Financial Accounting

by Stickney,Clyde P.

• ISBN13: 9780324222975
• ISBN10: 0324222971
• Edition: 11th
• Format: Hardcover
• Copyright: 2005-01-05
• Publisher: Cengage Learning

Summary

This widely respected financial accounting text captures the predominant market share among graduate, MBA, and higher-level undergraduate programs. With great clarity, it presents both the basic concepts underlying financial statements and the terminology and methods that allow students to interpret, analyze, and evaluate actual corporate financial statements.

Table of Contents

Preface	vii
Part 1 Overview of Financial Statements	1	(36)
Introduction to Business Activities and Overview of Financial Statements and the Reporting Process	2	(35)
Overview of Business Activities	3	(3)
Principal Financial Statements	6	(8)
Problem 1.1 for Self-Study	14	(1)
Other Items in Annual Reports	15	(2)
Financial Reporting Issues	17	(4)
The Financial Reporting Process in the United States	21	(2)
An International Perspective	23	(1)
Summary	23	(1)
Solution to Self-Study Problem	24	(1)
Key Terms and Concepts	25	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	26	(11)
Part 2 Accounting Concepts and Methods	37	(212)
Balance Sheet: Presenting the Investments and Financing of a Firm	38	(54)
Underlying Concepts	39	(6)
Problem 2.1 for Self-Study	45	(3)
Problem 2.2 for Self-Study	48	(1)
Accounting Procedures for Preparing the Balance Sheet	49	(2)
Problem 2.3 for Self-Study	51	(5)
Problem 2.4 for Self-Study	56	(1)
Problem 2.5 for Self-Study	57	(1)
Balance Sheet Account Titles	57	(3)
Problem 2.6 for Self-Study	60	(1)
Analysis of the Balance Sheet	61	(3)
An International Perspective	64	(4)
Summary	68	(1)
Solutions to Self-Study Problems	69	(4)
Key Terms and Concepts	73	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	73	(19)
Income Statement: Reporting the Results of Operating Activities	92	(46)
The Accounting Period Convention	93	(1)
Accounting Methods for Measuring Performance	94	(5)
Problem 3.1 for Self-Study	99	(1)
Measurement Principles of Accrual Accounting	99	(3)
Problem 3.2 for Self-Study	102	(1)
Accounting Procedures for Preparing the Income Statement	102	(7)
Problem 3.3 for Self-Study	109	(1)
Interpreting and Analyzing the Income Statement	110	(2)
Summary	112	(1)
Solutions to Self-Study Problems	113	(4)
Key Terms and Concepts	117	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	117	(21)
Statement of Cash Flows: Reporting the Effects of Operating, Investing, and Financing Activities on Cash Flows	138	(48)
Need for a Statement of Cash Flows	139	(1)
Overview of the Statement of Cash Flows	140	(4)
Problem 4.1 for Self-Study	144	(1)
Preparing the Statement of Cash Flows	145	(7)
Problem 4.2 for Self-Study	152	(1)
Problem 4.3 for Self-Study	153	(1)
An International Perspective	154	(1)
Problem 4.4 for Self-Study	154	(1)
Problem 4.5 for Self-Study	155	(1)
Using Information in the Statement of Cash Flows	156	(2)
Ethical Issues and the Statement of Cash Flows	158	(1)
Summary	159	(1)
Problem 4.6 for Self-Study	159	(1)
Solutions to Self-Study Problems	160	(6)
Key Terms and Concepts	166	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	166	(20)
Introduction to Financial Statement Analysis	186	(63)
Objectives of Financial Statement Analysis	188	(3)
Analysis of Profitability	191	(7)
Problem 5.1 for Self-Study	198	(7)
Problem 5.2 for Self-Study	205	(1)
Analysis of Risk	206	(4)
Problem 5.3 for Self-Study	210	(2)
Problem 5.4 for Self-Study	212	(1)
Limitations of Ratio Analysis	213	(1)
An International Perspective	213	(1)
Summary	214	(1)
Problem 5.5 for Self-Study	215	(2)
Appendix 5.1: Pro Forma Financial Statements and Valuation	217	(10)
Solutions to Self-Study Problems	227	(3)
Key Terms and Concepts	230	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	230	(19)
Part 3 Measuring and Reporting Assets and Equities Using Generally Accepted Accounting Principles	249	(333)
Receivables and Revenue Recognition	250	(44)
Financial Reporting Environment	251	(2)
Quality of Earnings	253	(1)
Review of Income Recognition Principles	254	(2)
Application of Income Recognition Principles	256	(1)
Problem 6.1 for Self-Study	257	(1)
Revenue Recognition at Time of Sale	257	(9)
Problem 6.2 for Self-Study	266	(2)
Analyzing Information on Accounts Receivable	268	(1)
Income Recognition at Times Different from Sale	269	(4)
Summary Illustration of Income Recognition Methods	273	(2)
Problem 6.3 for Self-Study	275	(1)
Format and Classification within the Income Statement	275	(2)
An International Perspective	277	(1)
Summary	277	(1)
Appendix 6.1: Effects on the Statement of Cash Flows on Transactions Involving Accounts Receivable	278	(1)
Solutions to Self-Study Problems	279	(2)
Key Terms and Concepts	281	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	282	(12)
Inventories: The Source of Operating Profits	294	(42)
A Review of Fundamentals	295	(2)
Issue 1: Costs Included in Inventory	297	(4)
Problem 7.1 for Self-Study	301	(1)
Issue 2: Valuation Subsequent to Acquisition	302	(2)
Issue 3: Cost Flow Assumptions	304	(4)
Problem 7.2 for Self-Study	308	(3)
Problem 7.3 for Self-Study	311	(1)
Analyzing Inventory disclosures	312	(3)
Problem 7.4 for Self-Study	315	(1)
Problem 7.5 for Self-Study	316	(1)
An International Perspective	316	(1)
Summary	317	(1)
Appendix 7.1: Effects on the Statement of Cash Flows of Transactions Involving Inventory	317	(1)
Solutions to Self-Study Problems	318	(3)
Key Terms and Concepts	321	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	322	(14)
Long-Lived Tangible and Intangible Assets: The Source of Operating Capacity	336	(48)
Capitalization versus Immediate Expensing	338	(3)
Measurement of Acpuisition Cost	341	(2)
Problem 8.1 for Self-Study	343	(1)
Treatment of Acquisition Cost Over Life of Asset	344	(1)
Depreciation and Amortization: Fundamental Concepts	345	(1)
Depreciation and Amortization: Measurement	346	(6)
Problem 8.2 for Self-Study	352	(1)
Impact of New Information about Long-Lived Assets	353	(2)
Problem 8.3 for Self-Study	355	(1)
Problem 8.4 for Self-Study	356	(4)
Problem 8.5 for Self-Study	360	(1)
Retirement of Assets	360	(1)
Financial Statement Presentation	361	(1)
Analyzing Financial Statement Disclosures of Long-Lived Assets	362	(3)
Problem 8.6 for Self-Study	365	(1)
An International Perspective	365	(1)
Summary	366	(1)
Appendix 8.1: Effects on the Statement of Cash Flows of Transactions Involving Long-Lived Tangible and Intangible Assets	367	(2)
Solutions to Self-Study Problems	369	(2)
Key Terms and Concepts	371	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	371	(13)
Liabilities: Introduction	384	(52)
Basic Concepts of Liabilities	386	(5)
Current Liabilities	391	(3)
Problem 9.1 for Self-Study	394	(1)
Long-Term Liabilities	394	(4)
Problem 9.2 for Self-Study	398	(2)
Problem 9.3 for Self-Study	400	(6)
Problem 9.4 for Self-Study	406	(5)
Problem 9.5 for Self-Study	411	(3)
Problem 9.6 for Self-Study	414	(1)
Summary	415	(1)
Appendix 9.1: Effects on the Statement of Cash Flows of Transactions Involving Long-Term Liabilities	415	(1)
Solutions to Self-Study Problems	416	(8)
Key Terms and Concepts	424	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	424	(12)
Liabilities: Off-Balance-Sheet Financing, Leases, Deferred Income Taxes, Retirement Benefits	436	(40)
Off-Balance-Sheet Financing	437	(3)
Problem 10.1 for Self-Study	440	(1)
Leases	441	(6)
Problem 10.2 for Self-Study	447	(1)
Income Tax Accounting and Deferred Income Taxes	447	(4)
Problem 10.3 for Self-Study	451	(1)
Problem 10.4 for Self-Study	452	(3)
Deferred Compensation: Pension Benefits and Other Deferred Compensation	455	(2)
Deferred Compensation: Health Care and Other Benefits	457	(1)
An International Perspective	457	(1)
Summary	457	(1)
Appendix 10.1: Effects on the Statement of Cash Flows of Transactions Involving Liabilities	457	(1)
Solutions to Self-Study Problems	458	(5)
Key Terms and Concepts	463	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	463	(13)
Marketable Securities, Derivatives, and Investments	476	(54)
Overview of the Accounting and Reporting of Investments in Securities	477	(2)
Minority, Passive Investments	479	(1)
Problem 11.1 for Self-Study	480	(5)
Problem 11.2 for Self-Study	485	(2)
Derivative Instruments	487	(4)
Dealing with Uncertainty with Measurement, Not Recognition	491	(1)
Minority, Active Investments	492	(3)
Problem 11.3 for Self-Study	495	(1)
Majority, Active Investments	495	(2)
Problem 11.4 for Self-Study	497	(6)
Problem 11.5 for Self-Study	503	(2)
An International Perspective	505	(1)
Summary	505	(3)
Appendix 11.1: Effects on the Statment of Cash Flows of Investments in Securities	508	(1)
Solutions to Self-Study Problems	509	(4)
Key Terms and Concepts	513	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	514	(16)
Shareholders' Equity: Capital Contributions, Distributions, and Earnings	530	(52)
Capital Contributions	533	(1)
Issuing Capital Stock	534	(7)
Problem 12.1 for Self-Study	541	(1)
Corporate Distributions	542	(3)
Problem 12.2 for Self-Study	545	(2)
Problem 12.3 for Self-Study	547	(1)
Reporting Earnings Transactions	547	(10)
Problem 12.4 for Self-Study	557	(1)
Earnings and Book Value per Share	557	(1)
An International Perspective	558	(1)
Disclosure of Changes in Shareholders' Equity	559	(7)
Summary	566	(1)
Appendix 12.1: Effects on the Statement of Cash Flows of Transactions Involving Shareholders' Equity	566	(1)
Solutions to Self-Study Problems	567	(3)
Key Terms and Concepts	570	(1)
Questions, Short Exercises, Exercises, Problems, and Cases	570	(12)
Appendix	582	(21)
Compound Interest, Annuity, and Bond Tables	603	(8)
Glossary	611	(84)
Index	695