Solution Manual For Financial Accounting,
7th Canadian Edition by Libby, Hodge,
Kanaan, Sterling Chapters 1 - 13, Complete
1-1
,TABLE OF CONTENTS he he he
CHAPTER ONE he
Financial Statements and Business Decisions
he he he he
CHAPTER TWO he
Investing and Financing Decisions and the Accounting System
he he he he he he he
CHAPTER THREE he
Operating Decisions and the Accounting System
he he he he he
CHAPTER FOUR he
Adjustments, Financial Statements, and the Closing Process
he he he he he he
CHAPTER FIVE he
Reporting and Interpreting Sales Revenue, Receivables, and Cash
he he he he he he he
CHAPTER SIX he
Reporting and Interpreting Cost of Sales and Inventory
he he he he he he he
CHAPTER SEVEN he
Reporting and Interpreting Long-Lived Assets
he he he he
CHAPTER EIGHT he
Reporting and Interpreting Current Liabilities
he he he he
CHAPTER NINE he
Reporting and Interpreting Non-current Liabilities
he he he he
CHAPTER TEN he
Reporting and Interpreting Shareholders' Equity
he he he he
CHAPTER ELEVEN he
Statement of Cash Flows
he he he
CHAPTER TWELVE he
Communicating Accounting Information and Analyzing Financial Statements
he he he he he he
CHAPTER THIRTEEN he
Reporting and Interpreting Investments in Other Corporations
he he he he he he
1-2
,CHAPTER ONE he
Financial Statements and Business Decisions he he he he
ANSWERS TO QUESTIONS he he
1. Accounting is a system that collects and processes (analyzes, measures, and recor
he he he he he he he he he he he
ds) financial information about an organization and reports that information todecisio
he he he he he he he he he he e
h
n makers.
he
2. Financial accounting involves preparation of the four basic financial statements andr
he he he he he he he he he he e
h
elated disclosures for external decision makers. Managerial accounting involves the
he he he he he he he he he he
preparation of detailed plans, budgets, forecasts, and performance reports for intern
he he he he he he he he he he
al decision makers.
he he
3. Financial reports are used by both internal and external groups and individuals. Thein
he he he he he he he he he he he he e
h
ternal groups are comprised of the various managers of the entity. The external group
he he he he he he he he he he he he he
s include the owners, investors, creditors, governmental agencies, other interested p
he he he he he he he he he he
arties, and the public at large. he he he he he
4. Investors purchase all or part of a business and hope to gain by receiving part of what t
he he he he he he he he he he he he he he he he he
he company earns and/or selling the company in the future at a higher price than they
he he he he he he he he he he he he he he he he
paid. Creditors lend money to a company for a specific length of time andhope to gain
he he he he he he he he he he he he he e
h he he he
by charging interest on the loan.
he he he he he
5. In a society each organization can be defined as a separate accounting entity. An acc
he he he he he he he he he he he he he he
ounting entity is the organization for which financial data are to be collected. Typical a
he he he he he he he he he he he he he he
ccounting entities are a business, a church, a governmental unit, a university and oth
he he he he he he he he he he he he he
er nonprofit organizations such as a hospital and a welfare organization. A business t
he he he he he he he he he he he he he
ypically is defined and treated as a separate entity because the owners, creditors, inv
he he he he he he he he he he he he he
estors, and other interested parties need to evaluate its performance and its potential
he he he he he he he he he he he he he
separately from other entities and from itsowners. he he he he he he e
h
6. Name of Statement he he Alternative Title he
1-3
, (a) Income Statement
he (a) Statement of Earnings; Statement of
he he he he he
Income; Statement of Operations
he he he
(b) Balance Sheet he (b) Statement of Financial Position
he he he he
(c) Audit Report
he (c) Report of Independent Accountants
h e he he he
1-4
7th Canadian Edition by Libby, Hodge,
Kanaan, Sterling Chapters 1 - 13, Complete
1-1
,TABLE OF CONTENTS he he he
CHAPTER ONE he
Financial Statements and Business Decisions
he he he he
CHAPTER TWO he
Investing and Financing Decisions and the Accounting System
he he he he he he he
CHAPTER THREE he
Operating Decisions and the Accounting System
he he he he he
CHAPTER FOUR he
Adjustments, Financial Statements, and the Closing Process
he he he he he he
CHAPTER FIVE he
Reporting and Interpreting Sales Revenue, Receivables, and Cash
he he he he he he he
CHAPTER SIX he
Reporting and Interpreting Cost of Sales and Inventory
he he he he he he he
CHAPTER SEVEN he
Reporting and Interpreting Long-Lived Assets
he he he he
CHAPTER EIGHT he
Reporting and Interpreting Current Liabilities
he he he he
CHAPTER NINE he
Reporting and Interpreting Non-current Liabilities
he he he he
CHAPTER TEN he
Reporting and Interpreting Shareholders' Equity
he he he he
CHAPTER ELEVEN he
Statement of Cash Flows
he he he
CHAPTER TWELVE he
Communicating Accounting Information and Analyzing Financial Statements
he he he he he he
CHAPTER THIRTEEN he
Reporting and Interpreting Investments in Other Corporations
he he he he he he
1-2
,CHAPTER ONE he
Financial Statements and Business Decisions he he he he
ANSWERS TO QUESTIONS he he
1. Accounting is a system that collects and processes (analyzes, measures, and recor
he he he he he he he he he he he
ds) financial information about an organization and reports that information todecisio
he he he he he he he he he he e
h
n makers.
he
2. Financial accounting involves preparation of the four basic financial statements andr
he he he he he he he he he he e
h
elated disclosures for external decision makers. Managerial accounting involves the
he he he he he he he he he he
preparation of detailed plans, budgets, forecasts, and performance reports for intern
he he he he he he he he he he
al decision makers.
he he
3. Financial reports are used by both internal and external groups and individuals. Thein
he he he he he he he he he he he he e
h
ternal groups are comprised of the various managers of the entity. The external group
he he he he he he he he he he he he he
s include the owners, investors, creditors, governmental agencies, other interested p
he he he he he he he he he he
arties, and the public at large. he he he he he
4. Investors purchase all or part of a business and hope to gain by receiving part of what t
he he he he he he he he he he he he he he he he he
he company earns and/or selling the company in the future at a higher price than they
he he he he he he he he he he he he he he he he
paid. Creditors lend money to a company for a specific length of time andhope to gain
he he he he he he he he he he he he he e
h he he he
by charging interest on the loan.
he he he he he
5. In a society each organization can be defined as a separate accounting entity. An acc
he he he he he he he he he he he he he he
ounting entity is the organization for which financial data are to be collected. Typical a
he he he he he he he he he he he he he he
ccounting entities are a business, a church, a governmental unit, a university and oth
he he he he he he he he he he he he he
er nonprofit organizations such as a hospital and a welfare organization. A business t
he he he he he he he he he he he he he
ypically is defined and treated as a separate entity because the owners, creditors, inv
he he he he he he he he he he he he he
estors, and other interested parties need to evaluate its performance and its potential
he he he he he he he he he he he he he
separately from other entities and from itsowners. he he he he he he e
h
6. Name of Statement he he Alternative Title he
1-3
, (a) Income Statement
he (a) Statement of Earnings; Statement of
he he he he he
Income; Statement of Operations
he he he
(b) Balance Sheet he (b) Statement of Financial Position
he he he he
(c) Audit Report
he (c) Report of Independent Accountants
h e he he he
1-4
