Solutions for Horngren's
Accounting, Volume 1, 13th
Canadian Edition
Accounting - ANSWERSThe system that measures business activities, processes that information into
reports and financial statements, and communicates the results or findings to decision makers.
Accounting equation - ANSWERSThe most basic tool of accounting: Assets = Liabilities + Equity
Bookepping - ANSWERSA procedural element of accounting; the keeping of the financial records and
the recording of financial information.
Accounting <> Bookepping
Accounting = Total
Bookepping = A portion of the accounting process
Asset - ANSWERSAn economic resource that is expected to be of benefit in the future.
Examples: Cash, Accounts receivable, Note receivable, Land, Prepaid expenses, Equipment,
Furnitures, etc.
Accounts payable - ANSWERSThe oral or implied promise to pay off debts arising from credit
purchases (To buy sth "ON ACCOUNT", "ON CREDIT"). A liability that is backed by the general
reputation and credit standing of the debtor.
Accounts receivable - ANSWERSAn asset; a promise to receive cash in the future from customers to
whom the business has sold goods or services. (To sell sth "ON ACCOUNT", "ON CREDIT").
Liability - ANSWERSAn economic obligation (a debt) payable to an individual or an organization
outside the business.
Examples: Accounts payable, Note payable, Unearned revenue.
Owner's Equity - ANSWERSIn a proprietorship or ownership, the claim of an owner of a business to
the assets of the business. Also called "capital".
, It is the money retained in the company.
Income statement (financial statement) - ANSWERSA list of an entity's revenues, expenses, and net
income or net loss for a specific period. Also called "Statement of earnings" or "Statement of
operations".
REVENUES - EXPENSES
Statement of Owner's Equity - ANSWERSA summary of the changes in owner's equity that have
occurred during a specific period of time, such as a month or a year.
Balance sheet - ANSWERSA list of an entity's assets, liabilities, and owner's equity (proprietorship) or
shareholders' equity (corporation) as a specific date. Also called "Statement of financial position".
Cash flow statement - ANSWERSReports cash receipts and cash payments classified according to the
entity's major activities: operating, investing, and financing. Also called "Statement of Cash Flows".
Business - ANSWERSOne or more individuals selling goods or services with the intent of making a
profit.
Dividends - ANSWERSdistributions of money, stock, or other property that a corporation pays to its
shareholders (stockholders).
Financing accounting - ANSWERSThe branch of accounting that provides information to people
outside the business.
Management accounting - ANSWERSThe branch of accounting that generates information for
internal decision makers of a business.
Financial statements - ANSWERSBusiness documents that report financial information about a
business entity to decision makers, such as "Income statement, Statement of Owner's Equity,
Balance sheet, and Cash flow statement".
External users (of accounting information) - ANSWERSReaders of financial information who do not
work for the business.
Example: Creditors and outside investors, government agencies and the general public.
Accounting, Volume 1, 13th
Canadian Edition
Accounting - ANSWERSThe system that measures business activities, processes that information into
reports and financial statements, and communicates the results or findings to decision makers.
Accounting equation - ANSWERSThe most basic tool of accounting: Assets = Liabilities + Equity
Bookepping - ANSWERSA procedural element of accounting; the keeping of the financial records and
the recording of financial information.
Accounting <> Bookepping
Accounting = Total
Bookepping = A portion of the accounting process
Asset - ANSWERSAn economic resource that is expected to be of benefit in the future.
Examples: Cash, Accounts receivable, Note receivable, Land, Prepaid expenses, Equipment,
Furnitures, etc.
Accounts payable - ANSWERSThe oral or implied promise to pay off debts arising from credit
purchases (To buy sth "ON ACCOUNT", "ON CREDIT"). A liability that is backed by the general
reputation and credit standing of the debtor.
Accounts receivable - ANSWERSAn asset; a promise to receive cash in the future from customers to
whom the business has sold goods or services. (To sell sth "ON ACCOUNT", "ON CREDIT").
Liability - ANSWERSAn economic obligation (a debt) payable to an individual or an organization
outside the business.
Examples: Accounts payable, Note payable, Unearned revenue.
Owner's Equity - ANSWERSIn a proprietorship or ownership, the claim of an owner of a business to
the assets of the business. Also called "capital".
, It is the money retained in the company.
Income statement (financial statement) - ANSWERSA list of an entity's revenues, expenses, and net
income or net loss for a specific period. Also called "Statement of earnings" or "Statement of
operations".
REVENUES - EXPENSES
Statement of Owner's Equity - ANSWERSA summary of the changes in owner's equity that have
occurred during a specific period of time, such as a month or a year.
Balance sheet - ANSWERSA list of an entity's assets, liabilities, and owner's equity (proprietorship) or
shareholders' equity (corporation) as a specific date. Also called "Statement of financial position".
Cash flow statement - ANSWERSReports cash receipts and cash payments classified according to the
entity's major activities: operating, investing, and financing. Also called "Statement of Cash Flows".
Business - ANSWERSOne or more individuals selling goods or services with the intent of making a
profit.
Dividends - ANSWERSdistributions of money, stock, or other property that a corporation pays to its
shareholders (stockholders).
Financing accounting - ANSWERSThe branch of accounting that provides information to people
outside the business.
Management accounting - ANSWERSThe branch of accounting that generates information for
internal decision makers of a business.
Financial statements - ANSWERSBusiness documents that report financial information about a
business entity to decision makers, such as "Income statement, Statement of Owner's Equity,
Balance sheet, and Cash flow statement".
External users (of accounting information) - ANSWERSReaders of financial information who do not
work for the business.
Example: Creditors and outside investors, government agencies and the general public.
