Accounting: Tools for Business Decision Making, 2nd Edition

by Paul D. Kimmel (Univ. of Wisconsin-Milwaukee); Jerry J. Weygandt (Univ. of Wisconsin, Madison); Donald E. Kieso (Northern Illinois Univ.)

• ISBN13: 9780470087442
• ISBN10: 0470087447
• Edition: 2nd
• Format: Hardcover
• Copyright: 2007-01-01
• Publisher: Wiley

Summary

Offering a unique approach in the field, this book presents the principles of accounting from a corporate perspective. This provides readers with a real-world understanding of the concepts. It starts with a discussion of real financial statements first, clearly showing how they communicate the financing, operation, and investing activities of a business. The book then helps readers gain the skills, and the confidence they need to use those skills effectively in making business decisions.

Author Biography

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, the Reggie Taite Excellence in Teaching Award, and a three-time winner of the Outstanding Teaching Assistant 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 the Institute of Management Accountants 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.

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 seved 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. In addition, he has been actively involved with the American Institute of Certified Public Accountants and has been a member of the Accounting Standards Executive Committee (AcSEC) of that organization. He has served on the FASB task force that examined the reporting issues related to accounting for income taxes and served as a trustee of the Financial Accounting Foundation.
Professor Weygandt has received the Chancellor’s Award for Excellence in Teaching and the Beta Gamma Sigma Dean’s Teaching Award. He is on the board of directors of M & I Bank of Southern Wisconsin. He is the recipient of the Wisconsin Institute of CPA’s Outstanding Educator’s Award and the Lifetime Achievement Award. In 2001 he received the American Accounting Association’s Outstanding Accounting Educator Award.

Donald E. Kieso, PhD, CPA, received his bachelor’s degree from Aurora University and his doctorate in accounting from the University of Illinois. He has served as chairman of the Department of Accountancy and is currently the KPMG Emeritus Professor of Accountancy 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 has served as a member of the Board of Directors of the Illinois CPA Society, the AACSB’s Accounting Accreditation Committees, the State of Illinois Comptroller’s Commission, as Secretary-Treasurer of the Federation of Schools of  Accountancy, and as Secretary-Treasurer of the American Accounting Association. Professor Kieso is currently serving on the Board of Trustees and Executive Committee of Aurora University, as a member of the Board of Directors of Kishwaukee Community Hospital, and as Treasurer and Director of Valley West Community Hospital. From 1989 to 1993 he served as a charter member of the national Accounting Education Change Commission. He is the recipient of the Outstanding Accounting Educator Award from the Illinois CPA Society, the FSA’s Joseph A. Silvoso Award of Merit, the NIU Foundation’s Humanitarian Award for Service to Higher Education, a Distinguished Service Award from the Illinois CPA Society, and in 2003 an honorary doctorate from Aurora University.

Table of Contents

Introduction to Financial Statements

Forms of Business Organization

Users and Uses of Financial Information

Business Activities

Communicating with Users

A Quick Look at Tootsie Rolls Financial Statements

A Further Look at Financial Statements

The Financial Statements Revisited

The Classified Balance Sheet

Using the Financial Statements

Financial Reporting Concepts

The Standard-Setting Environment

Characteristics of Useful Information

Assumptions and Principles in Financial Reporting

Constraints in Accounting

The Accounting Information System

Information System

The Accounting Information System

Accounting Transactions

The Account

Steps in the Recording Process

The Recording Process Illustrated

The Trial Balance

Accrual Accounting Concepts

Concepts

What Was Your Profit?

Timing Issues

The Basics of Adjusting Entries

The Adjusted Trial Balance and Financial Statements

Closing the Books

Quality of Earnings

Appendix Adjusting Entries in an Automated World Using a Work Sheet

Merchandising Operations and the Multiple-Step

Income Statement

Merchandising Operations

Recording Purchases of Merchandise

Recording Sales of Merchandise

Income Statement Presentation

Evaluating Profitability

Appendix Periodic Inventory System

Recording Merchandise Transactions

Recording Purchases of Merchandise

Recording Sales of Merchandise

Reporting and Analyzing Inventory

Classifying Inventory

Determining Inventory Quantities

Inventory Costing

Analysis of Inventory

Inventory Cost Flow Methods in Perpetual Inventory Systems

First-In, First-Out (FIFO)

Last-In, First-Out (LIFO)

Average Cost

Inventory Errors

Income Statement Effects

Balance Sheet Effects

Internal Control and Cash

Internal Control

Cash Controls

Reporting Cash

Managing and Monitoring Cash

Appendix Operation of the Petty Cash Fund

Reporting and Analyzing Receivables

Types of Receivables

Accounts Receivable

Notes Receivable

Financial Statement Presentation of Receivables

Managing Receivables

Reporting and Analyzing Long-Lived Assets

Plant Assets

Determining the Cost of Plant Assets

Accounting for Plant Assets

Analyzing Plant Assets

Intangible Assets

Accounting for Intangible Assets

Types of Intangible Assets

Financial Statement Presentation of Long-Lived Assets

Appendix Calculation of Depreciation Using Other Methods

Reporting and Analyzing Liabilities

Current Liabilities

What Is a Current Liability?

Types of Current Liabilities

Long-Term Liabilities

Bond Basics

Accounting for Bond Issues

Accounting for Bond Retirements

Financial Statement Presentation and Analysis

Off-Balance-Sheet Financing

Straight-Line Amortization

Effective-Interest Amortization

Accounting for Long-Term Notes Payable

Reporting and Analyzing Stockholders Equity

The Corporate Form of Organization

Stock Issue Considerations

Accounting for Treasury Stock

Preferred Stock

Dividends

Retained Earnings

Financial Statement Presentation of Stockholders Equity

Measuring Corpora

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