Accounting: Business Reporting for Decision Making

Description

Accounting: Business Reporting for Decision Making, 6th Edition Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver ISBN: 9780730329886 Accounting: Business Reporting for Decision Making, 6th Edition builds on the success of its previous editions, but now has an enhanced business focus and ensuring key concepts are highlighted through business scenarios. In most chapters, we have used JB Hi-Fi Ltd either as case-study or as a basis for the chapter’s exercises or problems, which provides you with interesting real-world examples designed to support you to critically apply course concepts to real-world contexts. Each chapter contains a series of pre-work, activities and revision learning tools to support your studies and enhance understanding. This is the latest offering from Jacqueline Birt, a Senior Lecturer at the University of Queensland and market-leading Accounting author. This resource is most suitable for introductory accounting units that have a focus on financial decision making in business rather than the preparation of financial reports. It is also highly suited to first-year units in accounting in business degrees, MBA introductory accounting units and accounting service units. ENJOY. Cover......Page 1 Title Page......Page 3 Copyright Page......Page 4 Contents......Page 5 Preface......Page 11 About the authors......Page 14 CHAPTER 1 Introduction to accounting and business decision making......Page 15 1.1 The accounting process......Page 16 1.2 Accounting information and its role in decision making......Page 18 1.3 Financial accounting and management accounting......Page 20 1.4 Role of accounting information in business planning......Page 22 1.6 Sources of company regulation......Page 24 1.7 Australian and international accounting standards......Page 28 1.8 Role of the conceptual framework......Page 31 1.9 Limitations of accounting information......Page 35 1.10 Careers in accounting......Page 37 CHAPTER 2 Accounting in society......Page 67 2.1 Business sustainability, drivers, principles and theories......Page 68 2.2 Reporting and disclosure......Page 72 2.3 Corporate governance......Page 76 2.4 Corporate governance principles, guidelines and practices......Page 78 2.5 Ethics in business......Page 79 2.6 Professional codes of ethics and ethical decision-making methods......Page 84 CHAPTER 3 Business structures......Page 103 3.1 Forms of business entities......Page 104 3.2 Definition and features of a sole trader......Page 105 3.3 Advantages and disadvantages of a sole trader......Page 106 3.5 Advantages and disadvantages of a partnership......Page 108 3.6 Definition and features of a company......Page 110 3.7 Types of companies......Page 111 3.8 Advantages and disadvantages of a company......Page 114 3.10 Advantages and disadvantages of a trust......Page 115 3.11 Comparison of business reports......Page 117 3.12 Differential reporting......Page 123 CHAPTRT 4 Business transactions......Page 138 4.1 Recognising business transactions......Page 139 4.2 Business and personal transactions and business events......Page 140 4.3 The accounting equation......Page 141 4.4 Analysis of business transactions......Page 142 4.5 The accounting worksheet......Page 144 4.6 Capturing accounting information: journals and ledger accounts......Page 147 4.7 Rules of debit and credit......Page 149 4.8 The trial balance......Page 151 4.9 Accounting errors......Page 152 CHAPTER 5 Balance sheet......Page 170 5.1 Financial reporting obligations......Page 171 5.2 Nature and purpose of the balance sheet......Page 173 5.3 Accounting policy choices, estimates and judgements......Page 177 5.4 The definition of assets......Page 179 5.5 The definition of liabilities......Page 181 5.6 The definition and nature of equity......Page 182 5.7 Assets, liabilities and equity......Page 183 5.8 Format and presentation of the balance sheet......Page 184 5.9 Presentation and disclosure of elements on the balance sheet......Page 187 5.10 Measurement of various assets and liabilities......Page 199 5.11 Potential limitations of the balance sheet......Page 207 CHAPTER 6 Statement of profit or loss and statement of changes in equity......Page 230 6.1 Purpose and importance of measuring financial performance......Page 231 6.2 Accounting concepts for financial reporting......Page 233 6.3 Effect of accounting policy choices, estimates and judgements on financial statements......Page 238 6.5 Income......Page 242 6.6 Expenses......Page 243 6.7 Applying recognition criteria to income and expenses......Page 245 6.8 Presenting the statement of profit or loss......Page 249 6.9 Financial performance measures......Page 253 6.10 The statement of comprehensive income......Page 255 6.11 The link between the financial statements......Page 258 CHAPTER 7 Statement of cash flows......Page 279 7.1 The purpose and usefulness of a statement of cash flows......Page 280 7.2 Format of the statement of cash flows......Page 293 7.3 Preparing the statement of cash flows......Page 298 7.4 Analysing the statement of cash flows......Page 307 CHAPTER 8 Analysis and interpretation of financial statements......Page 333 8.1 Users and decision making......Page 334 8.3 Analytical methods......Page 336 8.4 Profitability analysis......Page 346 8.5 Asset efficiency analysis......Page 351 8.6 Liquidity analysis......Page 355 8.7 Capital structure analysis......Page 357 8.8 Market performance analysis......Page 360 8.9 Ratio interrelationships......Page 363 8.10 Limitations of ratio analysis......Page 365 CHAPTER 9 Budgeting......Page 396 9.1 Strategic planning and budgeting......Page 397 9.2 Budgets......Page 399 9.3 Types of budgets......Page 401 9.4 Master budget......Page 402 9.5 The cash budget......Page 409 9.6 Budgets: planning and control......Page 412 9.7 Behavioural aspects of budgeting......Page 414 CHAPTER 10 Cost–volume–profit analysis......Page 434 10.1 Cost behaviour......Page 435 10.2 Break-even analysis......Page 438 10.3 Contribution margin ratio......Page 445 10.5 Using break-even data......Page 446 10.6 Operating leverage......Page 447 10.7 Contribution margin per limiting factor......Page 449 10.8 Relevant information for decision making......Page 450 10.9 Outsourcing decisions......Page 451 10.10 Special order decisions......Page 454 CHAPTER 11 Costing and pricing in an entity......Page 476 11.1 Use of cost information......Page 477 11.2 Direct costs......Page 478 11.3 Cost allocation......Page 480 11.4 Allocation process......Page 484 11.5 Inventoriable product cost......Page 492 11.6 Pricing of products and services......Page 497 CHAPTER 12 Capital investment......Page 514 12.1 The nature and scope of investment decisions......Page 515 12.2 Accounting rate of return......Page 519 12.3 Payback period......Page 520 12.4 Net present value......Page 521 12.5 Internal rate of return......Page 527 12.6 Practical issues in making decisions......Page 530 CHAPTER 13 Financing the business......Page 544 13.1 Managing net working capital......Page 545 13.2 Managing cash......Page 547 13.3 Managing accounts receivable......Page 549 13.4 Managing inventories......Page 552 13.5 Sources of short-term finance......Page 555 13.6 Sources of long-term debt finance......Page 560 13.7 Equity finance......Page 563 13.8 Hybrid finance......Page 565 13.9 International sources of funding......Page 566 CHAPTER 14 Performance measurement......Page 576 14.1 Organisational performance measurement......Page 577 14.2 Divisional performance measurement......Page 583 14.3 Investment centre performance evaluation......Page 588 14.4 Environmental and social performance......Page 594 14.5 Individual performance measurement......Page 599 14.6 Non-financial performance evaluation......Page 601 Appendix......Page 620 EULA......Page 662