
Financial Accounting
by: Warren,Carl S.
- ISBN 13:
9780324380675
- ISBN 10:
0324380674
- Edition: 10th
- Format: Hardcover
- Copyright: 08/02/2006
- Publisher: South-Western College Pub
- Newer Edition
Note: Not guaranteed to come with supplemental materials (access cards, study guides, lab manuals, CDs, etc.)
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Summary
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.
Table of Contents
Read moreIntroduction 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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