Solution Manual For Financial Accounting,
8th 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 sis sa ssystem sthat scollects sand sprocesses s(analyzes, smeasures,
sand srecords) sfinancial sinformation sabout san sorganization sand sreports sthat
sinformation stosdecision smakers.
2. Financial saccounting sinvolves spreparation sof sthe sfour sbasic sfinancial
sstatements sandsrelated sdisclosures sfor sexternal sdecision smakers. sManagerial
saccounting sinvolves sthe spreparation sof sdetailed splans, sbudgets, sforecasts,
sand sperformance sreports sfor sinternal sdecision smakers.
3. Financial sreports sare sused sby sboth sinternal sand sexternal sgroups sand
sindividuals. sThesinternal sgroups sare scomprised sof sthe svarious smanagers sof sthe
sentity. sThe sexternal sgroups sinclude sthe sowners, sinvestors, screditors,
sgovernmental sagencies, sother sinterested sparties, sand sthe spublic sat slarge.
4. Investors spurchase sall sor spart sof sa sbusiness sand shope sto sgain sby sreceiving
spart sof swhat sthe scompany searns sand/or sselling sthe scompany sin sthe sfuture sat
sa shigher sprice sthan sthey spaid. s Creditors slend smoney sto sa scompany sfor sa
sspecific slength sof stime sandshope sto sgain sby scharging sinterest son sthe sloan.
5. In sa ssociety seach sorganization scan sbe sdefined sas sa sseparate saccounting
sentity. sAn saccounting sentity sis sthe sorganization sfor swhich sfinancial sdata sare sto
sbe scollected. sTypical saccounting sentities sare sa sbusiness, sa schurch, sa
sgovernmental sunit, sa suniversity sand sother snonprofit sorganizations ssuch sas sa
shospital sand sa swelfare sorganization. sA sbusiness stypically sis sdefined sand
streated sas sa sseparate s entity sbecause sthe sowners, screditors, sinvestors, sand
sother sinterested sparties sneed sto sevaluate sits sperformance sand sits spotential
sseparately sfrom sother sentities sand sfrom sitssowners.
1-3
, 6. Name sof sStatement Alternative sTitle
(a) Income sStatement (a) s Statement sof sEarnings; sStatement sof
Income; sStatement sof sOperations
(b) Balance sSheet (b) s Statement sof sFinancial sPosition
(c) Audit sReport (c) s Report sof sIndependent sAccountants
1-4
8th 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 sis sa ssystem sthat scollects sand sprocesses s(analyzes, smeasures,
sand srecords) sfinancial sinformation sabout san sorganization sand sreports sthat
sinformation stosdecision smakers.
2. Financial saccounting sinvolves spreparation sof sthe sfour sbasic sfinancial
sstatements sandsrelated sdisclosures sfor sexternal sdecision smakers. sManagerial
saccounting sinvolves sthe spreparation sof sdetailed splans, sbudgets, sforecasts,
sand sperformance sreports sfor sinternal sdecision smakers.
3. Financial sreports sare sused sby sboth sinternal sand sexternal sgroups sand
sindividuals. sThesinternal sgroups sare scomprised sof sthe svarious smanagers sof sthe
sentity. sThe sexternal sgroups sinclude sthe sowners, sinvestors, screditors,
sgovernmental sagencies, sother sinterested sparties, sand sthe spublic sat slarge.
4. Investors spurchase sall sor spart sof sa sbusiness sand shope sto sgain sby sreceiving
spart sof swhat sthe scompany searns sand/or sselling sthe scompany sin sthe sfuture sat
sa shigher sprice sthan sthey spaid. s Creditors slend smoney sto sa scompany sfor sa
sspecific slength sof stime sandshope sto sgain sby scharging sinterest son sthe sloan.
5. In sa ssociety seach sorganization scan sbe sdefined sas sa sseparate saccounting
sentity. sAn saccounting sentity sis sthe sorganization sfor swhich sfinancial sdata sare sto
sbe scollected. sTypical saccounting sentities sare sa sbusiness, sa schurch, sa
sgovernmental sunit, sa suniversity sand sother snonprofit sorganizations ssuch sas sa
shospital sand sa swelfare sorganization. sA sbusiness stypically sis sdefined sand
streated sas sa sseparate s entity sbecause sthe sowners, screditors, sinvestors, sand
sother sinterested sparties sneed sto sevaluate sits sperformance sand sits spotential
sseparately sfrom sother sentities sand sfrom sitssowners.
1-3
, 6. Name sof sStatement Alternative sTitle
(a) Income sStatement (a) s Statement sof sEarnings; sStatement sof
Income; sStatement sof sOperations
(b) Balance sSheet (b) s Statement sof sFinancial sPosition
(c) Audit sReport (c) s Report sof sIndependent sAccountants
1-4
