Solution Manual For Financial Accounting, 7
b b b b bb
th Canadian Edition by Libby, Hodge, Kanaa
b b b b b bb
n, Sterling Chapters 1 - 13, Complete
b b b b b b
1-1
,TABLE OF CONTENTSb b
CHAPTERbONE
FinancialbStatementsbandbBusinessbDecisions
CHAPTERbTWO
InvestingbandbFinancingbDecisionsbandbthebAccountingbSystem
CHAPTERbTHREE
OperatingbDecisionsbandbthebAccountingbSystem
CHAPTERbFOUR
Adjustments,bFinancialbStatements,bandbthebClosingbProcess
CHAPTERbFIVE
ReportingbandbInterpretingbSalesbRevenue,bReceivables,bandbCash
CHAPTERbSIX
ReportingbandbInterpretingbCostbofbSalesbandbInventory
CHAPTERbSEVEN
ReportingbandbInterpretingbLong-LivedbAssets
CHAPTERbEIGHT
ReportingbandbInterpretingbCurrentbLiabilities
CHAPTERbNINE
ReportingbandbInterpretingbNon-currentbLiabilities
CHAPTERbTEN
ReportingbandbInterpretingbShareholders'bEquity
CHAPTERbELEVEN
StatementbofbCashbFlows
CHAPTERbTWELVE
CommunicatingbAccountingbInformationbandbAnalyzingbFinancialbStatements
CHAPTERbTHIRTEEN
ReportingbandbInterpretingbInvestmentsbinbOtherbCorporations
1-2
,CHAPTER ONE b
Financial Statements and Business Decisions
b b b b
ANSWERS TO QUESTIONS
b b
1. Accountingbisbabsystembthatbcollectsbandbprocessesb(analyzes,bmeasures,bandbreco
b
rds)bfinancialbinformationbaboutbanborganizationbandbreportsbthatbinformationbtobdeci
sionbmakers.
2. Financialbaccountingbinvolvesbpreparationbofbthebfourbbasicbfinancialbstatementsbandb
relatedbdisclosuresbforbexternalbdecisionbmakers.bManagerialbaccountingbinvolvesbth
ebpreparationbofbdetailedbplans,bbudgets,bforecasts,bandbperformancebreportsbforbinte
rnalbdecisionbmakers.
3. Financialbreportsbarebusedbbybbothbinternalbandbexternalbgroupsbandbindividuals.bThebi
nternalbgroupsbarebcomprisedbofbthebvariousbmanagersbofbthebentity.bThebexternalbgro
upsbincludebthebowners,binvestors,bcreditors,bgovernmentalbagencies,botherbintereste
dbparties,bandbthebpublicbatblarge.
4. Investorsbpurchaseballborbpartbofbabbusinessbandbhopebtobgainbbybreceivingbpartbofbwh
atbthebcompanybearnsband/orbsellingbthebcompanybinbthebfuturebatbabhigherbpricebthan
btheybpaid.bCreditorsblendbmoneybtobabcompanybforbabspecificblengthbofbtimebandbhope
btobgainbbybchargingbinterestbonbthebloan.
5. Inbabsocietybeachborganizationbcanbbebdefinedbasbabseparatebaccountingbentity.bAnbac
countingbentitybisbtheborganizationbforbwhichbfinancialbdatabarebtobbebcollected.bTypica
lbaccountingbentitiesbarebabbusiness,babchurch,babgovernmentalbunit,babuniversitybandb
otherbnonprofitborganizationsbsuchbasbabhospitalbandbabwelfareborganization.bAbbusin
essbtypicallybisbdefinedbandbtreatedbasbabseparatebentitybbecausebthebowners,bcredito
rs,binvestors,bandbotherbinterestedbpartiesbneedbtobevaluatebitsbperformancebandbitsbp
otentialbseparatelybfrombotherbentitiesbandbfrombitsbowners.
1-3
, 6. NamebofbStatement AlternativebTitle
(a) IncomebStatement (a)bStatementbofbEarnings;bStatementbof
Income;bStatementbofbOperations
(b) BalancebSheet (b)bStatementbofbFinancialbPosition
(c) AuditbReport (c)b ReportbofbIndependentbAccountants
1-4
b b b b bb
th Canadian Edition by Libby, Hodge, Kanaa
b b b b b bb
n, Sterling Chapters 1 - 13, Complete
b b b b b b
1-1
,TABLE OF CONTENTSb b
CHAPTERbONE
FinancialbStatementsbandbBusinessbDecisions
CHAPTERbTWO
InvestingbandbFinancingbDecisionsbandbthebAccountingbSystem
CHAPTERbTHREE
OperatingbDecisionsbandbthebAccountingbSystem
CHAPTERbFOUR
Adjustments,bFinancialbStatements,bandbthebClosingbProcess
CHAPTERbFIVE
ReportingbandbInterpretingbSalesbRevenue,bReceivables,bandbCash
CHAPTERbSIX
ReportingbandbInterpretingbCostbofbSalesbandbInventory
CHAPTERbSEVEN
ReportingbandbInterpretingbLong-LivedbAssets
CHAPTERbEIGHT
ReportingbandbInterpretingbCurrentbLiabilities
CHAPTERbNINE
ReportingbandbInterpretingbNon-currentbLiabilities
CHAPTERbTEN
ReportingbandbInterpretingbShareholders'bEquity
CHAPTERbELEVEN
StatementbofbCashbFlows
CHAPTERbTWELVE
CommunicatingbAccountingbInformationbandbAnalyzingbFinancialbStatements
CHAPTERbTHIRTEEN
ReportingbandbInterpretingbInvestmentsbinbOtherbCorporations
1-2
,CHAPTER ONE b
Financial Statements and Business Decisions
b b b b
ANSWERS TO QUESTIONS
b b
1. Accountingbisbabsystembthatbcollectsbandbprocessesb(analyzes,bmeasures,bandbreco
b
rds)bfinancialbinformationbaboutbanborganizationbandbreportsbthatbinformationbtobdeci
sionbmakers.
2. Financialbaccountingbinvolvesbpreparationbofbthebfourbbasicbfinancialbstatementsbandb
relatedbdisclosuresbforbexternalbdecisionbmakers.bManagerialbaccountingbinvolvesbth
ebpreparationbofbdetailedbplans,bbudgets,bforecasts,bandbperformancebreportsbforbinte
rnalbdecisionbmakers.
3. Financialbreportsbarebusedbbybbothbinternalbandbexternalbgroupsbandbindividuals.bThebi
nternalbgroupsbarebcomprisedbofbthebvariousbmanagersbofbthebentity.bThebexternalbgro
upsbincludebthebowners,binvestors,bcreditors,bgovernmentalbagencies,botherbintereste
dbparties,bandbthebpublicbatblarge.
4. Investorsbpurchaseballborbpartbofbabbusinessbandbhopebtobgainbbybreceivingbpartbofbwh
atbthebcompanybearnsband/orbsellingbthebcompanybinbthebfuturebatbabhigherbpricebthan
btheybpaid.bCreditorsblendbmoneybtobabcompanybforbabspecificblengthbofbtimebandbhope
btobgainbbybchargingbinterestbonbthebloan.
5. Inbabsocietybeachborganizationbcanbbebdefinedbasbabseparatebaccountingbentity.bAnbac
countingbentitybisbtheborganizationbforbwhichbfinancialbdatabarebtobbebcollected.bTypica
lbaccountingbentitiesbarebabbusiness,babchurch,babgovernmentalbunit,babuniversitybandb
otherbnonprofitborganizationsbsuchbasbabhospitalbandbabwelfareborganization.bAbbusin
essbtypicallybisbdefinedbandbtreatedbasbabseparatebentitybbecausebthebowners,bcredito
rs,binvestors,bandbotherbinterestedbpartiesbneedbtobevaluatebitsbperformancebandbitsbp
otentialbseparatelybfrombotherbentitiesbandbfrombitsbowners.
1-3
, 6. NamebofbStatement AlternativebTitle
(a) IncomebStatement (a)bStatementbofbEarnings;bStatementbof
Income;bStatementbofbOperations
(b) BalancebSheet (b)bStatementbofbFinancialbPosition
(c) AuditbReport (c)b ReportbofbIndependentbAccountants
1-4
