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9781119410959

Accounting Principles

by ; ;
  • ISBN13:

    9781119410959

  • ISBN10:

    1119410959

  • Edition: 13th
  • Format: Paperback
  • Copyright: 2018-06-06
  • Publisher: John Wiley & Sons Inc

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Summary

Accounting Principles provides students with a clear introduction to fundamental accounting concepts with an emphasis on learning the accounting cycle from a sole proprietor perspective. This product helps students get the most out of their accounting course by making practice simple. Streamlined learning objectives help students use their study time efficiently by creating clear connections between the reading and the homework.

Author Biography

Jerry J. Weygandt, PhD, CPA, is Arthur Andersen Alumni Professor of Accounting at the University of Wisconsin-Madison. He holds a Ph.D. in accounting from the University of Illinois. Articles by Professor Weygandt have appeared in the Accounting Review, Journal of Accounting Research, Accounting Horizons, Journal of Accountancy, and other academic and professional journals. These articles have examined such financial reporting issues as accounting for price-level adjustments, pensions, convertible securities, stock option contracts, and interim reports. Professor Weygandt is author of other accounting and financial reporting books and is a member of the American Accounting Association, the American Institute of Certified Public Accountants, and the Wisconsin Society of Certified Public Accountants. He has served on numerous committees of the American Accounting Association and as a member of the editorial board of the Accounting Review; he also has served as President and Secretary-Treasurer of the American Accounting Association. He is the recipient of the Wisconsin Institute of CPAs Outstanding Educator's Award and the Lifetime Achievement Award. In 2001 he received the American Accounting Association's Outstanding Accounting Educator Award.

Paul D. Kimmel, PhD, CPA, received his bachelor's degree from the University of Minnesota and his doctorate in accounting from the University of Wisconsin. He is an Associate Professor at the University of Wisconsin -Milwaukee and has public accounting experience with Deloitte & Touche (Minneapolis). He was the recipient of the UWM School of Business Advisory Council Teaching Award and the Reggie Taite Excellence in Teaching Award and is a three-time winner of the Outstanding Teaching Assisting Award at the University of Wisconsin. He is also a recipient of the Elijah Watts Sells Award for Honorary Distinction for his results on the CPA exam. He is a member of the American Accounting Association and has published articles in Accounting Review, Accounting Horizons, Advances in Management Accounting, Managerial Finance, Issues in Accounting Education, Journal of Accounting Education, as well as other journals. His research interests include accounting for financial instruments and innovation in accounting education. He has published papers and given numerous talks on incorporating critical thinking into accounting education and helped prepare a catalog of critical thinking resources for the Federated Schools of Accountancy.

Donald E. Kieso, PhD, CPA, received his bachelor's degree from Aurora University and his doctorate in accounting from the University of Illinois. He is currently the KPMG Peat Marwick Emeritus Professor of Accounting at Northern Illinois University. He has public accounting experience with Price Waterhouse & Co. (San Francisco and Chicago) and Arthur Andersen & Co. (Chicago) and research experience with the Research Division of the American Institute of Certified Public Accountants (New York). He has done postdoctorate work as a Visiting Scholar at the University of California at Berkeley and is a recipient of NIU's Teaching Excellence Award and four Golden Apple Teaching Awards. Professor Kieso is the author of other accounting and business books and is a member of the American Accounting Association, the American Institute of Certified Public Accountants, and the Illinois CPA Society. He is currently serving on the Board of Trustees and Executive Committee of Aurora University, as a member of the Board of Directors of Castle BancGroup Inc., and as Treasurer and Director of Valley West Community Hospital.

Table of Contents

1 Accounting in Action 1-1

Knowing the Numbers: Columbia Sportswear 1-1

Accounting Activities and Users 1-3

The Building Blocks of Accounting 1-6

The Accounting Equation 1-11

Analyzing Business Transactions 1-13

The Four Financial Statements 1-20

Appendix 1A: Career Opportunities in Accounting 1-24

2 The Recording Process 2-1

Accidents Happen: MF Global Holdings 2-1

Accounts, Debits, and Credits 2-2

The Journal 2-7

The Ledger and Posting 2-10

The Trial Balance 2-21

3 Adjusting the Accounts 3-1

Keeping Track of Groupons: Groupon 3-1

Accrual-Basis Accounting and Adjusting Entries 3-2

Adjusting Entries for Deferrals 3-6

Adjusting Entries for Accruals 3-13

Adjusted Trial Balance and Financial Statements 3-20

Appendix 3A: Alternative Treatment of Deferrals 3-24

Appendix 3B: Financial Reporting Concepts 3-28

4 Completing the Accounting Cycle 4-1

Everyone Likes to Win: Rhino Foods 4-1

The Worksheet 4-2

Closing the Books 4-11

The Accounting Cycle and Correcting Entries 4-19

Classified Balance Sheet 4-23

Appendix 4A: Reversing Entries 4-29

5 Accounting for Merchandising Operations 5-1

Buy Now, Vote Later: REI 5-1

Merchandising Operations and Inventory Systems 5-3

Recording Purchases under a Perpetual System 5-6

Recording Sales Under a Perpetual System 5-11

The Accounting Cycle for a Merchandising Company 5-15

Multiple-Step and Comprehensive Income Statements 5-17

Appendix 5A: Worksheet for a Merchandising Company 5-23

Appendix 5B: Periodic Inventory System 5-24

6 Inventories 6-1

“Where is That Spare Bulldozer Blade?”: Caterpillar 6-1

Classifying and Determining Inventory 6-2

Inventory Methods and Financial Effects 6-7

Effects of Inventory Errors 6-15

Inventory Statement Presentation and Analysis 6-17

Appendix 6A: Inventory Methods and the Perpetual System 6-20

Appendix 6B: Estimating Inventories 6-22

7 Accounting Information Systems 7-1

QuickBooks® Helps This Retailer Sell Guitars: Intuit 7-1

Overview of Accounting Information Systems 7-2

Subsidiary Ledgers 7-5

Special Journals 7-8

8 Fraud, Internal Control, and Cash 8-1

Minding the Money in Madison: Barriques 8-1

Fraud and Internal Control 8-3

Cash Controls 8-11

Control Features of a Bank Account 8-19

Reporting Cash 8-27

9 Accounting for Receivables 9-1

A Dose of Careful Management Keeps Receivables Healthy: Whitehall-Robins 9-1

Recognition of Accounts Receivable 9-2

Valuation and Disposition of Accounts Receivable 9-5

Notes Receivable 9-13

Presentation and Analysis 9-18

10 Plant Assets, Natural Resources, and Intangible Assets 10-1

How Much for a Ride to the Beach?: Rent-A-Wreck 10-1

Plant Asset Expenditures 10-2

Depreciation Methods 10-7

Plant Asset Disposals 10-14

Natural Resources and Intangible Assets 10-17

Statement Presentation and Analysis 10-21

Appendix 10A: Exchange of Plant Assets 10-23

11 Current Liabilities and Payroll Accounting 11-1

Financing His Dreams: Wilbert Murdock 11-1

Accounting for Current Liabilities 11-2

Reporting and Analyzing Current Liabilities 11-6

Accounting for Payroll 11-9 

Appendix 11A: Additional Fringe Benefits 11-20

12 Accounting for Partnerships 12-1

From Trials to the Top Ten: Razor & Tie 12-1

Forming a Partnership 12-2

Accounting for Net Income or Net Loss 12-8

Liquidation of a Partnership 12-12

Appendix 12A: Admissions and Withdrawals of Partners 12-18

13 Corporations: Organization and Capital Stock Transactions 13-1

Oh Well, I Guess I’ll Get Rich: Facebook 13-1

Corporate Form of Organization 13-2

Accounting for Stock Transactions 13-10

Statement Presentation of Stockholders’ Equity 13-17

14 Corporations: Dividends, Retained Earnings, and Income Reporting 14-1

Owning a Piece of the Action: Van Meter Inc. 14-1

Accounting for Dividends and Stock Splits 14-2

Reporting and Analyzing Stockholders’ Equity 14-11

Corporate Income Statements 14-16

Appendix 14A: Stockholders’ Equity Statement 14-18

Appendix 14B: Book Value per Share 14-18

15 Long-Term Liabilities 15-1

And Then There Were Two: Chrysler 15-1

Major Characteristics of Bonds 15-2

Accounting for Bond Transactions 15-6

Accounting for Long-Term Notes Payable 15-12

Reporting and Analyzing Long-Term Liabilities 15-14

Appendix 15A: Straight-Line Amortization 15-17

Appendix 15B: Eff ective-Interest Amortization 15-20

16 Investments 16-1

“Is There Anything Else We Can Buy?”: Time Warner 16-1

Accounting for Debt Investments 16-2

Accounting for Stock Investments 16-6

Reporting Investments in Financial Statements 16-10

17 Statement of Cash Flows 17-1

Got Cash?: Microsoft 17-1

Usefulness and Format of the Statement of Cash Flows 17-3

Preparing the Statement of Cash Flows—Indirect Method 17-6

Analyzing the Statement of Cash Flows 17-17

Appendix 17A: Statement of Cash Flows—Direct Method 17-19

Appendix 17B: Worksheet for the Indirect Method 17-26

Appendix 17C: Statement of Cash Flows—T-Account Approach 17-31

18 Financial Analysis: The Big Picture 18-1

It Pays to Be Patient: Warren Buffett 18-2

Sustainable Income and Quality of Earnings 18-3

Horizontal Analysis and Vertical Analysis 18-9

Ratio Analysis 18-14

19 Managerial Accounting 19-1

Just Add Water . . . and Paddle: Current Designs 19-1

Managerial Accounting Basics 19-3

Managerial Cost Concepts 19-7

Manufacturing Costs in Financial Statements 19-10

Managerial Accounting Today 19-14

20 Job Order Costing 20-1

Profiting from the Silver Screen: Disney 20-1

Cost Accounting Systems 20-3

Assigning Manufacturing Costs 20-7

Predetermined Overhead Rates 20-12

Entries for Jobs Completed and Sold 20-15

Applied Manufacturing Overhead 20-20

21 Process Costing 21-1

The Little Guy Who Could: Jones Soda 21-1

Overview of Process Cost Systems 21-3

Process Cost Flow and Assigning Costs 21-6

Equivalent Units 21-9

The Production Cost Report 21-12

Appendix 21A: FIFO Method for Equivalent Units 21-17

22 Cost-Volume-Profit 22-1

Don’t Worry—Just Get Big: Amazon.com 22-1

Cost Behavior Analysis 22-2

Mixed Costs Analysis 22-7

Cost-Volume-Profit Analysis 22-10

Break-Even Analysis 22-14

Target Net Income and Margin of Safety 22-18

Appendix 22A: Regression Analysis 22-21

23 Incremental Analysis 23-1

Keeping It Clean: Method Products 23-1

Decision-Making and Incremental Analysis 23-3

Special Orders 23-6

Make or Buy 23-8

Sell or Process Further 23-10

Repair, Retain, or Replace Equipment 23-14

Eliminate Unprofitable Segment or Product 23-15

24 Budgetary Planning 24-1

What’s in Your Cupcake?: BabyCakes NYC 24-1

Effective Budgeting and the Master Budget 24-3

Sales, Production, and Direct Materials Budgets 24-8

Direct Labor, Manufacturing Overhead, and S&A Expense Budgets 24-13

Cash Budget and Budgeted Balance Sheet 24-17

Budgeting in Nonmanufacturing Companies 24-22

25 Budgetary Control and Responsibility Accounting 25-1

Pumpkin Madeleines and a Movie: Tribeca Grand Hotel 25-1

Budgetary Control and Static Budget Reports 25-3

Flexible Budget Reports 25-6

Responsibility Accounting and Responsibility Centers 25-13

Investment Centers 25-22

Appendix 25A: ROI vs. Residual Income 25-26

26 Standard Costs and Balanced Scorecard 26-1

80,000 Different Caffeinated Combinations: Starbucks 26-2

Overview of Standard Costs 26-3

Direct Materials Variances 26-7

Direct Labor and Manufacturing Overhead Variances 26-11

Variance Reports and Balanced Scorecards 26-16

Appendix 26A: Standard Cost Accounting System 26-20

Appendix 26B: Overhead Controllable and Volume Variances 26-23

27 Planning for Capital Investments 27-1

Floating Hotels: Holland America Line 27-2

Capital Budgeting and Cash Payback 27-3

Net Present Value Method 27-6

Capital Budgeting Challenges and Refinements 27-11

Internal Rate of Return 27-16

Annual Rate of Return 27-18

Appendix A Specimen Financial Statements: Apple Inc. A-1

Appendix B Specimen Financial Statements: PepsiCo, Inc. B-1

Appendix C Specimen Financial Statements: The Coca-Cola Company C-1

Appendix D Specimen Financial Statements: Amazon.com, Inc. D-1

Appendix E Specimen Financial Statements: Wal-Mart Stores, Inc. E-1

Appendix F Specimen Financial Statements: Louis Vuitton F-1

Appendix G Time Value of Money G-1

Interest and Future Values G-1

Present Values G-7

Capital Budgeting Situations G-14

Using Financial Calculators G-15

Appendix H Just-in-Time Processing and Activity-Based Costing H-1

Just-in-Time Processing and Activity-Based Costing H-1

Applying Activity-Based Costing H-4

Cases for Managerial Decision-Making

Company Index I-1

Subject Index I-4

Rewards Program

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