Introduction to Financial Accounting 11th Edition

Cover......Page 1
Title Page......Page 2
Copyright Page......Page 3
About the Authors......Page 4
Contents......Page 7
Preface......Page 11
Acknowledgements......Page 15
Starbucks Coffee......Page 17
The Nature of Accounting......Page 20
The Balance Sheet......Page 24
Balance Sheet Transactions......Page 25
Types of Ownership......Page 32
Accounting Differences Between Proprietorships, Partnerships, and Corporations......Page 34
Stockholders and the Board of Directors......Page 37
Regulation of Financial Reporting......Page 38
The Accounting Profession......Page 40
Career Opportunities for Accountants......Page 43
Highlights to Remember......Page 46
Assignment Material......Page 47
General Mills......Page 59
Introduction to Income Measurement......Page 61
Measuring Income......Page 67
The Income Statement......Page 71
Accounting for Dividends and Retained Earnings......Page 76
Four Popular Financial Ratios......Page 80
The Portfolio......Page 84
Conceptual Framework......Page 90
Other Basic Concepts And Conventions......Page 93
Highlights to Remember......Page 95
Assignment Material......Page 96
Delta Air Lines......Page 111
The Double-Entry Accounting System......Page 113
Debits and Credits......Page 116
The Recording Process......Page 117
Analyzing, Journalizing, and Posting the Biwheels Transactions......Page 120
Biwheels’ Transactions in the Journal and Ledger......Page 127
Preparing the Trial Balance......Page 130
Effects of Errors......Page 137
Incomplete Records......Page 139
Data Processing and Accounting Systems......Page 140
Accounting Vocabulary......Page 142
Assignment Material......Page 143
Columbia Sportswear......Page 161
Adjustments to the Accounts......Page 163
I. Expiration or Consumption of Unexpired Costs......Page 164
II. Earning of Revenues Received in Advance......Page 165
III. Accrual of Unrecorded Expenses......Page 167
IV. Accrual of Unrecorded Revenues......Page 170
The Adjusting Process in Perspective......Page 172
Classified Balance Sheet......Page 177
Income Statement......Page 182
Profitability Evaluation Ratios......Page 186
Highlights to Remember......Page 190
Assignment Material......Page 191
Costco......Page 209
Overview of Statement of Cash Flows......Page 210
Preparing a Statement of Cash Flows......Page 213
Cash Flow from Operating Activities......Page 220
The Statement of Cash Flows and the Balance Sheet Equation......Page 228
Examples of Statements of Cash Flows......Page 230
The Importance of Cash Flow......Page 232
Highlights to Remember......Page 239
Assignment Material......Page 240
Oracle Corporation......Page 259
Recognition of Sales Revenue......Page 260
Measurement of Sales Revenue......Page 263
Credit Sales and Accounts Receivable......Page 269
Measurement of Uncollectible Accounts......Page 270
Assessing the Level of Accounts Receivable......Page 277
Accounting for and Managing Cash......Page 279
Overview of Internal Control......Page 280
Highlights to Remember......Page 284
Appendix 6: Bank Reconciliations......Page 285
Accounting Vocabulary......Page 287
Assignment Material......Page 288
The Home Depot......Page 305
Gross Profit and Cost of Goods Sold......Page 306
Perpetual and Periodic Inventory Systems......Page 307
Cost of Merchandise Acquired......Page 310
Comparing Accounting Procedures for Periodic and Perpetual Inventory Systems......Page 312
Principal Inventory Valuation Methods......Page 314
Lower-of-Cost-or-Market Method......Page 320
Effects of Inventory Errors......Page 322
Cutoff Errors and Inventory Valuation......Page 324
The Importance of Gross Profi ts......Page 325
Internal Control of Inventories......Page 329
Highlights to Remember......Page 331
Appendix 7A: Characteristics and Consequences of LIFO......Page 332
Appendix 7B: Inventory in a Manufacturing Environment......Page 336
Assignment Material......Page 338
Intel Corporation......Page 359
Overview of Long-Lived Assets......Page 361
Contrasting Long-Lived Asset Expenditures with Expenses......Page 363
Acquisition Cost of Tangible Assets......Page 364
Depreciation of Buildings and Equipment......Page 366
Changes in Estimated Useful Life or Residual Value......Page 370
Depreciation and Cash Flow......Page 371
Expenditures after Acquisition......Page 374
Gains and Losses on Sales of Tangible Assets......Page 375
Revaluation of Tangible Assets......Page 379
Intangible Assets......Page 381
Goodwill......Page 385
Highlights to Remember......Page 387
Assignment Material......Page 389
Jack in the Box......Page 407
Liabilities in Perspective......Page 408
Accounting for Current Liabilities......Page 410
Long-Term Liabilities......Page 415
Bond Accounting......Page 420
Accounting for Leases......Page 429
Other Long-Term Liabilities, Including Pensions and Deferred Taxes......Page 434
Debt Ratios and Interest-Coverage Ratios......Page 441
Highlights to Remember......Page 442
Appendix 9: Compound Interest, Future Value, and Present Value......Page 443
Accounting Vocabulary......Page 450
Assignment Material......Page 451
United Parcel Service (UPS)......Page 469
Background on Stockholders’ Equity......Page 472
Accounting For Common Stock in Publicly Held Corporations......Page 473
Preferred Stock......Page 477
Stock Options and Restricted Stock......Page 481
Stock Splits and Stock Dividends......Page 483
Repurchase of Shares......Page 488
Other Issuances of Common Stock......Page 493
Retained Earnings Restrictions......Page 494
Financial Ratios Related to Stockholders’ Equity......Page 495
Highlights to Remember......Page 497
Assignment Material......Page 498
Coca-Cola Company......Page 513
An Overview of Corporate Investments......Page 514
Short-Term Investments......Page 515
Long-Term Investments in Bonds......Page 520
The Market and Equity Methods for Intercorporate Equity Investments......Page 522
Consolidated Financial Statements......Page 525
Purchase Price not Equal to Book Value......Page 536
Summary of Accounting for Equity Securities......Page 537
Highlights to Remember......Page 538
Accounting Vocabulary......Page 539
Assignment Material......Page 540
Nike......Page 553
Sources of Information About Companies......Page 555
Objectives of Financial Statement Analysis......Page 556
Evaluating Trends and Components of the Business......Page 558
Financial Ratios......Page 569
Operating Performance and Financing Decisions......Page 576
Prominence of Earnings Per Share......Page 582
Disclosure of Irregular Items......Page 584
Valuation Issues......Page 588
Relating Cash Flow and Net Income......Page 591
Highlights to Remember......Page 595
Assignment Material......Page 596
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U......Page 641
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Photo Credits......Page 648