ACCT3 financial

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Title page
Imprint page
Brief Contents
Contents
Guide to the text
Guide to the online resources
Chapter 1: Financial accounting
	Beginning assumptions
		Economic entity assumption
		Accounting period assumption
		Monetary unit assumption
		Going concern assumption
	Reporting profitability: the income statement
		Revenues
		Expenses
		The income statement
	Reporting financial position: the balance sheet
		Assets
		Liabilities
		Equity
		The balance sheet
	Reporting equity: the statement of changes in equity
		Linking the income statement and the balance sheet
	Reporting cash flows: the cash flow statement
		Financing activities
		Investing activities
		Operating activities
		The cash flow statement
	The objectives of financial reporting
		Relevance and materiality
		Faithful representation
		Comparability
		Verifiability
		Timeliness
		Understandability
	The language of accounting
	Exercises
	Problems
	Cases
Chapter 2
: Financial statements
	Business forms
	Generally accepted accounting principles (GAAP)
	The balance sheet
	The income statement
		Profits before income tax expense
		Other comprehensive income
	Horizontal and vertical analyses
		Horizontal analysis
		Vertical analysis
	The statement of changes in equity
	Information beyond the financial statements
		Notes to the financial statements
		Auditor’s report
		Directors‘ report
		Other information
		Sustainability reporting
		Governance information
	Exercises
	Problems
	Cases
Chapter 3: Recording accounting transactions
	The accounting information system
	Accounting transactions and
the accounting equation
		Transaction analysis
	The dual-entry accounting system
		The T-account
		Debit and credit rules
		Summary of debit and credit rules
	Recording transactions in the accounting system
		The journal
		The ledger
		The trial balance
	Comprehensive example: journal entries to
financial statements
		Recording transactions in the journal and posting
to the ledger
		Preparing a trial balance
		Preparing financial statements
	Exercises
	Problems
	Cases
Chapter 4: Accrual accounting and
adjusting entries
	Accrual and cash bases of accounting
		Reporting accrual- and cash-based income
	Adjusting journal entries
		Scenario 1: Deferred revenue
		Scenario 2: Accrued revenue
		Scenario 3: Deferred expense
		Scenario 4: Accrued expense
		Summary of adjusting journal entries
	Comprehensive example: adjusting journal entries
		Journalising and posting adjusting entries
		Preparing an adjusted trial balance
		Preparing financial statements
	Closing process
	The accounting cycle: a summary
	Exercises
	Problems
	Cases
Chapter 5: Cash and internal controls
	Internal control
	Components of internal control
		Control environment
		Risk assessment
		Control activities
		Information and communication
		Monitoring
		Limitations of internal control
	Cash controls
		Bank reconciliations
		Bank reconciliation example
		Petty cash funds
	Reporting cash and cash equivalents
	Analysing cash
		Horizontal and vertical analyses
		Free cash flow
	Exercises
	Problems
	Cases
Chapter 6: Receivables
	Recording and reporting accounts receivable
		Recording accounts receivable
		Reporting accounts receivable
	Uncollectible receivables
		Direct write-off method
		Allowance method
	Estimating bad debt expense
		Percentage-of-sales approach
		Percentage-of-receivables approach
	Analysing accounts receivable
		Horizontal and vertical analyses
		Receivables turnover ratio
		Allowance ratio
	Notes receivable
		Recording the note
		Recording interest
		Collecting the note
	Exercises
	Problems
	Cases
Chapter 7: Inventory
	Recording, expensing and reporting inventory
		Recording inventory
		Expensing inventory
		Reporting inventory and cost of sales
	Inventory costing methods
		Specific identification
		First-in, first-out (FIFO)
		Last-in, first-out (LIFO)
		Moving average
	Comparing inventory costing methods
	Estimating ending inventory
	Lower-of-cost-and-net realisable value
	Evaluating a business’ management of inventory
		Horizontal and vertical analyses
		Inventory turnover ratio
	Appendix: periodic inventory system
		Recording inventory
		Inventory costing methods
	Exercises
	Problems
	Cases
Chapter 8: Non-current assets and
intangible assets
	Recording, expensing and reporting
non-current assets
		Recording non-current assets
		Expensing non-current assets
		Reporting non-current assets
	Calculating depreciation expense
		Straight-line method
		Reducing-balance method
		Units-of-activity method
		Comparing depreciation methods
	Adjustments made during a non-current
asset’s useful life
		Changes in depreciation estimates
		Expenditures after acquisition
		Asset impairment
		Asset revaluations
	Disposing of non-current assets
		Loss example
		Gain example
	Evaluating a company’s management of
non-current assets
		Horizontal and vertical analyses
		Non-current asset turnover ratio
		Average life and age of non-current assets
	Non-current assets and cash flows
	Intangible assets
		Recording intangible assets
		Amortising and impairing intangible assets
	Exercises
	Problems
	Cases
Chapter 9: Liabilities
	Current liabilities
		Taxes payable
		Current liabilities with payroll
		Notes payable
		Current portion of non-current debt
		Reporting current liabilities
	Non-current liabilities
	Bonds
		Bonds issued at face value
		Bonds issued at a discount
		Bonds issued at a premium
	Redeeming a bond before maturity
	Additional liabilities
		Lease liabilities
		Contingent liabilities
	Evaluating a company’s management of liabilities
		Horizontal and vertical analyses
		Current ratio
		Debt to assets ratio
	Appendix: determining a bond’s Issue price
	Appendix: effective interest method of amortisation
		Discount example
		Premium example
	Exercises
	Problems
	Cases
Chapter 10: Partnerships
	The partnership form of business
		Ease of formation
		Partnership agreement
		Mutual agency and co-ownership of property
		Unlimited liability of owners
		Transferability of ownership
		No partnership taxation
		Capital accounts for each partner
	Commencing a partnership
		Capital account for each partner
	Allocate profits and losses
		Sharing profits based on a set percentage
		Sharing profits based on capital balances and on service
	Admission and withdrawal of a partner
		Purchasing a current partner’s interest
		Investing in the partnership
		Investing in the partnership: bonus to new partner
		Investing in the partnership: bonus to existing partners
		Withdrawal of a partner
		Revaluation of assets before withdrawal of a partner
		Withdrawal of a partner at carrying amount
		Withdrawal of a partner at more
than the carrying amount
		Withdrawal of a partner at less
than the carrying amount
	Liquidation
		Sale of assets
		Paying the liabilities
		Partners receive remaining cash
	Partnership financial statements
	Exercises
	Problems
	Cases
Chapter 11: Shareholders’ equity
	The corporate form of business
		Separate legal entity
		Ability to raise capital
		Limited liability of owners
		Transferability of ownership
		Dividend imputation
		Regulation
	Ordinary shares
		Shareholder rights
		Recording ordinary shares
		Issuing shares by instalment
		Oversubscription
		Forfeiture
	Dividends
		Cash dividends
		Share dividends
		Dividend Reinvestment Plans in Australia
		Share splits
	Preference shares
		Recording preference shares
		Cash dividends on preference shares
	Share buybacks
		Recording share buybacks
	Evaluating a company’s management of equity
		Horizontal and vertical analyses
		Earnings per share
		Return on equity
		Dividend payout ratio
		Dividend yield
		Shareholders’ equity and cash flows
	Exercises
	Problems
	Cases
Chapter 12: Statement of cash flows
	The statement of cash flows
		Cash flows from operating activities
		Cash flows from investing activities
		Cash flows from financing activities
		Net increase (decrease) in cash
		Additional disclosures
	Preparing the statement of cash flows
		Direct and indirect methods for operating cash flows
		Example data
	Reporting cash flows from operating activities:
direct method
		Cash received from customers
		Cash paid for inventory
		Cash paid for operating expenses
		Cash paid for taxes
		Other revenues and expenses
		Net operating cash flows
	Reporting cash flows from operating activities:
indirect method
		Adjustments for non-cash items
		Adjustments for gains and losses from investing and
financing activities
		Adjustments for current assets and current liabilities
		Net operating cash flows
	Calculating cash flows from investing activities
		Investments
		Equipment
		Accumulated depreciation
		Summary of investing cash flows
	Calculating cash flows from financing activities
		Non-current liabilities
		Contributed equity
		Retained earnings
		Net financing cash flows
		Complete statement of cash flows: indirect method
	Analysing a company’s statement of cash flows
		Free cash flow
		Cash flow adequacy ratio
	Exercises
	Problems
	Cases
Chapter 13: Financial statement analysis
	Financial statement analysis
		Financial information
		Standards of comparison
		Analysis tools
	Horizontal and vertical analyses
		Horizontal analysis
		Vertical analysis
	Profitability analysis
		Profit margin
		Return on equity
		Return on assets
		Earnings per share
		Price to earnings ratio
		Summary of profitability
	Liquidity analysis
		Current ratio
		Quick ratio
		Receivables turnover ratio
		Inventory turnover ratio
		Summary of liquidity analysis
	Solvency analysis
		Debt to assets ratio
		Debt to equity ratio
		Times interest earned
		Summary of solvency
	DuPont analysis
	Exercises
	Problems
	Cases
Appendix A: Time value of money
Appendix B: CSL Limited, annual report 2017
Endnotes
Index
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