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DescriptionWeygandt helps corporate managers see the relevance of accounting in their everyday lives. Challenging accounting concepts are introduced with examples that are familiar to them, which helps build motivation to learn the material. Accounting issues are also placed within the context of marketing, management, IT, and finance. The new Do It! feature reinforces the basics by providing quick-hitting examples of brief exercises. The chapters also incorporate the All About You (AAY) feature as well as the Accounting Across the Organization (AAO) boxes that highlight the impact of accounting concepts. With these features, corporate managers will learn the concepts and understand how to effectively apply them. Table of contents : Cover Page ......Page 1 Dedication......Page 8 Title Page ......Page 9 Acknowledgments ......Page 20 Brief Contents ......Page 21 Contents ......Page 22 Feature Story: KNOWING THE NUMBERS ......Page 42 Three Activities ......Page 44 Who Uses Accounting Data? ......Page 46 Ethics in Financial Reporting' ......Page 47 Generally Accepted Accounting Principles ......Page 48 Assumptions ......Page 49 Liabilities ......Page 52 Stockholders’ Equity ......Page 53 Using the Basic Accounting Equation ......Page 54 Transaction Analysis ......Page 55 Summary of Transactions ......Page 60 Financial Statements ......Page 61 Balance Sheet ......Page 63 Statement of Cash Flow ......Page 64 Private Accounting ......Page 70 “Show Me the Money” ......Page 71 Feature Story: ACCIDENTS HAPPEN ......Page 90 The Account ......Page 92 Debit and Credit Procedure ......Page 93 Summary of Debit/Credit Rules ......Page 96 Steps in the Recording Process ......Page 97 The Journal ......Page 98 The Ledger ......Page 100 Posting ......Page 103 The Recording Process Illustrated ......Page 104 Summary Illustration of Journalizing and Posting ......Page 110 The Trial Balance ......Page 111 Limitations of a Trial Balance ......Page 112 Use of Dollar Signs ......Page 113 Feature Story: WHAT WAS YOUR PROFIT? ......Page 136 Fiscal and Calendar Years ......Page 138 Recognizing Revenues and Expenses ......Page 139 Types of Adjusting Entries ......Page 141 Adjusting Entries for Deferrals ......Page 142 Adjusting Entries for Accruals ......Page 149 Summary of Journalizing and Posting ......Page 154 Preparing the Adjusted Trial Balance ......Page 156 Preparing Financial Statements ......Page 157 APPENDIX: Alternative Treatment of Prepaid Expenses and Unearned Revenues ......Page 162 Prepaid Expenses ......Page 163 Unearned Revenues ......Page 164 Summary of Additional Adjustment Relationships ......Page 165 Feature Story: EVERYONE LIKES TO WIN ......Page 188 Steps in Preparing a Worksheet ......Page 190 Preparing Financial Statements from a Worksheet ......Page 198 Closing the Books ......Page 200 Preparing Closing Entries ......Page 201 Posting Closing Entries ......Page 203 Preparing a Post-Closing Trial Balance ......Page 205 Summary of the Accounting Cycle ......Page 207 Correcting Entries—An Avoidable Step ......Page 208 The Classified Balance Sheet ......Page 210 Current Assets ......Page 211 Long-Term Investments ......Page 212 Intangible Assets ......Page 213 Current Liabilities ......Page 214 Stockholders’ (Owners’) Equity ......Page 215 Reversing Entries Example ......Page 221 Feature Story: WHO DOESN’T SHOP AT WAL-MART? ......Page 246 Merchandising Operations ......Page 248 Flow of Costs ......Page 249 Recording Purchases of Merchandise ......Page 251 Freight Costs ......Page 253 Purchase Discounts ......Page 254 Summary of Purchasing Transactions ......Page 255 Recording Sales of Merchandise ......Page 256 Sales Returns and Allowances ......Page 257 Sales Discounts ......Page 258 Adjusting Entries ......Page 259 Summary of Merchandising Entries ......Page 260 Multiple-Step Income Statement ......Page 262 Classified Balance Sheet ......Page 265 Determining Cost of Goods Sold Under a Periodic System ......Page 269 Recording Purchases of Merchandise ......Page 270 Recording Sales of Merchandise ......Page 271 Using a Worksheet ......Page 273 Feature Story: “WHERE IS THAT SPARE BULLDOZER BLADE?” ......Page 296 Classifying Inventory ......Page 298 Taking a Physical Inventory ......Page 299 Determining Ownership of Goods ......Page 300 Inventory Costing ......Page 301 Specific Identification ......Page 302 Cost Flow Assumptions ......Page 303 Financial Statement and Tax Effects of Cost Flow Methods ......Page 308 Lower-of-Cost-or-Market ......Page 310 Income Statement Effects ......Page 311 Presentation ......Page 313 Analysis Using Inventory Turnover ......Page 314 First-In, First-Out (FIFO) ......Page 319 Average-Cost ......Page 320 APPENDIX 6B: Estimating Inventories ......Page 322 Gross Profit Method ......Page 323 Retail Inventory Method ......Page 324 Feature Story: MINDING THE MONEY IN MOOSE JAW ......Page 348 Fraud ......Page 350 Internal Control ......Page 352 Principles of Internal Control ......Page 353 Limitations of Internal Control ......Page 360 Over-the-Counter Receipts ......Page 361 Mail Receipts ......Page 363 Voucher System Controls ......Page 364 Petty Cash Fund Controls ......Page 366 Control Features: Use of a Bank ......Page 368 Bank Statements ......Page 369 Reconciling the Bank Account ......Page 371 Electronic Funds Transfer (EFT) System ......Page 375 Reporting Cash ......Page 376 Feature Story: A DOSE OF CAREFUL MANAGEMENT KEEPS RECEIVABLES HEALTHY ......Page 400 Recognizing Accounts Receivable ......Page 403 Valuing Accounts Receivable ......Page 404 Disposing of Accounts Receivable ......Page 410 Notes Receivable ......Page 413 Determining the Maturity Date ......Page 414 Valuing Notes Receivable ......Page 415 Disposing of Notes Receivable ......Page 416 Analysis ......Page 418 Feature Story: HOW MUCH FOR A RIDE TO THE BEACH? ......Page 440 SECTION 1: Plant Assets ......Page 442 Land Improvements ......Page 443 Equipment ......Page 444 Depreciation ......Page 446 Depreciation Methods ......Page 447 Revising Periodic Depreciation ......Page 452 Expenditures During Useful Life ......Page 453 Retirement of Plant Assets ......Page 454 Sale of Plant Assets ......Page 455 Accounting for Natural Resources ......Page 457 Accounting for Intangible Assets ......Page 458 Copyrights ......Page 459 Franchises and Licenses ......Page 460 Research and Development Costs ......Page 461 Presentation ......Page 462 Analysis ......Page 463 Gain Treatment ......Page 468 Feature Story: FINANCING HIS DREAMS ......Page 488 What Is a Current Liability? ......Page 490 Notes Payable ......Page 491 Payroll and Payroll Taxes Payable ......Page 492 Unearned Revenues ......Page 494 Current Maturities of Long-Term Debt ......Page 495 Analysis ......Page 496 Bond Basics ......Page 497 Issuing Procedures ......Page 499 Bond Trading ......Page 500 Determining the Market Value of Bonds ......Page 501 Issuing Bonds at Face Value ......Page 502 Discount or Premium on Bonds ......Page 503 Issuing Bonds at a Discount ......Page 504 Issuing Bonds at a Premium ......Page 505 Redeeming Bonds before Maturity ......Page 506 Accounting for Long-Term Notes Payable ......Page 507 Presentation ......Page 509 Analysis ......Page 510 Present Value of Face Value ......Page 516 Present Value of Interest Payments (Annuities) ......Page 518 Time Periods and Discounting ......Page 519 Computing the Present Value of a Bond ......Page 520 APPENDIX 10B: Effective-Interest Method of Bond Amortization ......Page 521 Amortizing Bond Discount ......Page 522 Amortizing Bond Premium ......Page 523 Amortizing Bond Discount ......Page 525 Amortizing Bond Premium ......Page 527 Feature Story: “HAVE YOU DRIVEN A FORD LATELY?” ......Page 550 The Corporate Form of Organization ......Page 552 Characteristics of a Corporation ......Page 553 Ownership Rights of Stockholders ......Page 556 Stock Issue Considerations ......Page 558 Corporate Capital ......Page 560 Issuing Par-Value Common Stock for Cash ......Page 561 Issuing No-Par Common Stock for Cash ......Page 562 Issuing Common Stock for Services or Noncash Assets ......Page 563 Accounting for Treasury Stock ......Page 564 Purchase of Treasury Stock ......Page 565 Disposal of Treasury Stock ......Page 566 Dividend Preferences ......Page 568 SECTION 2: Dividends ......Page 569 Entries for Cash Dividends ......Page 570 Allocating Cash Dividends between Preferred and Common Stock ......Page 571 Entries for Stock Dividends ......Page 574 Effects of Stock Dividends ......Page 575 Stock Splits ......Page 576 SECTION 3: Retained Earnings ......Page 577 Retained Earnings Restrictions ......Page 578 Prior Period Adjustments ......Page 579 Retained Earnings Statement ......Page 580 Presentation......Page 581 Analysis ......Page 582 APPENDIX 11A: Stockholders’ Equity Statement ......Page 587 Book Value per Share ......Page 588 Book Value versus Market Value ......Page 589 Feature Story: “IS THERE ANYTHING ELSE WE CAN BUY?” ......Page 612 Why Corporations Invest ......Page 614 Recording Sale of Bonds ......Page 616 Accounting for Stock Investments ......Page 617 Holdings of Less than 20% ......Page 618 Holdings Between 20% and 50% ......Page 619 Valuing and Reporting Investments ......Page 622 Categories of Securities ......Page 623 Balance Sheet Presentation ......Page 626 Presentation of Realized and Unrealized Gain or Loss ......Page 627 Classified Balance Sheet ......Page 628 APPENDIX: Preparing Consolidated Financial Statements ......Page 632 Consolidated Balance Sheet ......Page 633 Consolidated Income Statement ......Page 636 Feature Story: GOT CASH? ......Page 656 Usefulness of the Statement of Cash Flows ......Page 658 Classification of Cash Flows ......Page 659 Significant Noncash Activities ......Page 660 Format of the Statement of Cash Flows ......Page 661 Indirect and Direct Methods ......Page 662 Preparing the Statement of Cash Flows— Indirect Method ......Page 664 Step 1: Operating Activities ......Page 665 Summary of Conversion to Net Cash Provided by Operating Activities—Indirect Method ......Page 669 Step 2: Investing and Financing Activities ......Page 670 Step 3: Net Change in Cash ......Page 671 Free Cash Flow ......Page 674 APPENDIX 13A: Using a Worksheet to Prepare the Statement of Cash Flows—Indirect Method ......Page 679 Preparing the Worksheet ......Page 680 APPENDIX 13B: Statement of Cash Flows— Direct Method ......Page 685 Step 1: Operating Activities ......Page 686 Step 2: Investing and Financing Activities ......Page 690 Step 3: Net Change in Cash ......Page 691 Feature Story: IT PAYS TO BE PATIENT ......Page 718 Need for Comparative Analysis ......Page 720 Horizontal Analysis ......Page 721 Balance Sheet ......Page 722 Income Statement ......Page 723 Retained Earnings Statement ......Page 724 Income Statement ......Page 725 Ratio Analysis ......Page 727 Liquidity Ratios ......Page 728 Profitability Ratios ......Page 731 Solvency Ratios ......Page 735 Summary of Ratios ......Page 737 Discontinued Operations ......Page 740 Extraordinary Items ......Page 741 Changes in Accounting Principle ......Page 742 Quality of Earnings ......Page 743 Improper Recognition ......Page 744 APPENDIX A: Specimen Financial Statements: PepsiCo, Inc. ......Page 771 APPENDIX B: Specimen Financial Statements: The Coca-Cola Company ......Page 805 SimpIe Interest ......Page 809 Compound Interest ......Page 810 Future Value of a Single Amount ......Page 811 Future Value of an Annuity ......Page 813 Present Value Variables ......Page 815 Present Value of a Single Amount ......Page 816 Present Value of an Annuity ......Page 818 Computing the Present Value of a Long-Term Note or Bond ......Page 820 Present Value of a Single Sum ......Page 823 Useful Applications of the Financial Calculator ......Page 824 Mortgage Loan Amount ......Page 825 Internal Control of Payroll ......Page 831 Hiring Employees ......Page 832 Preparing the Payroll ......Page 833 Gross Earnings ......Page 834 Payroll Deductions ......Page 835 Net Pay ......Page 837 Maintaining Payroll Department Records ......Page 838 Recognizing Payroll Expenses and Liabilities ......Page 839 Recording Payment of the Payroll ......Page 840 Federal Unemployment Taxes ......Page 841 Recording Employer Payroll Taxes ......Page 842 Filing and Remitting Payroll Taxes ......Page 843 Nature and Purpose of Subsidiary Ledgers ......Page 855 Subsidiary Ledger Example ......Page 856 Advantages of Subsidiary Ledgers ......Page 857 Sales Journal ......Page 858 Posting the Sales Journal ......Page 859 Cash Receipts Journal ......Page 861 Journalizing Cash Receipts Transactions ......Page 863 Proving the Ledgers ......Page 864 Posting the Purchases Journal ......Page 865 Journalizing Cash Payments Transactions ......Page 867 Posting the Cash Payments Journal ......Page 869 Effects of Special Journals on the General Journal ......Page 870 Contingent Liabilities......Page 893 Recording a Contingent Liability ......Page 894 Operating Leases ......Page 895 Capital Leases ......Page 896 Additional Liabilities for Employee Fringe Benefits ......Page 897 Paid Absences ......Page 898 Postretirement Benefits......Page 899 IFRS Appendix ......Page 909 Photo Credits ......Page 949 Company Index ......Page 951 Subject Index ......Page 953 Related Torrents
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