Survey of Accounting, 2nd Edition

Cover
Title Page
Copyright
Brief Contents
Author Commitment
Table of Contents
1 Introduction to Financial Statements
	Knowing the Numbers
	LO 1: Identify the forms of business organization and the uses of accounting information.
		Forms of Business Organization
		Users and Uses of Financial Information
		Ethics in Financial Reporting
	LO 2: Explain the three principal types of business activity.
		Financing Activities
		Investing Activities
		Operating Activities
	LO 3: Describe the four financial statements and how they are prepared.
		Income Statement
		Retained Earnings Statement
		Balance Sheet
		Statement of Cash Flows
		Interrelationships of Statements
		Other Elements of an Annual Report
2 A Further Look at Financial Statements
	Just Fooling Around?
	LO 1: Identity the sections of a classified balance sheet.
		Current Assets
		Long-Term Investments
		Property, Plant, and Equipment
		Intangible Assets
		Current Liabilities
		Long-Term Liabilities
		Stockholders’ Equity
	LO 2: Use ratios to evaluate a company’s profitability, liquidity, and solvency.
		Ratio Analysis
		Using the Income Statement
		Using a Classified Balance Sheet
		Using the Statement of Cash Flows
3 The Accounting Information System
	Accidents Happen
	LO 1: Discuss financial reporting concepts.
		The Standard-Setting Environment
		Qualities of Useful Information
		Assumptions in Financial Reporting
		Principles in Financial Reporting
		Cost Constraint
	LO 2: Analyze the effect of business transactions on the basic accounting equation.
		Accounting Transactions
		Analyzing Transactions
		Summary of Transactions
		Preparing Financial Statements
4 Accrual Accounting Concepts
	Keeping Track of Groupons
	LO 1: Explain the accrual basis of accounting and the reasons for adjustments.
		The Revenue Recognition Principle
		The Expense Recognition Principle
		Accrual versus Cash Basis of Accounting
		The Need for Adjustments
		Types of Adjustments
	LO 2: Prepare adjustments for deferrals.
		Prepaid Expenses
		Unearned Revenues
	LO 3: Prepare adjustments for accruals.
		Accrued Revenues
		Accrued Expenses
		Summary of Basic Relationships
	LO 4: Prepare financial statements from adjusted amounts.
5 Fraud, Internal Control, and Cash
	Minding the Money in Madison
	LO 1: Define fraud and the principles of internal control.
		Fraud
		The Sarbanes-Oxley Act
		Internal Control
		Principles of Internal Control Activities
		Limitations of Internal Control
	LO 2: Apply internal control principles to cash.
		Cash Receipts Controls
		Cash Disbursements Controls
	LO 3: Identify the control features of a bank account.
		Electronic Funds Transfer (EFT) System
		Bank Statements
		Reconciling the Bank Account
	LO 4: Explain the reporting of cash and the basic principles of cash management.
		Reporting Cash
		Managing and Monitoring Cash
		Cash Budgeting
6 Recording and Analyzing Merchandising Transactions, Receivables, and Inventory
	Buy Now, Vote Later
	LO 1: Describe inventory systems and record purchases and sales.
		Flow of Costs
		Recording Purchases Under a Perpetual Inventory System
		Recording Sales Under a Perpetual Inventory System
	LO 2: Discuss how to classify and determine cost of inventory under a periodic approach.
		Classifying Inventory
		Determining the Cost of Inventory
		Cost Flow Assumptions
		Financial Statement and Tax Effects of Cost Flow Methods
	LO 3: Explain how companies recognize and value receivables.
		Types of Receivables
		Recognizing Accounts Receivable
		Valuing Accounts Receivable
	LO 4: Prepare a multiple-step income statement and a comprehensive income statement.
		Multiple-Step Income Statement
		Comprehensive Income Statement
	LO 5: Compute and analyze gross profit rate and profit margin.
		Gross Profit Rate
		Profit Margin
7 Reporting and Analyzing Long-Lived Assets
	A Tale of Two Airlines
	LO 1: Explain the accounting for plant asset expenditures.
		Determining the Cost of Plant Assets
		Expenditures During Useful Life
	LO 2: Apply depreciation methods to plant assets.
		Factors in Computing Depreciation
		Depreciation Methods
		Revising Periodic Depreciation
		Impairments
	LO 3: Explain how to account for the disposal of plant assets.
		Sale of Plant Assets
		Retirement of Plant Assets
	LO 4: Identity the basic issues related to reporting intangible assets.
		Accounting for Intangible Assets
		Types of Intangible Assets
	LO 5: Discuss how long-lived assets are reported and analyzed.
		Presentation
		Analysis
8 Reporting and Analyzing Liabilities and Stockholders’ Equity
	And Then There Were Two
	LO 1: Explain how to account for current liabilities.
		What Is a Current Liability?
		Notes Payable
		Sales Taxes Payable
		Unearned Revenues
		Current Maturities of Long-Term Debt
		Payroll and Payroll Taxes Payable
	LO 2: Explain how to account for bonds.
		Issuing Bonds at Face Value
		Discount or Premium on Bonds
		Issuing Bonds at a Discount
		Issuing Bonds at a Premium
		Redeeming Bonds at Maturity
	LO 3: Explain how to account for the issuance of common and preferred stock, and the purchase of treasury stock.
		Stockholder Rights
		Corporate Capital
		Accounting for Common Stock
		Accounting for Preferred Stock
		Accounting for Treasury Stock
	LO 4: Explain how to account for cash dividends.
		Cash Dividends
		Dividend Preferences
	LO 5: Discuss how stockholders’ equity is reported and analyzed.
		Balance Sheet Presentation of Stockholders’ Equity
		Analysis of Stockholders’ Equity
		Debt versus Equity Decision
9 Financial Analysis: The Big Picture
	It Pays to Be Patient
	LO 1: Apply the concepts of sustainable income and quality of earnings.
		Sustainable Income
		Quality of Earnings
	LO 2: Apply horizontal analysis and vertical analysis.
		Horizontal Analysis
		Vertical Analysis
	LO 3: Analyze a company’s performance using ratio analysis.
		Price-Earnings Ratio
		Liquidity Ratios
		Solvency Ratios
		Profitability Ratios
	LO *4: APPENDIX 9A: Evaluate a company comprehensively using ratio analysis.
		Liquidity Ratios
		Solvency Ratios
		Profitability Ratios
10 Managerial Accounting
	Just Add Water . . . and Paddle
	LO 1: Identify the features of managerial accounting and the functions of management.
		Comparing Managerial and Financial Accounting
		Management Functions
		Organizational Structure
	LO 2: Describe the classes of manufacturing costs and the differences between product and period costs.
		Manufacturing Costs
		Product versus Period Costs
		Illustration of Cost Concepts
	LO 3: Demonstrate how to compute cost of goods manufactured and prepare financial statements for a manufacturer.
		Income Statement
		Cost of Goods Manufactured
		Cost of Goods Manufactured Schedule
		Balance Sheet
	LO 4: Discuss trends in managerial accounting.
		Service Industries
		Focus on the Value Chain
		Balanced Scorecard
		Business Ethics
		Corporate Social Responsibility
11 Cost-Volume-Profit
	Don’t Worry—Just Get Big
	LO 1: Explain variable, fixed, and mixed costs and the relevant range.
		Variable Costs
		Fixed Costs
		Relevant Range
		Mixed Costs
	LO 2: Apply the high-low method to determine the components of mixed costs.
		High-Low Method
		Importance of Identifying Variable and Fixed Costs
	LO 3: Prepare a CVP income statement to determine contribution margin.
		Basic Components
		CVP Income Statement
	LO 4: Compute the break-even point using three approaches.
		Mathematical Equation
		Contribution Margin Technique
		Graphic Presentation
	LO 5: Determine the sales required to earn target net income and determine margin of safety.
		Target Net Income
		Margin of Safety
12 Incremental Analysis
	Keeping It Clean
	LO 1: Describe management’s decision-making process and incremental analysis.
		Incremental Analysis Approach
		How Incremental Analysis Works
		Qualitative Factors
		Types of Incremental Analysis
	LO 2: Analyze the relevant costs in accepting an order at a special price.
	LO 3: Analyze the relevant costs in a make-or-buy decision.
		Opportunity Cost
	LO 4: Analyze the relevant costs in determining whether to sell or process materials further.
		Single-Product Case
		Multiple-Product Case
	LO 5: Analyze the relevant costs to be considered in repairing, retaining, or replacing equipment.
	LO 6: Analyze the relevant costs in deciding whether to eliminate an unprofitable segment or product.
13 Budgetary Planning
	What’s in Your Cupcake?
	LO 1: State the essentials of effective budgeting and the components of the master budget.
		Budgeting and Accounting
		The Benefits of Budgeting
		Essentials of Effective Budgeting
		The Master Budget
	LO 2: Prepare budgets for sales, production, and direct materials.
		Sales Budget
		Production Budget
		Direct Materials Budget
	LO 3: Prepare budgets for direct labor, manufacturing overhead, and selling and administrative expenses, and a budgeted income statement.
		Direct Labor Budget
		Manufacturing Overhead Budget
		Selling and Administrative Expense Budget
		Budgeted Income Statement
	LO 4: Prepare a cash budget and a budgeted balance sheet.
		Cash Budget
		Budgeted Balance Sheet
	LO 5: Apply budgeting principles to nonmanufacturing companies.
		Merchandisers
		Service Companies
		Not-for-Profit Organizations
14 Budgetary Control and Responsibility Accounting
	Pumpkin Madeleines and a Movie
	LO 1: Describe budgetary control and static budget reports.
		Budgetary Control
		Static Budget Reports
	LO 2: Prepare flexible budget reports.
		Why Flexible Budgets?
		Developing the Flexible Budget
		Flexible Budget—A Case Study
		Flexible Budget Reports
	LO 3: Apply responsibility accounting to cost and profit centers.
		Controllable Versus Noncontrollable Revenues and Costs
		Principles of Performance Evaluation
		Responsibility Reporting System
		Types of Responsibility Centers
	LO 4: Evaluate performance in investment centers.
		Return on Investment (ROI)
		Responsibility Report
		Judgmental Factors in ROI
		Improving ROI
	LO *5: APPENDIX 14A: Explain the difference between ROI and residual income.
		Residual Income Compared to ROI
		Residual Income Weakness
15 Standard Costs and Balanced Scorecard
	80,000 Different Caffeinated Combinations
	LO 1: Describe standard costs.
		Distinguishing Between Standards and Budgets
		Setting Standard Costs
	LO 2: Determine direct materials variances.
		Analyzing and Reporting Variances
		Direct Materials Variances
	LO 3: Determine direct labor and total manufacturing overhead variances.
		Direct Labor Variances
		Manufacturing Overhead Variances
	LO 4: Prepare variance reports and balanced scorecards.
		Reporting Variances
		Income Statement Presentation of Variances
		Balanced Scorecard
	LO *5: APPENDIX 15A: Compute overhead controllable and volume variances.
		Overhead Controllable Variance
		Overhead Volume Variance
16 Planning for Capital Investments
	Floating Hotels
	LO 1: Describe capital budgeting inputs and apply the cash payback technique.
		Cash Flow Information
		Illustrative Data
		Cash Payback
	LO 2: Use the net present value method.
		Equal Annual Cash Flows
		Unequal Annual Cash Flows
		Choosing a Discount Rate
		Simplifying Assumptions
		Comprehensive Example
	LO 3: Identify capital budgeting challenges and refinements.
		Intangible Benefits
		Profitability Index for Mutually Exclusive Projects
		Risk Analysis
		Post-Audit of Investment Projects
	LO 4: Use the internal rate of return method.
		Comparing Discounted Cash Flow Methods
	LO 5: Use the annual rate of return method.
A Specimen Financial Statements: Apple Inc.
B Specimen Financial Statements: Columbia Sportswear Company
C Specimen Financial Statements: VF Corporation
D Double-Entry Accounting System
	LO 1: Explain how accounts, debits, and credits are used to record business transactions.
		Debits and Credits
		Debit and Credit Procedures
		Summary of Debit/Credit Rules
	LO 2: Indicate how a journal and ledger are used in the recording process.
		The Recording Process
		The Journal
		The Ledger
		Chart of Accounts
		Posting
		The Recording Process Illustrated
	LO 3: Prepare a trial balance.
	LO 4: Prepare adjusting entries and an adjusted trial balance.
		The Need for Adjusting Entries
		The Adjusting Process Illustrated
		Preparing Financial Statements
E Time Value of Money
	LO 1: Compute interest and future values.
		Nature of Interest
		Future Value of a Single Amount
		Future Value of an Annuity
	LO 2: Compute present values.
		Present Value Variables
		Present Value of a Single Amount
		Present Value of an Annuity
		Time Periods and Discounting
		Present Value of a Long-Term Note or Bond
	LO 3: Use a financial calculator to solve time value of money problems.
		Present Value of a Single Sum
		Present Value of an Annuity
		Useful Applications of the Financial Calculator
Company Index
Subject Index
EULA