
financial information about an organization and reports that information to
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decision
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2. Financial accounting involves preparation of the four basic financial statements and
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j related disclosures for external decision makers. Managerial accounting involves
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the
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internal
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3. Financial reports are used by both internal and external groups and individuals. The
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j 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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j 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 ofjkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk
j what the company earns and/or selling their ownership interest in the company
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in the future at a higher price than they paid. Creditors lend money to a
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company for a
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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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jaccounting entity is the organization for which financial data are to be collected.
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Typical accounting entities are a business, a church, a governmental unit, a
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university
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organization. A
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because the owners, creditors, investors, and other interested parties need to
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evaluate its performance and
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its owners.
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6. Name of Statement jkjk jkjk Alternative Title kjjk
(a) Income Statement k
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Income; Statement of Operations jkjk jkjk jkjk
(b) Balance Sheet k
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(c) Cash Flow Statement jkjk k
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j (c) Statement of Cash Flows jkjk jkjk jkjk jkjk
7. The heading of each of the four required financial statements should include the
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(a) Name of the entity jkjk jkjk jkjk
(b) Name of the statement jkjk jkjk jkjk
(c) Date of the statement, or the period of time jkjk jkjk jkjk jkjk jkjk k
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(d) Unit of measure k
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8. (a) The purpose of the income statement is to present information about the
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revenues, expenses, and the net income of an entity for a specified period
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of time.
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(b) The purpose of the balance sheet is to report the financial position of an entity at
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a given date, that is, to report information about the assets, liabilities and
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stockholders’ equity of the entity as of a specific date.
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(c) The purpose of the statement of cash flows is to present information about the
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flow of cash into the entity (sources), the flow of cash out of the entity (uses),
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and the net increase or decrease in cash during the period.
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(d) The statement of stockholders’ equity reports the changes in each of the
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company’s stockholders’ equity accounts during the accounting period,
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including issue and repurchase of stock and the way that net income and
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distribution of dividends affected the retained earnings of the company
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during that period.
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9. The income statement and the statement of cash flows are dated ―For the Year
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Ended December 31‖ because they report the inflows and outflows of
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resources
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―At December 31‖ because it represents the resources, obligations, and
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stockholders’ equity at a
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Robert Libby, Patricia Libby, Complete Chapters 1 – 13
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jkjk
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, TABLE OF CONTENTS k
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j jkk
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CHAPTER 1: Financial Statements and Business Decisions
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j k
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CHAPTER 2: Investing and Financing Decisions and the Accounting System
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CHAPTER 3: Operating Decisions and the Accounting System
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CHAPTER 4: Adjustments, Financial Statements, and the Closing Process
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CHAPTER 5: Communicating and Analyzing Accounting Information
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CHAPTER 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash
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CHAPTER 7: Reporting and Interpreting Cost of Goods Sold and Inventory
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CHAPTER 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural
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j k j k Resources
CHAPTER 9: Reporting and Interpreting Liabilities
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CHAPTER 10: Reporting and Interpreting Bond Securities
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CHAPTER 11: Reporting and Interpreting Stockholders' Equity
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CHAPTER 12: Statement of Cash Flows
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CHAPTER 13: Analyzing Financial Statements
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, Chapter 1 Financial Statements andBusiness jkjk jkjk jkjk jkjk jkjk
Decisions
ANSWERSTOQUESTIONS jk jk
1. Accounting is a system that collects and processes (analyzes, measures, and records) jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk j kj k
financial information about an organization and reports that information to
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decision
j kj k makers. j k j k
2. Financial accounting involves preparation of the four basic financial statements and
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j related disclosures for external decision makers. Managerial accounting involves
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the
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j k j k jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk
internal
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3. Financial reports are used by both internal and external groups and individuals. The
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j 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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j 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 ofjkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk jkjk
j what the company earns and/or selling their ownership interest in the company
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in the future at a higher price than they paid. Creditors lend money to a
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company for a
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the loan.
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j
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, 5. In a society, each organization can be defined as a separate accounting entity. An
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jaccounting entity is the organization for which financial data are to be collected.
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Typical accounting entities are a business, a church, a governmental unit, a
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university
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organization. A
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because the owners, creditors, investors, and other interested parties need to
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evaluate its performance and
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its owners.
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6. Name of Statement jkjk jkjk Alternative Title kjjk
(a) Income Statement k
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Income; Statement of Operations jkjk jkjk jkjk
(b) Balance Sheet k
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j (b) Statement of Financial Position
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(c) Cash Flow Statement jkjk k
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j (c) Statement of Cash Flows jkjk jkjk jkjk jkjk
7. The heading of each of the four required financial statements should include the
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j following:
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(a) Name of the entity jkjk jkjk jkjk
(b) Name of the statement jkjk jkjk jkjk
(c) Date of the statement, or the period of time jkjk jkjk jkjk jkjk jkjk k
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(d) Unit of measure k
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8. (a) The purpose of the income statement is to present information about the
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revenues, expenses, and the net income of an entity for a specified period
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of time.
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(b) The purpose of the balance sheet is to report the financial position of an entity at
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a given date, that is, to report information about the assets, liabilities and
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stockholders’ equity of the entity as of a specific date.
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(c) The purpose of the statement of cash flows is to present information about the
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flow of cash into the entity (sources), the flow of cash out of the entity (uses),
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and the net increase or decrease in cash during the period.
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(d) The statement of stockholders’ equity reports the changes in each of the
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company’s stockholders’ equity accounts during the accounting period,
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including issue and repurchase of stock and the way that net income and
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distribution of dividends affected the retained earnings of the company
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during that period.
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9. The income statement and the statement of cash flows are dated ―For the Year
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Ended December 31‖ because they report the inflows and outflows of
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resources
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―At December 31‖ because it represents the resources, obligations, and
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stockholders’ equity at a
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