The prime objective of this long-established book is to provide the student with a broad perspective of business accounting based upon a sound conceptual framework. It does this by integrating the theory with the application, presenting accounting concepts as simply and directly as possible, and stimulating independent thought on the part of the reader.

R. J. Bull BSc (Econ), FCCA, is Former Director and Chief Executive at Polytechnic South West. Lindsey M. Lindley BSc, ACA, Cert Ed, is Senior Lecturer at Plymouth Business School, University of Plymouth. David A. Harvey BSc (Econ), MSc, PhD, IPFA, is Principal Lecturer at Plymouth Business School, University of Plymouth.

The Accounting Environment
The Scope and Environment of Business Accounting	p. 3
The Scope of Business Accounting	p. 4
The Nature and Place of Accounting Theory	p. 6
Accounting in Historical Perspective	p. 7
Questions for Discussion	p. 10
Financial Accounting Theory and Practice
The Balance Sheet	p. 13
The Accounting Environment	p. 13
The Environmental Postulates	p. 14
Business Entity	p. 16
The Balance Sheet	p. 16
The Nature of Assets	p. 18
The Valuation of Assets	p. 19
The Nature of Outside Liabilities	p. 20
The Balance Sheet Equation	p. 20
Questions for Discussion	p. 22
Income Measurement-Expense	p. 25
The Nature of Profit	p. 25
The Accrual Postulate	p. 26
The Accounting Period	p. 28
Definitions	p. 29
The Relationship between Cost and Expense	p. 29
The Accounting Equation	p. 30
Recording Transactions in the Quadrant	p. 36
The Income Statement and Balance Sheet	p. 38
Questions for Discussion	p. 40
Income Measurement-Revenue	p. 44
The Nature of Revenue	p. 44
The Realization Postulate	p. 45
'Revenue' and 'Receipts'	p. 47
Debtors, Bad Debts and Doubtful Debts	p. 51
Gross and Net Profit	p. 53
The Trading, Profit and Loss Account	p. 54
Accounting and Economic Profit	p. 57
The Assumptions and Conventions of Accounting	p. 58
Appendix-The Effect of Revenue Recognition on Reported Profit	p. 61
Questions for Discussion	p. 63
Accounting Records-An Introduction to Bookkeeping	p. 68
Analysis of Transactions using the Quadrant	p. 68
Debit and Credit	p. 69
The Account	p. 70
Analysis of Transactions using Accounts	p. 71
The Trial Balance	p. 72
The Trading, Profit and Loss Account	p. 73
The Position of Stock	p. 74
Asset and Liability Accounts	p. 75
The Balance Sheet	p. 76
Accruals and Prepayments	p. 77
Provisions	p. 80
The Journal and Day Books	p. 83
The Accounting Process	p. 85
The Sources of Financial Data	p. 86
Questions for Discussion	p. 86
Income Measurement-The Valuation and Depreciation of Fixed Assets	p. 92
The Nature of Depreciation	p. 93
The Cost of the Asset	p. 94
The Useful Life of the Asset	p. 95
The Salvage (Residual) Value of the Asset	p. 95
The Method of Depreciation	p. 96
Accounting for Depreciation	p. 101
Accounting for the Disposal of Fixed Assets	p. 103
Valuation of Fixed Assets	p. 104
Questions for Discussion	p. 105
Income Measurement-The Valuation of Current Assets	p. 110
The Valuation of Stock	p. 110
The Nature of Stock	p. 111
The Bases of Stock Valuation	p. 111
Accounting and Stock Valuation	p. 112
Historic Cost	p. 113
Historic Cost-Comparison of Methods	p. 115
The Valuation of Debtors	p. 118
Questions for Discussion	p. 121
Further Aspects of Financial Records	p. 128
Incomplete Records	p. 128
Control Accounts	p. 134
Verification of the Bank Account	p. 136
Questions for Discussion	p. 139
The Partnership	p. 146
The Nature of Partnership	p. 146
The Proprietary Theory	p. 148
The Partnership Agreement	p. 148
The Final Accounts	p. 151
Capital and Current Accounts	p. 154
The Admission of New Partners-the Valuation of Goodwill	p. 155
The Admission of New Partners-the Treatment of Goodwill	p. 157
Partnership Dissolution	p. 159
Questions for Discussion	p. 161
The Public Limited Company-Capital Structure and Financial Reporting	p. 168
The Public Limited Company, Partnership and Sole Trader-A Comparison	p. 168
Memorandum and Articles	p. 170
Shares and Share Capital	p. 172
Par Value and Market Value	p. 173
Share Premium	p. 175
Debentures	p. 176
Capitalization	p. 176
Capital Gearing	p. 177
Reserves-Their Purpose	p. 179
Types of Reserve	p. 180
Dividends	p. 181
Accounting Records and the Capital Structure	p. 182
Valuation of Shares	p. 187
The Final Accounts of Public Limited Companies	p. 190
Disclosure in Company Accounts	p. 194
Statutory Requirements and Published Accounts	p. 196
Appendix-Companies Act 1985-Schedule 4-Profit and loss-Format 1	p. 198
Questions for Discussion	p. 198
The Public Limited Company-Changes in Capital Structure and Groups of Companies	p. 204
Changes in Capital Structure	p. 204
Groups of Companies	p. 212
Questions for Discussion	p. 217
Value and Income Measurement	p. 222
Concepts of Value	p. 222
Value to the Business	p. 226
The Nature of Income-An Economic View	p. 227
Income Measurement in Accounting	p. 230
Income Measurement and Inflation	p. 230
The Nature of Price Changes	p. 232
Partial Solutions to Changing Price Levels	p. 233
Adjustments for General Price Changes-CPP Accounting	p. 235
Current Cost Accounting	p. 239
The Cost of Sales Adjustment	p. 243
The Depreciation Adjustment	p. 244
The Monetary Working Capital Adjustment	p. 246
The Gearing Adjustment	p. 246
Comparison of the Two Schools of Thought	p. 248
Questions for Discussion	p. 249
Financial Planning and Control
Elements of Cost Accounting	p. 255
The Meaning of Cost	p. 255
The Elements of Cost	p. 256
Financial Records and Cost Flow	p. 257
Income Statements for Manufacturing Business	p. 259
Responsibility Accounting	p. 259
Accounting for Materials	p. 260
Accounting for Labour	p. 260
Accounting for Overhead	p. 261
Absorption Costing	p. 263
Marginal Costing	p. 265
Cost Accounting Systems-Job Costing	p. 266
Cost Accounting Systems-Process Costing	p. 270
Absorption and Marginal Costing Compared	p. 276
Questions for Discussion	p. 279
Budgets and Budgetary Control	p. 285
Planning and Control	p. 285
The Management Process	p. 286
The Nature of Budgets	p. 289
Budgets-Objectives and Benefits	p. 289
Budgets and Behaviour	p. 290
The Framework and Construction of Budgets	p. 291
Profit Budgets-The Sales Budget	p. 292
Profit Budgets-The Production Budget	p. 297
Profit Budgets-Administration, Finance and Selling Budgets	p. 301
Budgeted Income Statement	p. 301
Flexible Budgets	p. 301
Resource Budgets	p. 303
Budget Review	p. 304
Questions for Discussion	p. 305
Standard Costs and Variance Analysis	p. 312
Nature and Purpose of Standard Costs	p. 312
The Setting of Standards	p. 313
Variance Computation and Analysis	p. 314
Material Variances	p. 314
Labour Variances	p. 316
Other Variances	p. 318
Sales Variances	p. 321
Summary of Variance Formulae	p. 323
Recording Standard Costs	p. 324
Standards and Probability	p. 327
Questions for Discussion	p. 328
Accounting for Business Decisions-The Capital Investment Decision	p. 332
Business Objectives	p. 332
The Decision-making Process	p. 333
Capital Investment Decisions	p. 334
Net Present Value and Yield Methods Compared	p. 339
The Cost of Capital	p. 341
Taxation and the Investment Proposal	p. 344
Capital Investment and Risk	p. 347
Questions for Discussion	p. 352
Accounting for Business Decisions-Short-term Decisions	p. 356
Costs and Decision-making	p. 356
'Make or Buy' Decisions	p. 357
'Continue or Abandon' Decisions	p. 359
'Pricing' Decisions	p. 360
Limiting Factors	p. 362
Break-even Analysis	p. 364
Operational Research	p. 369
Questions for Discussion	p. 374
The Management of Working Capital	p. 382
The Working Capital Cycle	p. 382
The Investment in Stock	p. 385
The Investment in Debtors	p. 388
Types of Debtors	p. 388
The Determinants of Investment in Debtors	p. 389
The Need for Cash	p. 390
Questions for Discussion	p. 391
Performance Analysis	p. 394
Business Objectives	p. 394
The Tools of Performance Analysis	p. 395
Tests of Profitability	p. 395
Profitability and Capital Structure	p. 401
Tests of Liquidity	p. 402
Investment Ratios	p. 403
Cash Flow Analysis	p. 404
Bases for Comparison	p. 411
Problems of Analysis and Comparison	p. 414
Summary	p. 416
Questions for Discussion	p. 416
Suggested solutions to numerical questions	p. 423
Index	p. 497
Table of Contents provided by Ingram. All Rights Reserved.

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Accounting in Business

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