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| Preface | |
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| Instructions and Study Plan | |
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| The Balance Sheet | |
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| What Is a Balance Sheet? | |
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| The Balance Sheet-What Good Is It? | |
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| Does the Balance Sheet Really Show Financial Position? | |
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| Does the Balance Sheet Actually Show What You Think It May? | |
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| How Are Assets Valued? | |
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| Why Are Nonmonetary Assets Reported at Cost? | |
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| Balance Sheet Illustrations | |
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| Balance Sheet Categories | |
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| Balance Sheet Relationships | |
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| Balance Sheet Terminology | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| The Income Statement | |
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| What Is the Income Statement's Purpose? | |
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| What Is Net Income? | |
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| What Is Revenue? | |
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| The Accrual Concept | |
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| What Is an Expense? | |
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| Some Other Offsets to Revenue | |
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| What Are Income Taxes? | |
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| Interest and Dividends | |
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| Income Statement Illustrated | |
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| Comments on Illustrative Income Statement | |
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| Test Problem | |
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| Revenue Data | |
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| Expense Data | |
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| Required | |
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| Test Problem Solution Space | |
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| The Accounting Structure | |
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| Management Decisions | |
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| Business Forms | |
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| The Accounting Journal | |
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| The Accounting Ledger | |
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| The Ledger Account | |
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| Asset and Expense Accounts | |
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| Equity and Revenue Accounts | |
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| The Process of Recording Complete Transactions | |
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| The General Journal | |
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| Comments on Figures 3.7 and 3.8 | |
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| Closing Entries Revisited | |
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| Use of Subsidiary Ledgers | |
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| The Trial Balance | |
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| The Financial Statements | |
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| Conclusion | |
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| Test Problem | |
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| Transaction Data (Month of July) | |
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| Test Problem Solution Space | |
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| The Accounting Cycle | |
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| Elements of the Accounting Cycle | |
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| What Is Meant, by the Accounting Period? | |
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| What and Why Are Adjusting Entries? | |
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| Problem Data | |
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| The Worksheet | |
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| The Worksheet-Comments | |
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| Financial Statements | |
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| Are Interim Statements Dependable? | |
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| Internal Control Structure | |
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| Conclusion | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Working Capital | |
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| What Is Working Capital? | |
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| Cash Receipts Transactions | |
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| Cash Disbursement Transactions | |
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| Marketable Securities | |
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| Accounts Receivable | |
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| Inventories | |
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| Prepayments | |
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| Current Liabilities | |
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| What Can Your Accountants Do for You? | |
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| The Budget | |
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| The Cash Budget | |
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| Comments on Cash Budget Illustration | |
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| Control of Receivables | |
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| Comments on Aging Schedule | |
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| Test Problem | |
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| Test Problem Solution Space | |
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| Statement of Cash Flows | |
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| Cash Receipts and Disbursement Statement | |
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| Major Sources and Uses of Cash | |
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| "Funds" Provided by Operations | |
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| Extended Example | |
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| Certain Noncash Items | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Inventories | |
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| What Are Inventories? | |
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| Typical Inventory Transactions | |
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| Inventory Valuation | |
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| Specific Identification Method | |
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| First-in, First-out | |
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| What Are Inventory Profits and Holding Gains? | |
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| Last-in, First-out | |
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| Dollar Value LIFO | |
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| Average Cost | |
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| Cost or Market, the Lower | |
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| Inventory Turnover | |
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| Inventory Reports for Management | |
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| Gross Profit (or Gross Margin) Method of Inventory Estimation | |
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| Example | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Property, Plant, and Equipment and Depreciation | |
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| Classes of Noncurrent (Long-Term) Assets | |
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| Initial Valuation of Property, Plant, and Equipment | |
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| Historical Cost Less Depreciation | |
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| Replacement Cost | |
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| Depreciation of Property, Plant, and Equipment | |
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| What Is Depreciation? | |
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| Depreciation Patterns | |
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| Straight-Line Depreciation | |
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| Wavy-Line Depreciation | |
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| Decreasing-Line Depreciation | |
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| Composite and Group Depreciation | |
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| Typical Depreciation Entries | |
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| A Caveat | |
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| Change of Depreciation Estimates | |
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| Depreciation Fallacies | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Corporation Accounts | |
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| What Is Unique about Corporation Accounting? | |
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| The Issue of Capital Stock with Par Value | |
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| The Issue of Capital Stock with No Par Value | |
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| The Issue of Capital Stock for Property | |
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| Treasury Stock-What, Why, and How? | |
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| Stock Splits-What, Why and How? | |
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| Stock Rights | |
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| Stock Options | |
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| Stock Warrants | |
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| Convertible Preferred Stock | |
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| Callable Preferred Stock | |
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| Common Stock Equivalents | |
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| Earnings Per Share | |
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| Organization Costs | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Dividends and Reserves | |
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| What Is a True Dividend? | |
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| Corporate Investment in Affiliated Company | |
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| Liquidating "Dividends" | |
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| Stock Dividends | |
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| What Do Accountants Mean by "Reserves"? | |
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| Contra Accounts Used to Be Called Reserves | |
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| Some Liabilities Used to Be Called Reserves | |
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| Retained Earnings May Be Reserved | |
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| Deferred Credits when in Doubt | |
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| Cumulative Preferred Stock | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Long-Term Debt | |
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| Why Go into Debt? | |
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| Installment Purchases | |
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| Leases and Sale-and-Leaseback Transactions | |
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| Long-Term Notes | |
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| Mortgage Loans | |
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| Mortgage and Debenture Bonds | |
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| Sale of Bonds Between Interest Payment Dates | |
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| Convertible Bonds | |
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| Bonds with Warrants Attached | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Basic Cost Accounting | |
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| What Is Cost Accounting? | |
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| What Are the Purposes of Cost Accounting? | |
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| Job-Order versus Process Cost Accounting | |
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| Use of Subsidiary Ledgers | |
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| Job-Order Cost Accounting | |
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| Process Cost Accounting | |
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| Test Problem | |
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| Test Problem Solution Space | |
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| Cost Standards | |
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| What's a Standard? | |
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| Illustration of Standards-Standard Cost per Unit | |
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| Raw Materials Standards | |
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| Raw Materials Accounting-Standard Costs | |
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| Direct Labor Accounting-Standard Costs | |
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| Manufacturing Overhead Accounting-Standard Costs | |
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| Standard Cost Applications | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Internal Management Accounting | |
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| The Concept of Management Accounting | |
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| Responsibility Accounting | |
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| Standard Costing | |
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| Direct Costing | |
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| Differential Costs and Related Decisions | |
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| Should We Make It or Buy It? | |
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| Decisions to Acquire Plant Assets | |
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| Miscellaneous Topics | |
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| Test Problem | |
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| Test Problem Solution Space | |
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| Federal Income Tax Concepts | |
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| Taxpayers and Tax Returns | |
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| Accounting Periods and Methods | |
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| Income | |
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| Deductions | |
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| Property Transactions | |
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| Credits Against Tax | |
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| Rate Structure | |
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| Tax Shelters | |
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| Summary | |
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| Test Problems | |
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| Personal Computers and Software | |
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| Acknowledgment | |
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| Consolidated Statements | |
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| What Is a Consolidated Statement? | |
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| Why Isn't a Consolidated Statement a Combined Statement? | |
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| Consolidation Buzz Words | |
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| Elimination Entries | |
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| Where Are Elimination Entries Recorded? | |
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| Consolidation of Balance Sheets at Acquisition Date | |
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| Consolidated Balance Sheet Sometime Later | |
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| Consolidation of Income Statements | |
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| Consolidated Statements-Conclusion | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Income Tax Allocation | |
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| Why Bother? | |
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| What Conditions Make Interperiod Allocation Necessary? | |
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| General Principles of Interperiod Allocation | |
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| Revenue Recognized before It Is Taxed | |
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| Expenses Recognized before They Become Tax Deductions | |
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| Revenue Taxed before It Is Recognized | |
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| Expenses as Tax Deductions before They Are Recognized | |
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| Tax Allocation and Permanent Differences | |
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| Arguments Against Tax Allocation | |
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| Tax Allocation with in a Period | |
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| Test Problems | |
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| Business Combinations: Mergers, Acquisitions, and Consolidations | |
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| How Business Combinations Are Achieved | |
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| Valuation Using the Purchase Method | |
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| The Physiology of an Acquisition Under the Purchase Method | |
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| Impact of Acquisition Transaction on Income | |
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| Required Disclosure under the Purchase Method | |
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| Test Problem | |
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| Required | |
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| Test Problem Solution Space | |
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| Accounting for Foreign Operations | |
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| Our Foreign Relations | |
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| Accounts Receivable | |
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| Accounts Payable | |
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| Foreign Branches | |
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| Foreign Subsidiaries | |
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| Accounting for Receivables and Payables | |
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| Foreign Branch Accounting | |
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| Foreign Currency Translation | |
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| Identifying a Foreign Entity's Functional Currency | |
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| Accounting for the Cumulative Translation Adjustment | |
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| Solutions to Tests | |
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| Supplementary Problems | |
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| Solutions to Supplementary Problems | |
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| Index | |
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| Final Examination | |
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| About the Authors | |