Rent 9780324380675 | Financial Accounting | Warren,Carl S. @knetbooks.com

Summary Table of Contents

Understand what accounting is all about and its evolving role in business with Warren and Reeve's FINANCIAL ACCOUNTING, the most successful higher education accounting text of all time. You'll use the preparation of financial statements as a framemark work for understand accounting and concepts and in the rocess you'll see how to use accounting to understand business.

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Introduction to Accounting and Business	p. 1
Nature of Business and Accounting	p. 2
Types of Businesses	p. 3
Types of Business Organizations	p. 3
Business Stakeholders	p. 4
Role of Ethics in Business	p. 4
The Role of Accounting in Business	p. 7
Profession of Accounting	p. 8
Generally Accepted Accounting Principles	p. 10
Business Entity Concept	p. 11
The Cost Concept	p. 11
The Accounting Equation	p. 12
Business Transactions and the Accounting Equation	p. 12
Financial Statements	p. 17
Income Statement	p. 18
Statement of Owner's Equity	p. 19
Balance Sheet	p. 21
Statement of Cash Flows	p. 21
Interrelationships Among Financial Statements	p. 23
Analyzing Transactions	p. 48
Using Accounts to Record Transactions	p. 49
Chart of Accounts	p. 51
Analyzing and Summarizing Transactions in Accounts	p. 51
Normal Balances of Accounts	p. 57
Double-Entry Accounting System	p. 58
Posting Journal Entries to Accounts	p. 59
Trial Balance	p. 72
Discovery and Corrections of Errors	p. 73
Discovery of Errors	p. 73
Correction of Errors	p. 74
The Adjusting Process	p. 103
Nature of the Adjusting Process	p. 104
The Adjusting Process	p. 105
Types of Accounts Requiring Adjustment	p. 105
Recording Adjusting Entries	p. 107
Prepaid Expenses	p. 108
Unearned Revenues	p. 111
Accrued Revenues	p. 112
Accrued Expenses	p. 113
Depreciation Expense	p. 115
Summary of Adjustment Process	p. 116
Adjusted Trial Balance	p. 120
Completing the Accounting Cycle	p. 144
Flow of Accounting Information	p. 145
Financial Statements	p. 147
Income Statement	p. 147
Statement of Owner's Equity	p. 147
Balance Sheet	p. 150
Closing Entries	p. 151
Journalizing and Posting Closing Entries	p. 153
Post-Closing Trial Balance	p. 155
Accounting Cycle	p. 159
Illustration of the Accounting Cycle	p. 161
Analyzing and Recording Transactions in the Journal	p. 162
Posting Transactions to the Ledger	p. 164
Preparing an Unadjusted Trial Balance	p. 164
Assembling and Analyzing Adjustment Data	p. 164
Preparing an Optional End-of-Period Spreadsheet (Work Sheet)	p. 165
Journalizing and Posting Adjusting Entries	p. 165
Preparing an Adjusted Trial Balance	p. 166
Preparing the Financial Statements	p. 166
Journalizing and Posting Closing Entries	p. 168
Preparing a Post-Closing Trial Balance	p. 168
Fiscal Year	p. 174
End-of-Period Spreadsheet (Work Sheet)	p. 175
Unadjusted Trial Balance Columns	p. 175
Adjustments Columns	p. 175
Adjusted Trial Balance Columns	p. 176
Income Statement and Balance Sheet Columns	p. 176
Comprehensive Problem 1	p. 199
Practice Set: Ralph's Painting
Accounting Systems	p. 203
Basic Accounting Systems	p. 204
Manual Accounting Systems	p. 205
Subsidiary Ledgers	p. 205
Special Journals	p. 206
Manual Accounting System: The Revenue and Collection Cycle	p. 208
Manual Accounting System: The Purchase and Payment Cycle	p. 212
Adapting Manual Accounting Systems	p. 217
Additional Subsidiary Ledgers	p. 217
Modified Special Journals	p. 217
Computerized Accounting Systems	p. 218
E-Commerce	p. 222
Accounting for Merchandising Businesses 249
Nature of Merchandising Businesses	p. 250
Financial Statements for a Merchandising Business	p. 252
Multiple-Step Income Statement	p. 252
Single-Step Income Statement	p. 255
Statement of Owner's Equity	p. 255
Balance Sheet	p. 255
Merchandising Transactions	p. 257
Chart of Accounts for a Merchandising Business	p. 257
Sales Transactions	p. 258
Purchase Transactions	p. 263
Transportation Costs, Sales Taxes, and Trade Discounts	p. 265
Dual Nature of Merchandise Transactions	p. 268
The Adjusting and Closing Process	p. 270
Adjusting Entry for Inventory Shrinkage	p. 270
Closing Entries	p. 271
Financial Analysis and Interpretation	p. 272
Accounting Systems for Merchandisers	p. 273
Manual Accounting System	p. 273
Computerized Accounting Systems	p. 274
The Periodic Inventory System	p. 276
Cost of Merchandise Sold Using the Periodic Inventory System	p. 276
Chart of Accounts Under the Periodic Inventory System	p. 276
Recording Merchandise Transactions Under the Periodic Inventory System	p. 277
Adjusting Process Under the Periodic Inventory System	p. 278
Financial Statements Under the Periodic Inventory System	p. 278
Closing Entries Under the Periodic Inventory System	p. 279
Comprehensive Problem 2	p. 303
Practice Set: Tee Time Merchandise
Inventories	p. 307
Control of Inventory	p. 308
Inventory Cost Flow Assumptions	p. 309
Inventory Costing Methods Under a Perpetual Inventory System	p. 312
First-In, First-Out Method	p. 312
Last-In, First-Out Method	p. 313
Average Cost Method	p. 314
Computerized Perpetual Inventory Systems	p. 315
Inventory Costing Methods Under a Periodic Inventory System	p. 315
First-In, First-Out Method	p. 315
Last-In, First-Out Method	p. 316
Average Cost Method	p. 317
Comparing Inventory Costing Methods	p. 318
Use of the First-In, First-Out Method	p. 319
Use of the Last-In, First-Out Method	p. 319
Use of the Average Cost Method	p. 319
Reporting Merchandise Inventory in the Financial Statements	p. 320
Valuation at Lower of Cost or Market	p. 320
Valuation at Net Realizable Value	p. 321
Merchandise Inventory on the Balance Sheet	p. 321
Effect of Inventory Errors on the Financial Statements	p. 322
Estimating Inventory Cost	p. 324
Retail Method of Inventory Costing	p. 324
Gross Profit Method of Estimating Inventories	p. 325
Financial Analysis and Interpretation	p. 326
Sarbanes-Oxley, Internal Control, and Cash	p. 347
Sarbanes-Oxley Act of 2002	p. 348
Internal Control	p. 350
Objectives of Internal Control	p. 350
Elements of Internal Control	p. 351
Control Environment	p. 352
Risk Assessment	p. 353
Control Procedures	p. 353
Monitoring	p. 355
Information and Communication	p. 355
Cash Controls Over Receipts and Payments	p. 357
Control of Cash Receipts	p. 357
Control of Cash Payments	p. 359
Bank Accounts	p. 360
Use of Bank Accounts	p. 360
Bank Statement	p. 360
Bank Accounts as a Control Over Cash	p. 362
Bank Reconciliation	p. 364
Special-Purpose Cash Funds	p. 367
Financial Statement Reporting of Cash	p. 368
Financial Analysis and Interpretation	p. 370
Receivables	p. 393
Classification of Receivables	p. 394
Accounts Receivable	p. 394
Notes Receivable	p. 394
Other Receivables	p. 395
Uncollectible Receivables	p. 395
Direct Write-Off Method for Uncollectible Accounts	p. 396
Allowance Method for Uncollectible Accounts	p. 397
Write-Offs to the Allowance Account	p. 398
Estimating Uncollectibles	p. 399
Comparing Direct Write-Off and Allowance Methods	p. 404
Notes Receivable	p. 405
Characteristics of Notes Receivable	p. 405
Accounting for Notes Receivable	p. 406
Reporting Receivables on the Balance Sheet	p. 408
Financial Analysis and Interpretation	p. 409
Discounting Notes Receivable	p. 410
Fixed Assets and Intangible Assets	p. 434
Nature of Fixed Assets	p. 435
Classifying Costs	p. 435
The Cost of Fixed Assets	p. 436
Capital and Revenue Expenditures	p. 437
Leasing Fixed Assets	p. 439
Accounting for Depreciation	p. 440
Factors in Computing Depreciation Expense	p. 440
Straight-Line Method	p. 442
Units-of-Production Method	p. 442
Double-Declining-Balance Method	p. 443
Comparing Depreciation Methods	p. 444
Depreciation for Federal Income Tax	p. 445
Revising Depreciation Estimates	p. 446
Disposal of Fixed Assets	p. 447
Discarding Fixed Assets	p. 447
Selling Fixed Assets	p. 448
Exchanging Similar Fixed Assets	p. 449
Natural Resources	p. 452
Intangible Assets	p. 453
Patents	p. 453
Copyrights and Trademarks	p. 454
Goodwill	p. 454
Financial Reporting for Fixed Assets and Intangible Assets	p. 456
Financial Analysis and Interpretation	p. 458
Sum-of-the-Years-Digits Depreciation	p. 458
Current Liabilities and Payroll	p. 478
Current Liabilities	p. 479
Accounts Payable	p. 479
Current Portion of Long-Term Debt	p. 480
Short-Term Notes Payable	p. 480
Payroll and Payroll Taxes	p. 482
Liability for Employee Earnings	p. 483
Deductions from Employee Earnings	p. 483
Computing Employee Net Pay	p. 486
Liability for Employer's Payroll Taxes	p. 486
Accounting Systems for Payroll and Payroll Taxes	p. 488
Payroll Register	p. 488
Employee's Earnings Record	p. 491
Payroll Checks	p. 491
Payroll System Diagram	p. 492
Internal Controls for Payroll Systems	p. 493
Employees' Fringe Benefits	p. 495
Vacation Pay	p. 495
Pensions	p. 496
Postretirement Benefits Other Than Pensions	p. 498
Contingent Liabilities	p. 498
Financial Analysis and Interpretation	p. 501
Comprehensive Problem 3	p. 520
Practice Set: Puppy Spa and Supply
Accounting for Partnerships and Limited Liability Companies	p. 525
Proprietorships, Partnerships, and Limited Liability Companies	p. 526
Proprietorships	p. 526
Partnerships	p. 527
Limited Liability Companies	p. 528
Comparing Proprietorships, Partnerships, and Limited Liability Companies	p. 529
Forming and Dividing Income of a Partnership	p. 530
Forming a Partnership	p. 530
Dividing Income	p. 531
Partner Admission and Withdrawal	p. 534
Admitting a Partner	p. 534
Withdrawal of a Partner	p. 538
Death of a Partner	p. 539
Liquidating Partnerships	p. 539
Gain on Realization	p. 540
Loss on Realization	p. 541
Loss on Realization-Capital Deficiency	p. 542
Errors in Liquidation	p. 544
Statement of Partnership Equity	p. 545
Financial Analysis and Interpretation	p. 546
Corporations: Organization, Stock Transactions, and Dividends	p. 567
Nature of a Corporation	p. 568
Characteristics of a Corporation	p. 568
Forming a Corporation	p. 569
Stockholders' Equity	p. 571
Paid-In Capital From Issuing Stock	p. 572
Characteristics of Stock	p. 572
Classes of Stock	p. 572
Issuing Stock	p. 574
Premium on Stock	p. 575
No-Par Stock	p. 576
Accounting for Dividends	p. 578
Cash Dividends	p. 578
Stock Dividends	p. 580
Treasury Stock Transactions	p. 581
Reporting Stockholders' Equity	p. 582
Stockholders' Equity in the Balance Sheet	p. 582
Reporting Retained Earnings	p. 584
Statement of Stockholders' Equity	p. 585
Stock Splits	p. 586
Financial Analysis and Interpretation	p. 587
Income Taxes, Unusual Income Items, and Investments in Stocks	p. 609
Corporate Income Taxes	p. 610
Payment of Income Taxes	p. 610
Allocating Income Taxes	p. 611
Reporting and Analyzing Taxes	p. 613
Reporting Unusual Items on the Income Statement	p. 614
Unusual Items Affecting the Current Period's Income Statement	p. 614
Unusual Items Affecting the Prior Period's Income Statement	p. 618
Earnings per Common Share	p. 619
Comprehensive Income	p. 620
Accounting for Investments in Stocks	p. 622
Short-Term Investments in Stocks	p. 622
Long-Term Investments in Stocks	p. 625
Sale of Investments in Stocks	p. 626
Business Combinations	p. 627
Financial Analysis and Interpretation	p. 628
Practice Set: Casa Bella
Practice Set: Wizard Computer Sales & Services
Bonds Payable and Investments in Bonds	p. 649
Financing Corporations	p. 650
Characteristics, Terminology, and Pricing of Bonds Payable	p. 652
Bond Characteristics and Terminology	p. 652
Pricing of Bonds Payable	p. 653
Accounting for Bonds Payable	p. 657
Bonds Issued at Face Amount	p. 657
Bonds Issued at a Discount	p. 658
Amortizing a Bond Discount	p. 659
Bonds Issued at a Premium	p. 659
Amortizing a Bond Premium	p. 660
Zero-Coupon Bonds	p. 661
Payment and Redemption of Bonds Payable	p. 661
Bond Sinking Funds	p. 662
Bond Redemption	p. 662
Investments in Bonds	p. 663
Accounting for Bond Investments-Purchase, Interest, and Amortization	p. 663
Accounting for Bond Investments-Sale	p. 665
Corporation Balance Sheet	p. 666
Balance Sheet Presentation of Bonds Payable	p. 666
Balance Sheet Presentation of Bond Investments	p. 666
Financial Analysis and Interpretation	p. 668
Effective Interest Rate Method of Amortization	p. 668
Amortization of Discount by the Interest Method	p. 668
Amortization of Premium by the Interest Method	p. 669
Comprehensive Problem 4	p. 686
Statement of Cash Flows	p. 691
Reporting Cash Flows	p. 692
Cash Flows from Operating Activities	p. 693
Cash Flows from Investing Activities	p. 694
Cash Flows from Financing Activities	p. 695
Noncash Investing and Financing Activities	p. 695
No Cash Flow per Share	p. 696
Statement of Cash Flows-The Indirect Method	p. 696
Retained Earnings	p. 697
Cash Flows from Operating Activities-Indirect Method	p. 697
Cash Flows Used for Payment of Dividends	p. 703
Common Stock	p. 703
Bonds Payable	p. 704
Building	p. 704
Land	p. 705
Preparing the Statement of Cash Flows	p. 705
Statement of Cash Flows-The Direct Method	p. 706
Cash Received from Customers	p. 706
Cash Payments for Merchandise	p. 708
Cash Payments for Operating Expenses	p. 709
Gain on Sale of Land	p. 710
Interest Expense	p. 710
Cash Payments for Income Taxes	p. 710
Reporting Cash Flows from Operating Activities-Direct Method	p. 710
Financial Analysis and Interpretation	p. 712
Spreadsheet (Work Sheet) for Statement of Cash Flows-The Indirect Method	p. 712
Analyzing Accounts	p. 713
Retained Earnings	p. 713
Other Accounts	p. 714
Preparing the Statement of Cash Flows	p. 715
Financial Statement Analysis	p. 741
Basic Analytical Procedures	p. 742
Horizontal Analysis	p. 742
Vertical Analysis	p. 745
Common-Size Statements	p. 747
Other Analytical Measures	p. 747
Solvency Analysis	p. 748
Current Position Analysis	p. 748
Accounts Receivable Analysis	p. 750
Inventory Analysis	p. 752
Ratio of Fixed Assets to Long-Term Liabilities	p. 753
Ratio of Liabilities to Stockholders' Equity	p. 754
Number of Times Interest Charges Earned	p. 754
Profitability Analysis	p. 755
Ratio of Net Sales to Assets	p. 755
Rate Earned on Total Assets	p. 756
Rate Earned on Stockholders' Equity	p. 757
Rate Earned on Common Stockholders' Equity	p. 758
Earnings per Share on Common Stock	p. 759
Price-Earnings Ratio	p. 760
Dividends per Share and Dividend Yield	p. 760
Summary of Analytical Measures	p. 761
Corporate Annual Reports	p. 763
Management Discussion and Analysis	p. 763
Report on Adequacy of Internal Control	p. 763
Report on Fairness of Financial Statements	p. 764
Interest Tables	p. A-2
Reversing Entries	p. B-1
End-of-Period Spreadsheet (Work Sheet) for a Merchandising Business	p. C-1
The Williams-Sonoma, Inc., 2005 Annual Report	p. D-1
Glossary	p. G-1
Subject Index	p. I-1
Company Index	p. I-11
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