Financial Accounting A Bridge to Decision Making

by Ingram, Robert W.; Albright, Thomas L.; Baldwin, Bruce A.

• ISBN13: 9780324183986
• ISBN10: 0324183984
• Edition: CD
• Format: Hardcover
• Copyright: 2003-04-11
• Publisher: South-Western College Pub

Summary

This text is written for a one semester course in introductory accounting, generally titled "Financial Accounting," and is written for students who have no prior knowledge of accounting and accounting systems. This text is appropriate for the course where heavy emphasis is on concepts, with some mention of procedures also included.

Table of Contents

SECTION F1 The Accounting Information System	1	(282)
Accounting and Organizations	2	(42)
Information for Decisions	3	(2)
The Purpose of Organizations	5	(3)
Transformation of Resources	6	(1)
Creating Value	7	(1)
The Role of Accounting in Business Organizations	8	(2)
The Structure of Business Organizations	10	(6)
Business Ownership	10	(1)
Management of Corporations	11	(2)
Advantages of Corporations	13	(1)
Disadvantages of Corporations	13	(1)
Creditors	14	(2)
Accounting and Business Decisions	16	(4)
Risk and Return	16	(4)
The Regulatory Environment of Accounting	20	(2)
The Importance of Ethics	22	(1)
A Short Introduction to Excel	23	(21)
Identifying and Selecting Cells	23	(1)
Referencing and Mathematical Operations	23	(1)
Copying Cell Contents	24	(1)
Changing Column Widths	24	(1)
Menus	24	(1)
Buttons	25	(19)
Business Activities---The Source of Accounting Information	44	(38)
Financing Activities	45	(1)
Accounting for Business Activities	46	(1)
Investing Activities	47	(3)
Operating Activities	50	(3)
Financial Reporting and Analysis	53	(6)
The Income Statement	54	(1)
The Balance Sheet	55	(1)
The Statement of Cash Flows	56	(1)
The Transformation Process	57	(1)
Financial Analysis	58	(1)
Debits and Credits: Another Way to Record Transactions	59	(23)
Measuring Revenues and Expenses	82	(46)
Accrual Accounting	83	(1)
Revenue Transactions	84	(3)
Expense Transactions	87	(3)
Adjusting Account Balances	90	(3)
Ledger Accounts	93	(1)
Closing Entries and Financial Statements	94	(6)
Summary of Account Balances	94	(1)
Income Statement	94	(1)
Closing Entries	95	(3)
Payments to Owners	98	(1)
Post-Closing Account Balances	98	(1)
Balance Sheet	98	(2)
Statement of Cash Flows	100	(1)
Summary of Accounting Cycle	100	(1)
Accounting and Ethics	100	(28)
Reporting Earnings and Financial Position	128	(51)
The Purpose of Financial Statements	129	(1)
The Income Statement	130	(6)
Gross Profit	131	(1)
Operating Income	131	(1)
Other Revenues and Expenses	132	(1)
Income Taxes	132	(1)
Net Income	132	(1)
Earnings Per Share	132	(1)
Other Reporting Issues	133	(3)
The Balance Sheet	136	(2)
Current Assets	136	(1)
Property and Equipment	137	(1)
Liabilities	137	(1)
Stockholders' Equity	137	(1)
Other Balance Sheet Content	138	(4)
Other Current Assets	138	(1)
Other Long-Term Assets	138	(2)
Other Current Liabilities	140	(1)
Other Long-Term Liabilities	140	(1)
Stockholders' Equity and Comprehensive Income	140	(2)
The Statement of Stockholders' Equity	142	(1)
Use of Financial Statements	143	(36)
Interrelationships among Financial Statements	143	(1)
Limitations of Financial Statements	144	(35)
Reporting Cash Flows	179	(45)
The Statement of Cash Flows	180	(1)
The Direct Format	180	(5)
Operating Activities	181	(3)
Investing Activities	184	(1)
Financing Activities	184	(1)
The Indirect Format	185	(4)
Interpreting Cash Flows	189	(35)
Full and Fair Reporting	224	(31)
The Purpose of Accounting Regulation	225	(3)
Sources of Accounting Regulation	226	(2)
Creating Accounting Standards	228	(3)
Standard-Setting Organizations	228	(1)
The Standard-Setting Process	229	(1)
The FASB's Conceptual Framework	230	(1)
Disclosure and Fair Representation	231	(7)
Summary Business Data	231	(1)
Management's Discussion and Analysis	231	(2)
Notes to the Financial Statements	233	(2)
The Auditors' Report	235	(2)
Report of Management Responsibilities	237	(1)
Internal Controls	238	(3)
Management Philosophy	238	(1)
Business Ethics	238	(2)
Computer System Controls	240	(1)
Human Resources Controls	240	(1)
Physical Controls	241	(1)
Conclusion	241	(1)
The Responsibilities of Accountants	241	(14)
Computerized Accounting Systems	255	(28)
Components of a Computerized Accounting System	256	(2)
Data Processing in a Computerized System	258	(3)
Accounting System Modules	261	(5)
The Sales Module	261	(2)
The Purchasing and Inventory Management Module	263	(1)
The Human Resources Module	264	(1)
The Production Module	265	(1)
The Structure of Accounting Systems	266	(2)
An Illustration of an Accounting System	268	(15)
Copying and Opening the Database	268	(1)
Database Contents	268	(1)
Tables	269	(1)
Entering Transactions	269	(1)
Sales Orders	269	(1)
Shipping Information	270	(1)
Receiving Goods	271	(1)
Billing Customers	272	(1)
Reporting Sales and Income	272	(1)
Cash Receipts and Accounts Receivable	272	(1)
Summary	273	(10)
SECTION F2 Analysis and Interpretation of Financial Accounting Information	283
The Time Value of Money	284	(35)
Future Value	285	(7)
Compound Interest	286	(2)
Future Value of an Annuity	288	(4)
Present Value	292	(4)
Present Value of an Annuity	294	(2)
Loan Payments and Amortization	296	(4)
Unequal Payments	300	(1)
Combining Single Amounts and Annuities	301	(1)
Summary of Future and Present Value Concepts	301	(18)
Financing Activities	319	(43)
Types of Obligations	320	(1)
Debt Obligations	321	(6)
Short-Term Debt	321	(1)
Long-Term Debt	321	(2)
Debt Transactions	323	(4)
Financial Reporting of Debt	327	(1)
Other Obligations	328	(3)
Contingencies	328	(1)
Commitments	329	(1)
Capital Leases	329	(2)
Stockholders' Equity	331	(3)
Contributed Capital	332	(1)
Retained Earnings	333	(1)
Changes in Stockholders' Equity	334	(3)
Equity Transactions	334	(2)
Cash Dividends	336	(1)
Issuing New Stock	336	(1)
Stock Dividends	336	(1)
Preferred Stock	337	(2)
International Reporting of Financing Activities	339	(1)
Other Related Topics	339	(23)
Stock Options	339	(1)
Noncontrolling Interest	340	(1)
Appropriation of Retained Earnings	340	(1)
Foreign Currency Adjustments	340	(22)
Analysis of Financing Activities	362	(40)
Financing Decisions	363	(5)
Capital Structure Decisions	363	(2)
The Effect of Financial Leverage	365	(3)
Effects of Financing Decisions on Cash Flow and Liquidity	368	(1)
Dividend Decisions	368	(1)
Other Financing Alternatives	369	(1)
Interpretation of Financing Activities	369	(2)
A General Overview	370	(1)
Comparing Capital Structures	371	(1)
The Effect of Financial Leverage on Risk and Return	371	(2)
Other Risk Considerations	373	(2)
Financing Activities and Company Value	375	(27)
Investing Activities	402	(44)
Types of Assets	403	(1)
Property, Plant, and Equipment	404	(8)
Plant Asset Cost	405	(1)
Depreciation	406	(6)
Disposing of Plant Assets	412	(1)
Natural Resources	412	(1)
Long-Term and Short-Term Investments	413	(6)
Types of Securities	413	(1)
Held-To-Maturity Securities	414	(1)
Trading Securities and Available-for-Sale Securities---Investments in Debt	415	(1)
Trading Securities and Available-for-Sale Securities---Investments in Equity	416	(2)
Short-Term Investments	418	(1)
Intangible Assets	419	(1)
Other Long-Term Assets	420	(1)
Financial Reporting of Investing Activities	420	(2)
Other Investment Issues	422	(24)
Equity Method	422	(1)
Consolidations	423	(23)
Analysis of Investing Activities	446	(33)
Investing Decisions	447	(6)
Investment Decisions and Profit	448	(2)
Investment Decisions and Risk	450	(3)
Interpretation of Investing Activities	453	(3)
Identifying Investing Activities	453	(1)
The Importance of Asset Growth	454	(1)
Measuring the Effects of Growth	454	(2)
The Effect of Investment on Effectiveness and Efficiency	456	(2)
Investing Activities and Creditor Decisions	458	(21)
Operating Activities	479	(51)
Basic Operating Activities	480	(1)
Revenues and Receivables	481	(6)
Recognizing Revenue for Long-Term Contracts	481	(1)
Sales Discounts and Returns	482	(3)
Uncollectible Accounts	485	(1)
Warranty Costs	486	(1)
Inventories and Cost of Goods Sold	487	(4)
Reporting Inventories and Cost of Goods Sold	488	(3)
Measuring Inventory	491	(7)
Perpetual and Periodic Inventory Methods	491	(4)
Inventory Estimation and Income Taxes	495	(2)
Comparing Inventory Costs among Companies	497	(1)
Other Operating Activities and Income Statement Items	498	(4)
Operating Expenses	499	(1)
Other Revenues and Expenses	500	(1)
Income Taxes	500	(1)
Nonrecurring Gains and Losses	500	(2)
Other Topics	502	(28)
Equity Income	502	(1)
Noncontrolling Interest in Income	502	(1)
Deferred Compensation	503	(27)
Analysis of Operating Activities	530
Operating Decisions	531	(1)
Developing an Operating Strategy	532	(3)
Interpretation of Operating Activities	535	(6)
Cost Leadership and Product Differentiation Strategies	535	(2)
Comparing Accrual and Cash Flow Measures of Operating Performance	537	(1)
Further Evaluation of Operating Strategy	537	(3)
Linking Operating and Investing Activities with Financing Activities	540	(1)
The Big Picture	541
Appendix A Coca-Cola Annual Report: Letter to Shareholders	1	(1)
Appendix B General Mills, Inc. 2002 Annual Report	1	(1)
Appendix C Sources of Information About Companies and Industries	1	(1)
Glossary	1	(1)
Index	1