Financial Accounting: Information for Decisions

Description

"Financial Accounting: Information for Decisions, 4e" addresses the topics and issues typically covered in Financial Accounting while at the same time motivating student interest in accounting through its extensive use of entrepreneurial examples, application of analysis skills, integration of interactive tutorial software, and a highly engaging pedagogical design. This book thoroughly integrates ideas and practices followed by today's business entrepreneurs, speaking more directly to students and better preparing them for the workforce they will enter. Tittle Contents 1 Introducing Accounting in Business Importance of Accounting Users of Accounting Information Opportunities in Accounting Fundamentals of Accounting Ethics—A Key Concept Generally Accepted Accounting Principles Sarbanes-Oxley (SOX) Transaction Analysis and the Accounting Equation Accounting Equation Transaction Analysis Summary of Transactions Financial Statements Income Statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows Decision Analysis—Return on Assets 2 Analyzing and Recording Transactions Analyzing and Recording Process Source Documents The Account and Its Analysis Analyzing and Processing Transactions Ledger and Chart of Accounts Debits and Credits Double-Entry Accounting Journalizing and Posting Transactions Analyzing Transactions—An Illustration Accounting Equation Analysis Trial Balance Preparing a Trial Balance Using a Trial Balance to Prepare Financial Statements Decision Analysis—Debt Ratio 3 Adjusting Accounts and Preparing Financial Statements Timing and Reporting The Accounting Period Accrual Basis versus Cash Basis Recognizing Revenues and Expenses Adjusting Accounts Framework for Adjustments Prepaid (Deferred) Expenses Unearned (Deferred) Revenues Accrued Expenses Accrued Revenues Links to Financial Statements Adjusted Trial Balance Preparing Financial Statements Closing Process Temporary and Permanent Accounts Recording Closing Entries Post-Closing Trial Balance Accounting Cycle Summary Classified Balance Sheet Classification Structure Classification Categories Decision Analysis—Profit Margin and Current Ratio Appendix 3A Alternative Accounting for Prepayments Appendix 3B Work Sheet as a Tool Appendix 3C Reversing Entries 4 Reporting and Analyzing Merchandising Operations Merchandising Activities Reporting Income for a Merchandiser Reporting Inventory for a Merchandiser Operating Cycle for a Merchandiser Inventory Systems Accounting for Merchandise Purchases Trade Discounts Purchase Discounts Purchase Returns and Allowances Transportation Costs and Ownership Transfer Accounting for Merchandise Sales Sales of Merchandise Sales Discounts Sales Returns and Allowances Completing the Accounting Cycle Adjusting Entries for Merchandisers Preparing Financial Statements Closing Entries for Merchandisers Summary of Merchandising Entries Financial Statement Formats Multiple-Step Income Statement Single-Step Income Statement Classified Balance Sheet Decision Analysis—Acid-Test and Gross Margin Ratios Appendix 4A Periodic (and Perpetual) Inventory System Appendix 4B Work Sheet—Perpetual System 5 Reporting and Analyzing Inventories Inventory Basics Determining Inventory Items Determining Inventory Costs Internal Controls and Taking a Physical Count Inventory Costing under a Perpetual System Inventory Cost Flow Assumptions Inventory Costing Illustration Specific Identification First-In, First-Out Last-In, First-Out Weighted Average Financial Statement Effects of Costing Methods Consistency in Using Costing Methods Valuing Inventory at LCM and the Effects of Inventory Errors Lower of Cost of Market Financial Statement Effects of Inventory Errors Decision Analysis—Inventory Turnover and Days’ Sales in Inventory Appendix 5A Inventory Costing under a Periodic System Appendix 5B Inventory Estimation Methods 6 Reporting and Analyzing Cash and Internal Controls Internal Control Purpose of Internal Control Principles of Internal Control Technology and Internal Control Limitations of Internal Control Control of Cash Cash, Cash Equivalents, and Liquidity Control of Cash Receipts Control of Cash Disbursements Banking Activities as Controls Basic Bank Services Bank Statement Bank Reconciliation Decision Analysis—Days’ Sales Uncollected Appendix 6A Documents in a Voucher System Appendix 6B Control of Purchase Discounts 7 Reporting and Analyzing Receivables Accounts Receivable Recognizing Accounts Receivable Valuing Accounts Receivable Estimating Bad Debts Expense Notes Receivable Computing Maturity and Interest Recognizing Notes Receivable Valuing and Settling Notes Disposing of Receivables Selling Receivables Pledging Receivables Decision Analysis—Accounts Receivable Turnover 8 Reporting and Analyzing Long-Term Assets SECTION 1—PLANT ASSETS Cost Determination Land Land Improvements Buildings Machinery and Equipment Lump-Sum Purchase Depreciation Factors in Computing Depreciation Depreciation Methods Partial-Year Depreciation Change in Estimates for Depreciation Reporting Depreciation Additional Expenditures Ordinary Repairs Betterments and Extraordinary Repairs Disposals of Plant Assets Discarding Plant Assets Selling Plant Assets SECTION 2—NATURAL RESOURCES Cost Determination and Depletion Plant Assets Used in Extracting Resources SECTION 3—INTANGIBLE ASSETS Cost Determination and Amortization Types of Intangibles Decision Analysis—Total Asset Turnover Appendix 8A Exchanging Plant Assets 9 Reporting and Analyzing Current Liabilities Characteristics of Liabilities Defining Liabilities Classifying Liabilities Uncertainty in Liabilities Known (Determinable) Liabilities Accounts Payable Sales Taxes Payable Unearned Revenues Short-Term Notes Payable Payroll Liabilities Multi-Period Known Liabilities Estimated Liabilities Health and Pension Benefits Vacation Benefits Bonus Plans Warranty Liabilities Multi-Period Estimated Liabilities Contingent Liabilities Accounting for Contingent Liabilities Reasonably Possible Contingent Liabilities Decision Analysis—Times Interest Earned Ratio Appendix 9A Payroll Reports, Records, and Procedures Appendix 9B Income Taxes 10 Reporting and Analyzing Long-Term Liabilities Basics of Bonds Bond Financing Bond Trading Bond-Issuing Procedures Bond Issuances Issuing Bonds at Par Bond Discount or Premium Issuing Bonds at a Discount Issuing Bonds at a Premium Bond Pricing Bond Retirement Bond Retirement at Maturity Bond Retirement before Maturity Bond Retirement by Conversion Long-Term Notes Payable Installment Notes Mortgage Notes and Bonds Decision Analysis—Debt Features and the Debt-to-Equity Ratio Appendix 10A Present Values of Bonds and Notes Appendix 10B Effective Interest Amortization Appendix 10C Issuing Bonds between Interest Dates Appendix 10D Leases and Pensions 11 Reporting and Analyzing Equity Corporate Form of Organization Characteristics of Corporations Corporate Organization and Management Stockholders of Corporations Basics of Capital Stock Common Stock Issuing Par Value Stock Issuing No-Par Value Stock Issuing Stated Value Stock Issuing Stock for Noncash Assets Dividends Cash Dividends Stock Dividends Stock Splits Preferred Stock Issuance of Preferred Stock Dividend Preference of Preferred Stock Convertible Preferred Stock Callable Preferred Stock Reasons for Issuing Preferred Stock Treasury Stock Purchasing Treasury Stock Reissuing Treasury Stock Retiring Stock Reporting of Equity Statement of Retained Earnings Statement of Stockholders’ Equity Reporting Stock Options Decision Analysis—Earnings per Share, Price-Earnings Ratio, Dividend Yield, and Book Value per Share 12 Reporting and Analyzing Cash Flows Basics of Cash Flow Reporting Purpose of the Statement of Cash Flows Importance of Cash Flows Measurement of Cash Flows Classification of Cash Flows Noncash Investing and Financing Format of the Statement of Cash Flows Preparing the Statement of Cash Flows Cash Flows from Operating Indirect and Direct Methods of Reporting Application of the Indirect Method of Reporting Summary of Adjustments for Indirect Method Cash Flows from Investing Three-Stage Process of Analysis Analysis of Noncurrent Assets Analysis of Other Assets Cash Flows from Financing Three-Stage Process of Analysis Analysis of Noncurrent Liabilities Analysis of Equity Proving Cash Balances Decision Analysis—Cash Flow Analysis Appendix 12A Spreadsheet Preparation of the Statement of Cash Flows Appendix 12B Direct Method of Reporting Operating Cash Flows 13 Analyzing and Interpreting Financial Statements Basics of Analysis Purpose of Analysis Building Blocks of Analysis Information for Analysis Standards for Comparisons Tools of Analysis Horizontal Analysis Comparative Statements Trend Analysis Vertical Analysis Common-Size Statements Common-Size Graphics Ratio Analysis Liquidity and Efficiency Solvency Profitability Market Prospects Summary of Ratios Decision Analysis—Analysis Reporting Appendix 13A Sustainable Income Financial Statement Information A- Appendix B Time Value of Money B- Appendix A Best Buy A- Circuit City A- Apple A- Appendix C Investments and International Operations C Appendix D* Reporting and Analyzing Partnerships Appendix E* Reporting and Preparing Special Journals Glossary G- Credits CR- Index IND- Appendix A Financial Statement Information Appendix B Time Value of Money Appendix C Investments and International Operations Appendix D Reporting and Analyzing Partnerships Appendix E Reporting and Preparing Special Journals Glossary Credits Index Chart of Accounts