Solutions Manual For Financial Accounting 10th Edition By
Robert Libby 9781259964947 ALL Chapters .
Financial statements can be prepared: (3 things) - ANSWER: Monthly, quarterly, annually
True or false: The business entity, and not the owners, are viewed as owning the resources and as
owing the debts of the business. - ANSWER: True
The heading of a balance sheet for a company that has been in business for years and has a June 30,
2011 year end would have: (3 things) - ANSWER: The name of the business
The title "Balance Sheet"
At June 30, 2011
X Company purchased $5000 of supplies on credit. What does this affect and in what way on the
balance sheet? - ANSWER: Result in an increase in Accounts Payable on the balance sheet.
The sum of what two elements equals stockholders' equity? - ANSWER: Retained earnings and
common stock
The three activities used to categorize cash inflows and outflows on the statement of cash flows
includes: - ANSWER: Operating, investing, and financing
Match each user of financial information with the type of decision:
Creditors -
Regulators -
Customers -
Managers - - ANSWER: Creditors - Decide whether to lend money
Regulators - Decide on social welfare issues
Customers - Decide whether to purchase products
Managers - Decide production and expansion
Retained Earnings definition - ANSWER: Profits earned by a company that have not been paid to
stockholders
Net Income = - ANSWER: Revenues - Expenses
Assets are initially recorded at: - ANSWER: Historical cost
What information appears on the statement of stockholders' equity? - ANSWER: Dividends, ending
balance of retained earnings, net income, beginning balance of retained earnings.
At December 31, Equate, Inc.'s assets equal $50,000 and liabilities equal $30,000. Stockholders' equity
must equal: - ANSWER: $20,000
The two sources of stockholders' equity are amounts: - ANSWER: Earned by the corporation and paid
in from shareholders
Equipment, land, and cash are examples of: - ANSWER: Assets
Transaction analysis is based on which two principles? - ANSWER: 1. The accounting equation remains
in balance with each transaction
2. Every transaction affects at least two accounts
, What accounting cycle steps describes the summarizing in ledger accounts? - ANSWER: Dollars
amounts from journal entries are copied (posted) to the appropriate accounts in the ledger, so that
account balances can be totaled.
Assets appear on the ____ side of the accounting equation - ANSWER: Left
What order do the three steps for entering a transaction in a journal go in? - ANSWER: 1. Enter name
of account(s) debited and their amount(s)
2. Enter name of account(s) credited and their amounts(s)
3. Enter explanation
On the balance sheet, contributed capital appears under..? - ANSWER: Stockholders' equity
M Company purchased a $30,000 pizza delivery truck in exchange for a 4-year note. The company
recorded this as a $30,000 debit to the Truck account and a $30,000 credit to Cash. As a result this
entry's: (2 things) - ANSWER: Total liabilities are too low & total assets are too low
The contributed capital account is increased with an entry on the ____ side of the T-account. -
ANSWER: Right
Accounting transactions are classified as which of the following? - ANSWER: External transactions and
internal transactions
Account payable is increased with an entry on the ____ side of the account. - ANSWER: Right
Land, equipment, and buildings would be under which activity on the balance sheet - ANSWER:
Investing
A company made a $1,000 payment on its $100,000, 20-year mortgage. The decrease in liabilities
would be recorded with a ____ to Notes payable. - ANSWER: Debit
1. Mortgage payable (due in 25 years)
2. Note payable (due in 5 years)
3. Note payable (due in five months)
What order should these liability accounts be in on the balance sheet? - ANSWER: 3
2
1
When a business issues stock, what does it give to its owners? - ANSWER: Stock certificates
The beginning balance always is on the _____ side of a T-account - ANSWER: left
A separate account is: - ANSWER: Maintained for each financial position element
A company owns an economic resource that will provide it with future benefits. This economic
resource is: - ANSWER: An asset
MMM Pizza bought $1,500 of cookware on account (i.e., on credit). What is the effect of recording
this transaction on the company's total liabilities? - ANSWER: Total liabilities will increase.
Company X issued 10,000 shares of its $1 par value stock to its owners for $10,000 cash. It recorded
the transaction by increasing assets and increasing liabilities. What would be understated/overstated?
- ANSWER: Liabilities will be overstated and stockholders' equity will be understated.
An external transaction: - ANSWER: Involves an exchange between the company and a separate
economic entity.
Robert Libby 9781259964947 ALL Chapters .
Financial statements can be prepared: (3 things) - ANSWER: Monthly, quarterly, annually
True or false: The business entity, and not the owners, are viewed as owning the resources and as
owing the debts of the business. - ANSWER: True
The heading of a balance sheet for a company that has been in business for years and has a June 30,
2011 year end would have: (3 things) - ANSWER: The name of the business
The title "Balance Sheet"
At June 30, 2011
X Company purchased $5000 of supplies on credit. What does this affect and in what way on the
balance sheet? - ANSWER: Result in an increase in Accounts Payable on the balance sheet.
The sum of what two elements equals stockholders' equity? - ANSWER: Retained earnings and
common stock
The three activities used to categorize cash inflows and outflows on the statement of cash flows
includes: - ANSWER: Operating, investing, and financing
Match each user of financial information with the type of decision:
Creditors -
Regulators -
Customers -
Managers - - ANSWER: Creditors - Decide whether to lend money
Regulators - Decide on social welfare issues
Customers - Decide whether to purchase products
Managers - Decide production and expansion
Retained Earnings definition - ANSWER: Profits earned by a company that have not been paid to
stockholders
Net Income = - ANSWER: Revenues - Expenses
Assets are initially recorded at: - ANSWER: Historical cost
What information appears on the statement of stockholders' equity? - ANSWER: Dividends, ending
balance of retained earnings, net income, beginning balance of retained earnings.
At December 31, Equate, Inc.'s assets equal $50,000 and liabilities equal $30,000. Stockholders' equity
must equal: - ANSWER: $20,000
The two sources of stockholders' equity are amounts: - ANSWER: Earned by the corporation and paid
in from shareholders
Equipment, land, and cash are examples of: - ANSWER: Assets
Transaction analysis is based on which two principles? - ANSWER: 1. The accounting equation remains
in balance with each transaction
2. Every transaction affects at least two accounts
, What accounting cycle steps describes the summarizing in ledger accounts? - ANSWER: Dollars
amounts from journal entries are copied (posted) to the appropriate accounts in the ledger, so that
account balances can be totaled.
Assets appear on the ____ side of the accounting equation - ANSWER: Left
What order do the three steps for entering a transaction in a journal go in? - ANSWER: 1. Enter name
of account(s) debited and their amount(s)
2. Enter name of account(s) credited and their amounts(s)
3. Enter explanation
On the balance sheet, contributed capital appears under..? - ANSWER: Stockholders' equity
M Company purchased a $30,000 pizza delivery truck in exchange for a 4-year note. The company
recorded this as a $30,000 debit to the Truck account and a $30,000 credit to Cash. As a result this
entry's: (2 things) - ANSWER: Total liabilities are too low & total assets are too low
The contributed capital account is increased with an entry on the ____ side of the T-account. -
ANSWER: Right
Accounting transactions are classified as which of the following? - ANSWER: External transactions and
internal transactions
Account payable is increased with an entry on the ____ side of the account. - ANSWER: Right
Land, equipment, and buildings would be under which activity on the balance sheet - ANSWER:
Investing
A company made a $1,000 payment on its $100,000, 20-year mortgage. The decrease in liabilities
would be recorded with a ____ to Notes payable. - ANSWER: Debit
1. Mortgage payable (due in 25 years)
2. Note payable (due in 5 years)
3. Note payable (due in five months)
What order should these liability accounts be in on the balance sheet? - ANSWER: 3
2
1
When a business issues stock, what does it give to its owners? - ANSWER: Stock certificates
The beginning balance always is on the _____ side of a T-account - ANSWER: left
A separate account is: - ANSWER: Maintained for each financial position element
A company owns an economic resource that will provide it with future benefits. This economic
resource is: - ANSWER: An asset
MMM Pizza bought $1,500 of cookware on account (i.e., on credit). What is the effect of recording
this transaction on the company's total liabilities? - ANSWER: Total liabilities will increase.
Company X issued 10,000 shares of its $1 par value stock to its owners for $10,000 cash. It recorded
the transaction by increasing assets and increasing liabilities. What would be understated/overstated?
- ANSWER: Liabilities will be overstated and stockholders' equity will be understated.
An external transaction: - ANSWER: Involves an exchange between the company and a separate
economic entity.
