Rent 9780139159190 | Financial Accounting with Brochure(s) | Walter T. Harrison; Charles T. Horngren @knetbooks.com

Summary Table of Contents

Significantly shorterfrom 19 chapters to 13, and 922 pages to 816. Integration of all financial statements throughout, including statement of cash flows. New custom videos and Internet exercises. Dual approach; preparation of financial information, and managers use of that information.

CHAPTER 1 Summarizing Business Activity and Using the Financial Statements

(48)

Operating, Investing, and Financing Activities

(2)

... MORE

Managerial Decisions

(1)

Investor Decisions

(1)

Accounting--The Basis of Decision Making

(5)

The Users of Accounting Information

(1)

Financial and Management Accounting

(1)

Ethical Considerations in Accounting and Business

(1)

Types of Business Organizations

(2)

Accounting and Computers

(1)

Accounting Principles and Concepts

(3)

The Entity Concept

(1)

The Reliability (or Objectivity) Principle

(1)

The Cost Principle

(1)

The Going-Concern Concept

(1)

The Stable-Monetary-Unit Concept

(1)

The Accounting Equation

(2)

Assets and Liabilities

(1)

Owner's Equity

(1)

The Financial Statements

(8)

Income Statement (Statement of Operations)

(1)

Statement of Retained Earnings

(1)

Balance Sheet

(3)

Statement of Cash Flows

(2)

Relationships Among the Financial Statements

(2)

Summary Problem

(16)

APPENDIX: Accounting's Role in Business

(1)

Accounting's Relationship to the Other Areas of Business

(2)

How Owners and Managers Use Accounting

(1)

How Lenders and Investors Use Accounting

(1)

Private Accounting

(1)

Public Accounting

(2)

Accounting Today

(3)

CHAPTER 2 Processing Accounting Information

(56)

The Account

(2)

Assets

(1)

Liabilities

(1)

Stockholders' (Owners') Equity

(1)

Accounting for Business Transactions

(7)

Business Transactions and the Financial Statements

(3)

Mid-Chapter Summary Problem

(2)

Double-Entry Accounting

(3)

The T-Account

(1)

Increases and Decreases in the Accounts

(2)

Additional Stockholders' Equity Accounts: Revenues and Expenses

(1)

Recording Transactions in the Journal

(8)

Transferring Information (Posting) from the Journal to the Ledger

(1)

The Flow of Accounting Data: Putting Theory into Practice

(3)

Accounts after Posting

(1)

The Trial Balance

(3)

Correcting Accounting Errors

(1)

Using Journals, Ledgers, and Posting to Trace Information

(2)

Chart of Accounts

(2)

The Normal Balance of an Account

(1)

Four-Column Account Format

(1)

Using Accounting Information for Quick Decision Making

(2)

Summary Problem

(22)

APPENDIX TO CHAPTER 2: Typical Charts of Accounts for Different Types of Businesses

103

(2)

CHAPTER 3 Accrual Accounting and the Financial Statements

105

(64)

Accrual-Basis Accounting Versus Cash-Basis Accounting

108

(4)

The Time-Period Concept

109

(1)

The Revenue Principle

110

(1)

The Matching Principle

111

(1)

Adjusting Entries

112

(13)

Prepaid Expenses

113

(3)

Depreciation of Plant Assets

116

(4)

Accured Revenues

120

(1)

Unearned Revenues

121

(1)

Summary of the Adjusting Process

122

(3)

The Adjusted Trial Balance

125

(1)

Preparing the Financial Statements from the Adjusted Trial Balance

126

(2)

Relationships Among the Financial Statements

127

(1)

Mid-Chapter Summary Problem

128

(3)

Ethical Issues in Accrual Accounting

131

(1)

Closing the Accounts

132

(4)

Postclosing Trial Balance

136

(1)

Correcting Accounting Errors

136

(1)

Detailed Classification of Assets and Liabilities

137

(4)

Analyzing the Financial Statements of Hawaiian Airlines, Inc.

138

(3)

Different Formats for Financial Statements

141

(1)

Balance Sheet Formats

141

(1)

Income Statement Formats

142

(1)

Use of Accounting Information in Decision Making: Accounting Ratios

142

(4)

Current Ration

143

(1)

Debt Ratio

143

(2)

Application: Should a Bank Grant a Loan to Hawaiian Airlines?

145

(1)

Summary Problem

146

(22)

APPENDIX TO CHAPTER 3: Accounting Work Sheet

168

(1)

CHAPTER 4 Internal Control and Managing Cash

169

(50)

Internal Control

172

(5)

Establishing an Effective System of Internal Control

172

(5)

The Limitations of Internal Control

177

(1)

Using the Bank Account as a Control Device

177

(9)

The Bank Reconciliation

179

(6)

How Managers and Owners Use the Bank Reconciliation

185

(1)

Mid-Chapter Summary Problem

186

(1)

The Operating Cycle of a Business

187

(1)

Managing Cash

188

(1)

Speeding the Collection of Cash from Sales

188

(1)

Internal Control over Cash Receipts

189

(3)

Internal Control over Cash Disbursements (Payments)

192

(3)

Controls over Payment by Check

192

(2)

Controlling Petty Cash Disbursements

194

(1)

Using a Budget to Manage Cash

195

(2)

Reporting Cash on the Balance Sheet

197

(1)

Ethics and Accounting

198

(1)

Corporate and Professional Codes of Ethics

198

(1)

Ethical Issues in Accounting

199

(2)

Ethics and External Controls

201

(1)

Summary Problem

201

(18)

CHAPTER 5 Accounting for Short-Term Investments and Receivables

219

(42)

Some Basic Terminology

222

(1)

Short-Term Investments (Marketable Securities)

222

(5)

Held-to-Maturity Securities

223

(1)

Trading Securities

224

(3)

Available-for-Sale Securities

227

(1)

Mid-Chapter Summary Problem

227

(1)

Accounts and Notes Receivable

228

(3)

The Different Types of Receivables

228

(1)

Establishing Internal Control over the Collection of Receivables

229

(2)

Managing the Collection of Receivables: The Credit Department

231

(1)

Uncollectible Accounts (Bad Debts)

231

(5)

Measuring Uncollectible Accounts

231

(1)

Estimating Uncollectibles

232

(2)

Writing Off Uncollectible Accounts

234

(1)

Using the Percentage of Sales and the Aging Methods Together

235

(1)

The Direct Write-Off Method

236

(1)

Credit-Card Sales

236

(1)

Notes Receivable

237

(4)

Accounting for Notes Receivable

238

(1)

Using Receivables to Finance Operations

239

(2)

Contingent Liabilities on Discounted Notes Receivable

241

(1)

Using Accounting Information for Decision Making

241

(2)

Acid-Test (or Quick) Ratio

241

(1)

Days' Sales in Receivables

242

(1)

Relating Short-Term Investments and Receivables to the Statement of Cash Flows

243

(2)

Summary Problem

245

(16)

CHAPTER 6 Accounting for Merchandise Inventory, Cost of Goods Sold, and the Gross Margin

261

(58)

The Basic Concept of Inventory Accounting

264

(1)

Inventory Systems

264

(5)

Perpetual Inventory System

265

(1)

Periodic Inventory System

266

(3)

Cost of Goods Sold (Cost of Sales) and Gross Margin (Gross Profit)

269

(1)

How Managers Use the Cost-of-Goods-Sold Model

269

(1)

How Investors and Creditors Use the Cost-of-Goods-Sold Model

270

(1)

Gross Margin (Gross Profit)

270

(1)

Computing the Cost of Inventory

270

(1)

Inventory Costing Methods

271

(2)

Income Effects of FIFO, LIFO, and Weighted-Average Cost

273

(1)

The Income Tax Advantage of LIFO

273

(1)

GAAP and Practical Considerations: A Comparison of Inventory Methods

274

(2)

Mid-Chapter Summary Problem

276

(1)

Perpetual Inventory Records Under FIFO, LIFO, and Weighted-Average Costing

277

(2)

Accounting Principles and Their Relevance to Inventories

279

(2)

Consistency Principle

279

(1)

Disclosure Principle

279

(1)

Materiality Concept

280

(1)

Accounting Conservatism

280

(1)

Lower-of-Cost-or-Market Rule

280

(1)

Effects of Inventory Errors

281

(1)

Ethical Issues in Inventory Accounting

282

(2)

Estimating Inventory

284

(1)

Gross Margin (Gross Profit) Method

284

(1)

Analyzing Financial Statements-Use of Accounting Information in Decision Making

285

(1)

Gross Margin Percentage

285

(1)

Inventory Turnover

285

(1)

Internal Control over Inventory

286

(2)

Reporting Inventory Transactions on the Statement of Cash Flows

288

(1)

Decision Guidelines

288

(1)

Summary Problem

289

(20)

APPENDIX A TO CHAPTER 6: Details of Recording Inventory Transactions in a Perpetual Accounting System

309

(7)

The Purchase Invoice: A Basic Business Document

309

(1)

Discounts from Purchase Prices

309

(2)

Purchase Returns and Allowances

311

(1)

Transportation Costs

312

(1)

Alternative Procedures for Purchase Discounts, Returns and Allowances, and Transportation Costs

313

(1)

Sale of Inventory and Cost of Goods Sold

313

(1)

Sales Discounts and Sales Returns and Allowances

314

(2)

APPENDIX B TO CHAPTER 6: Analyzing Financial Statements--Converting a LIFO Company's Income to the FIFO Basis

316

(3)

CHAPTER 7 Accounting for Plant Assets, Intangible Assets, and Related Expenses

319

(46)

Types of Assets

322

(1)

Measuring the Cost of Plant Assets

322

(5)

Land

323

(1)

Buildings

323

(1)

Machinery and Equipment

323

(1)

Land and Leasehold Improvements

324

(1)

Construction in Progress and Capital Leases

324

(1)

Capitalizing the Cost of Interest

324

(2)

Lump-Sum (or Basket) Purchases of Assets

326

(1)

Measuring the Depreciation of Plant Assets

327

(6)

The Causes of Depreciation

328

(1)

Measuring Depreciation

328

(1)

Depreciation Methods

328

(4)

Comparing the Depreciation Methods

332

(1)

Mid-Chapter Summary Problem

333

(1)

The Relationship Between Depreciation and Income Taxes

334

(2)

Depreciation for Partial Years

336

(1)

Changing the Useful Life of a Depreciable Asset

337

(1)

Using Fully Depreciated Assets

338

(1)

Disposal of Plant Assets

338

(4)

Selling a Plant Asset

339

(2)

Exchanging Plant Assets

341

(1)

Internal Control of Plant Assets

341

(1)

Accounting for Natural Resources and Depletion

342

(1)

Accounting for Intangible Assets and Amortization

343

(3)

Capital Expenditures Versus Revenue Expenditures

346

(1)

Ethical Issues in Accounting for Plant Assets and Intangibles

347

(1)

Reporting Plant Asset Transactions on the Statement of Cash Flows

348

(2)

Summary Problems

350

(15)

CHAPTER 8 Accounting for Current and Long-Term Liabilites

365

(52)

Current Liabilities of Known Amount

368

(7)

Accounts Payable

368

(1)

Short-Term Notes Payable

368

(1)

Short-Term Notes Payable Issued at a Discount

369

(2)

Sales Tax Payable

371

(1)

Current Portion of Long-Term Debt

372

(1)

Accrued Expenses (Accrued Liabilities)

373

(1)

Payroll Liabilities

373

(1)

Unearned Revenues

374

(1)

Current Liabilities That Must Be Estimated

375

(2)

Estimated Warranty Payable

375

(1)

Estimated Vacation Pay Liability

376

(1)

Contingent Liabilities

377

(1)

Mid-Chapter Summary Problem

378

(1)

Financing Operations with Long-Term Debt

379

(1)

Bonds: An Introduction

379

(3)

Types of Bonds

380

(1)

Bond Prices

380

(1)

Present Value

381

(1)

Bond Interest Rates

382

(1)

Issuing Bonds Payable to Borrow Money

382

(9)

Issuing Bonds and Notes Payable Between Interest Dates

383

(1)

Issuing Bonds Payable at a Discount

384

(1)

Effective-Interest Method of Debt Amortization

385

(3)

Issuing Bonds Payable at a Premium

388

(2)

Straight-Line Amortization of Bond Discount and Bond Premium

390

(1)

Early Retirement of Bonds Payable

391

(2)

Convertible Bonds and Notes

392

(1)

Advantages of Financing Operations with Bonds Versus Stock

393

(1)

Lease Liabilities

394

(3)

Operating Leases

394

(1)

Capital Leases

395

(2)

Off-Balance-Sheet Financing

397

(1)

Pension Liabilities

398

(1)

Postretirement Benefits Liabilities

398

(1)

Reporting Current and Long-Term Liabilities on the Balance Sheet

399

(1)

Reporting Financing Activities on the Statement of Cash Flows

400

(1)

Summary Problem

401

(16)

CHAPTER 9 Measuring and Reporting Stockholders' Equity

417

(50)

Corporations: An Overview

420

(3)

Characteristics of a Corporation

420

(1)

Organization of a Corporation

421

(1)

Stockholders' Rights

422

(1)

Stockholders' Equity: Paid-In Capital and Retained Earnings

422

(1)

Classes of Stock

423

(2)

Common and Preferred Stock

424

(1)

Par-Value and No-Par Stock

425

(1)

Issuing Stock

425

(6)

Issuing Common Stock

426

(3)

Issuing Preferred Stock

429

(1)

Accounting for Preferred Stock Conversions

430

(1)

Ethical Considerations in Accounting for the Issuance of Stock

431

(1)

Donations Received by a Corporation

431

(1)

Mid-Chapter Summary Problems

432

(1)

Treasury Stock

433

(3)

Purchase of Treasury Stock

433

(1)

Sale of Treasury Stock

434

(1)

Treasury Stock Transactions: A Summary

435

(1)

Retirement of Stock

436

(1)

Retained Earnings and Dividends

436

(4)

Dividends and Dividend Dates

438

(1)

Dividends on Preferred and Common Stock

438

(1)

Dividends on Cumulative and Noncumulative Preferred Stock

439

(1)

Stock Dividends

440

(3)

Reasons for Stock Dividends

440

(1)

Recording Stock Dividends

441

(2)

Stock Splits

443

(1)

Similarities and Differences between Stock Dividends and Stock Splits

444

(1)

Different Values of Stock

444

(3)

Market Value

445

(1)

Redemption Value

445

(1)

Liquidation Value

445

(1)

Book Value

446

(1)

Evaluating Operations: Rate of Return on Total Assets and Rate of Return on Common Stockholders' Equity

447

(2)

Return on Assets

447

(1)

Return on Equity

448

(1)

Reporting Stockholders' Equity Transactions on the Statement of Cash Flows

449

(1)

Summary Problem

450

(17)

CHAPTER 10 Accounting for Long-Term Investments and International Operations

467

(48)

Accounting for Long-Term Investments

470

(1)

Stock Investments: A Review

470

(2)

Stock Prices

470

(1)

Investors and Investees

471

(1)

Classifying Stock Investments

471

(1)

Stock Investments

472

(1)

Accounting for Available-for-Sale Investments

472

(3)

Reporting Available-for-Sale Investments at Current Market Value

473

(1)

Selling an Available-for-Sale Investment

474

(1)

Accounting for Equity-Method Investments

475

(2)

Joint Ventures--Accounted for by the Equity Method

477

(1)

Accounting for Consolidated Subsidiaries

477

(6)

Consolidated Balance Sheet--Parent Corporation Owns All of Subsidiary's Stock

478

(2)

Parent Corporation Buys Subsidiary's Stock and Pays for Goodwill

480

(1)

Consolidated Balance Sheet--Parent Company Owns Less than 100% of Subsidiary's Stock

481

(1)

Income of a Consolidated Entity

482

(1)

Computers and Consolidations

483

(1)

Long-Term Investments in Bonds and Notes

483

(2)

Accounting for Held-to-Maturity Investments--The Amortized Cost Method

483

(2)

Summary of Accounting Methods

485

(1)

Mid-Chapter Summary Problems

485

(2)

Accounting for International Operations

487

(1)

Economic Structures and Their Impact on International Accounting

487

(5)

Foreign Currencies and Foreign-Currency Exchange Rates

488

(1)

Managing Cash in International Transactions

489

(3)

Consolidation of Foreign Subsidiaries

492

(3)

International Accounting Standards

494

(1)

Using the Statement of Cash Flows to Interpret a Company's Investing Activities

495

(2)

Summary Problem

497

(18)

CHAPTER 11 Using the Income Statement and the Financial Statement Notes: Additional Corporate Reporting Issues

515

(66)

Quality of Earnings--Analyzing a Corporate Income Statement

518

(8)

Continuing Operations

519

(3)

Discontinued Operations

522

(1)

Extraordinary Gains and Losses (Extraordinary Items)

523

(1)

Cumulative Effect of a Change in Accounting Principle

523

(1)

Earnings per Share (EPS)

524

(2)

Combined Statement of Income and Retained Earnings

526

(1)

Accounting for the Income Tax of a Corporation

526

(5)

Prior-Period Adjustments

529

(1)

Restrictions on Retained Earnings

530

(1)

Mid-Chapter Summary Problem

531

(2)

Analyzing the Statement of Stockholders' Equity

533

(3)

Explaining the Items Reported on a Statement of Stockholders' Equity

533

(3)

Interpreting Notes to the Financial Statements

536

(4)

Summary of Significant Accounting Policies

536

(2)

Acquisitions and Dispositions

538

(1)

Pensions

538

(1)

Long-Term Debt

538

(2)

Reporting on the Different Segments of a Business

540

(2)

Reporting for Interim Periods (Shorter than One Year)

542

(1)

Management Responsibility for the Financial Statements

543

(4)

Auditor's Report on the Financial Statements

545

(2)

Summary Problem

547

(34)

CHAPTER 12 Preparing and Using the Statement of Cash Flows

581

(62)

The Statement of Cash Flows: Basic Concepts

584

(1)

Overview of the Statement of Cash Flows

585

(1)

Cash and Cash Equivalents

585

(1)

Operating, Investing, and Financing Activities

585

(3)

Interest and Dividends

587

(1)

Format of the Statement of Cash Flows

588

(1)

Preparing the Statement of Cash Flows: The Direct Method

589

(4)

Cash Flows from Operating Activities

590

(1)

Cash Flows from Investing Activities

591

(1)

Cash Flows from Financing Activities

592

(1)

Mid-Chapter Summary Problem

593

(1)

Computing Individual Amounts for the Statement of Cash Flows

594

(9)

Computing the Cash Amounts of Operating Activities

595

(4)

Computing the Cash Amounts of Investing Activites

599

(2)

Computing the Cash Amounts of Financing Activities

601

(2)

Noncash Investing and Financing Activities

603

(1)

Reconciling Net Income to Net Cash Flow from Operating Activities

604

(1)

Preparing the Statement of Cash Flows: The Indirect Method

605

(5)

Logic Behind the Indirect Method

607

(1)

Nike's Statement of Cash Flows for Operating Activities--An Application of the Indirect Method

608

(2)

Computers and the Indirect Method of Generating the Statement of Cash Flows

610

(1)

Using Cash-Flow Information in Investment and Credit Analysis

610

(2)

Measuring Cash Adequacy--Free Cash Flow

612

(1)

Summary Problem

612

(21)

APPENDIX TO CHAPTER 12: The Work Sheet Approach to Preparing the Statement of Cash Flows

633

(1)

Preparing the Work Sheet--Direct Method for Operating Activities

634

(3)

Transaction Analysis on the Work Sheet

636

(1)

Preparing the Work Sheet--Indirect Method for Operating Activities

637

(6)

Transaction Analysis Under the Indirect Method

637

(6)

CHAPTER 13 Financial Statement Analysis for Decision Making

643

(50)

Financial Statement Analysis

646

(1)

The Objectives of Financial Statement Analysis

646

(1)

Horizontal Analysis

647

(3)

Trend Percentages

648

(2)

Vertical Analysis

650

(2)

Common-Size Statements

652

(1)

Benchmarking

653

(2)

Benchmarking Against the Industry Average

653

(1)

Benchmarking Against a Key Competitor

654

(1)

Using the Statement of Cash Flows in Decision Making

655

(2)

Mid-Chapter Summary Problem

657

(1)

Using Ratios to Make Business Decisions

658

(14)

Measuring a Company's Ability to Pay Current Liabilities

660

(4)

Measuring a Company's Ability to Sell Inventory and Collect Receivables

664

(3)

Measuring a Company's Ability to Pay Long-Term Debt

667

(1)

Measuring a Company's Profitability

668

(3)

Analyzing a Company's Stock as an Investment

671

(1)

Limitations of Financial Analysis: The Complexity of Business Decisions

672

(1)

Economic Value Added--A New Measure of Performance

673

(1)

Efficient Markets, Management Action, and Investor Decisions

673

(1)

Summary Problem

674

(19)

APPENDIX A The Annual Report of Lands' End, Inc.

693

(27)

APPENDIX B Time Value of Money: Future Value and Present Value

720

(9)

Future Value

720

(3)

Present Value

723

(4)

Capital Leases

727

(1)

Appendix Problems

727

(2)

APPENDIX C Summary of Generally Accepted Accounting Principles (GAAP)

729

(2)

APPENDIX D Accounting for Partnerships

731

(17)

Different Types of Partnerships

731

(1)

Characteristics of a Partnership

732

(1)

Initial Investments by Partners

733

(1)

Sharing Partnership Profits and Losses

734

(2)

Partner Drawings

736

(1)

Admission of a Partner

737

(2)

Withdrawal of a Partner

739

(2)

Death of a Partner

741

(1)

Liquidation of a Partnership

741

(2)

Partnership Financial Statements

743

(5)

APPENDIX E Modern Accounting Information Systems

748

(7)

A Comparison of Computerized and Manual Accounting Systems

748

(4)

Integrated Accounting Software

752

(1)

Overview of an Accounting Information System

753

(2)

APPENDIX F Special Accounting Journals

755

(13)

Proving the Ledgers

764

(4)

APPENDIX G Check Figures

768

GLOSSARY

COMPANY AND PRODUCT INDEX

SUBJECT INDEX

RENT TEXTBOOKS

Financial Accounting with Brochure(s)

Why Rent from Knetbooks?

Top 5 reasons to order all your textbooks from Knetbooks:

Related Products