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Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. Gibson, Verified Chapter's 1 - 13 | Complete $17.99   Add to cart

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Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. Gibson, Verified Chapter's 1 - 13 | Complete

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Solution Manual For Financial Statement Analysis, 13th Edition By Charles H. Gibson, Verified Chapter's 1 - 13 | Complete

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  • September 19, 2024
  • 501
  • 2024/2025
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  • Solution Manual For Financial Statement Analysis,
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Solution Manual For Financial Statement Analysis,
13th Edition
By Charles H. Gibson, Verified Chapter's 1 - 13 | Complete

, Chapterm1m Introductio
nmtomFinancialmReporting


QUESTIONS

1- 1. a.
ThemAICPAmismanmorganizationmofmCPAsmthatmpriormtom1973macceptedmth
emprimarymresponsibilitymformthemdevelopmentmofmgenerallymacceptedmacco
untingmprinciples.mTheirmrolemwasmsubstantiallymreducedminm1973mwhenmth
emFinancialmAccountingmStandardsmBoardmwasmestablished.m Theirmrolemw
asmfurthermreducedmwithmthemestablishmentmofmthemPublicmCompanymAcco
untingmOversightmBoardmwasmestablishedminm2002.

b. ThemFinancialmAccountingmStandardsmBoardmreplacedmthemAccountin
gmPrinciplesmBoardmasmthemprimarymrule-
makingmbodymformaccountingmstandards.mItmismanmindependentmorgani
zationmandmincludesmmembersmothermthanmpublicmaccountants.

c. ThemSECmhasmthemauthoritymtomdeterminemgenerallymacceptedmaccountin
gmprinciplesmandmtomregulatemthemaccountingmprofession.mThemSECmhasm
electedmtomleavemmuchmofmthemdeterminationmofmgenerallymacceptedmacc
ountingmprinciplesmtomthemprivatemsector.m ThemFinancialmAccountingmSta
ndardsmBoardmhasmplayedmthemmajormroleminmestablishingmaccountingmst
andardsmsincem1973.m Regulationmofmthemaccountingmprofessionmwasmsu
bstantiallymturnedmovermtomthemPublicmCompanymAccountingmOversightm
Boardminm2002.

1-m2.
Consistencymismobtainedmthroughmthemapplicationmofmthemsamemaccountin
gmprinciplemfrommperiodmtomperiod.m Amchangeminmprinciplemrequiresmstatem
entmdisclosure.

1-m3.
Themconceptmofmhistoricalmcostmdeterminesmthembalancemsheetmvaluationmofmland
.mThemrealizationmconceptmrequiresmthatmamtransactionmneedsmtomoccurmformthempr
ofitmtombemrecognized.

1-m4. a.m Entity e.m Historicalmcost

b. Realization f.m Historicalmcost

c. Materiality g.m Disclosure

d. Conservatism

,1-m5. Entitymconcept

, 1-m6.
Generallymacceptedmaccountingmprinciplesmdomnotmapplymwhenmamfirmmdoesmn
otmappearmtombemamgoingmconcern.m Ifmthemdecisionmismmademthatmthismismnotmam
goingmconcern,mthenmthemusemofmGAAPmwouldmnotmbemappropriate.

1-m7.
Withmthemtimemperiodmassumption,minaccuraciesmofmaccountingmformthementity,ms
hortmofmitsmcompletemlifemspan,maremaccepted.mThemassumptionmismmademthatmth
ementitymcanmbemaccountedmformreasonablymaccuratelymformamparticularmperiodmo
fmtime.m Inmothermwords,mthemdecisionmismmademtomacceptmsomeminaccuracymbec
ausemofmincompleteminformationmaboutmthemfutureminmexchangemformmoremtimely
mreporting.m Themstatementsmaremconsideredmtombemmeaningfulmbecausemmateri

alminaccuraciesmaremnotmacceptable.

1- 8.m m Itmismtruemthatmthemonlymaccuratemwaymtomaccountmformthemsuccessmormfailuremofma
nmentitymismtomaccumulatemallmtransactionsmfrommthemopeningmofmbusinessmuntilm
thembusinessmeventuallymliquidates.m Butmitmismnotmnecessarymthatmthemstatemen
tsmbemcompletelymaccurateminmordermformthemmtombemmeaningful.

1- 9. a. Amyearmthatmendsmwhenmoperationsmarematmamlowmebbmformthemyear.

b. ThemaccountingmtimemperiodmismendedmonmDecemberm31.

c. Amtwelve-
monthmaccountingmperiodmthatmendsmatmthemendmofmammonthmothermthanmD
ecemberm31.
1-10. Money.

1-
11.m m Whenmmoneymdoesmnotmholdmamstablemvalue,mthemfinancialmstatementsmc
anmlosemmuchmofmtheirmsignificance.m Tomthemextentmthatmmoneymdoesmnotmrem
ainmstable,mitmlosesmusefulnessmasmthemstandardmformmeasuringmfinancialmtrans
actions.

1-12.
No.m Theremismamproblemmwithmdeterminingmthemindexminmordermtomadjustmthemst
atements.m Themitemsmthatmaremincludedminmthemindexmmustmbemrepresentative.
mInmaddition,mthempricesmofmitemsmchangembecausemofmvariousmfactors,msuchmas

mquality,mtechnology,mandminflation.




Yes.mAmreasonablemadjustmentmtomthemstatementsmcanmbemmademforminflation.

1-13. False.m Anmarbitrarymwrite-
offmofminventorymcannotmbemjustifiedmundermthemconservatismmconcept.m Themco
nservatismmconceptmcanmonlymbemappliedmwheremtheremaremalternativemmeasur
ementsmandmeachmofmthesemalternativemmeasurementsmhasmreasonablemsuppo

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