Accounting: Concepts and Applications , Tenth Edition

✍ Scribed by W. Steve Albrecht, James D. Stice, Earl K. Stice, Monte R. Swain

• Publisher: South-Western College Pub
• Year: 2007
• Tongue: English
• Leaves: 1339
• Edition: 10
• Category: Library

✦ Synopsis

No matter what your career plans or future goals, ACCOUNTING: CONCEPTS AND APPLICATIONS, 10e helps you develop a solid understanding of accounting and its importance in business today that will put you well ahead of the competition. Organized around business activities, the text balances an introduction to accounting procedures with an emphasis on decision making. You not only learn the mechanics of preparing accounting information, but also how to use what you're learning to make stronger business decisions. This edition's lively, intriguing writing style is packed with actual examples showing how real, leading companies throughout the country use accounting information to make better business decisions. New Experience Accounting videos bring accounting principles to life within organizations such as Hard Rock Cafe. Proven learning features emphasize the relevance of what you're learning, help you refine your accounting skills, and assist you in learning how to effectively analyze accounting information. Reorganized, streamlined chapters help build a strong, practical context around the procedures of accounting. To maximize each minute of study and help you efficiently complete homework, the new CengageNOW online learning system provides interactive tools and a personalized learning path that focuses only on the accounting procedures and concepts you still need to master for business success.

✦ Table of Contents

Front Cover......Page 1
Title Page......Page 2
Copyright......Page 3
CONTENTS......Page 20
PART ONE: FINANCIAL REPORTING AND THE ACCOUNTING CYCLE......Page 34
1 ACCOUNTING INFORMATION: USERS AND USES......Page 36
What’s the Purpose of Accounting?......Page 38
Who Uses Accounting Information......Page 42
Within What Kind of Environment Does Accounting Operate?......Page 46
So, Why Should I Study Accounting?......Page 53
End-of-Chapter Materials......Page 54
2 FINANCIAL STATEMENTS: AN OVERVIEW......Page 61
The Financial Statements......Page 63
Notes to the Financial Statements......Page 79
The External Audit......Page 80
Fundamental Concepts and Assumptions......Page 82
End-of-Chapter Materials......Page 84
3 THE MECHANICS OF ACCOUNTING......Page 108
How Can We Collect All This Information?......Page 109
How Do Transactions Affect the Accounting Equation?......Page 112
How Do We Record the Effects of Transactions?......Page 119
Posting Journal Entries and Preparing a Trial Balance......Page 130
Where Do Computers Fit In All This?......Page 137
End-of-Chapter Materials......Page 139
4 COMPLETING THE ACCOUNTING CYCLE......Page 162
Accrual Accounting......Page 163
Adjusting Entries......Page 168
Preparing Financial Statements......Page 176
Closing the Books......Page 181
A Summary of the Accounting Cycle......Page 184
End-of-Chapter Materials......Page 185
5 ENSURING THE INTEGRITY OF FINANCIAL INFORMATION......Page 218
The Types of Problems that Can Occur......Page 220
Safeguards Designed to Minimize Problems......Page 223
Reasons for Earnings Management......Page 228
The Sarbanes-Oxley Act......Page 234
The Role of Auditors in the Accounting Process......Page 235
The Securities and Exchange Commission......Page 240
End-of-Chapter Materials......Page 242
Comprehensive Problem 1–5......Page 253
PART TWO: OPERATING ACTIVITIES......Page 256
6 SELLING A PRODUCT OR A SERVICE......Page 257
Major Activities of a Business......Page 261
Recognizing Revenue......Page 263
Cash Collection......Page 267
Accounting for Credit Customers Who Don’t Pay......Page 270
Assessing How Well Companies Manage Their Receivables......Page 277
Recording Warranty and Service Costs Associated with a Sale......Page 278
Reconciling the Bank Account......Page 280
Foreign Currency Transactions......Page 283
End-of-Chapter Materials......Page 286
7 INVENTORY......Page 315
Inventory and Cost of Goods Sold......Page 318
Accounting for Inventory Purchases and Sales......Page 322
Counting Inventory and Calculating Cost of Goods Sold......Page 328
Inventory Cost Flow Assumptions......Page 330
Assessing How Well Companies Manage Their Inventories......Page 336
Inventory Errors......Page 339
Complications of the Perpetual Method with LIFO and Average Cost......Page 342
Reporting Inventory at Amounts below Cost......Page 344
Method of Estimating Inventories......Page 346
End-of-Chapter Materials......Page 348
8 COMPLETING THE OPERATING CYCLE......Page 374
Employee Compensation......Page 377
Taxes......Page 384
Contingencies......Page 388
Capitalize versus Expense......Page 391
Summarizing Operations on an Income Statement......Page 393
End-of-Chapter Materials......Page 397
Comprehensive Problem 6–8......Page 417
PART THREE: INVESTING AND FINANCING ACTIVITIES......Page 420
9 INVESTMENTS IN PROPERTY, PLANT, AND EQUIPMENT AND IN INTANGIBLE ASSETS......Page 421
Nature of Long-Term Operating Assets......Page 424
Deciding Whether to Acquire a Long-Term Operating Asset......Page 425
Accounting for Acquisition of Property, Plant, and Equipment......Page 426
Calculating and Recording Depreciation Expense......Page 432
Repairing and Improving Property, Plant, and Equipment......Page 438
Recording Impairments of Asset Value......Page 440
Disposal of Property, Plant, and Equipment......Page 442
Accounting for Intangible Assets......Page 444
Measuring Property, Plant, and Equipment Efficiency......Page 449
Accelerated Depreciation Methods......Page 450
Changes in Depreciation Estimates and Methods......Page 455
End-of-Chapter Materials......Page 456
10 LONG-TERM DEBT FINANCING......Page 486
Measuring Long-Term Liabilities......Page 488
Accounting for Long-Term Liabilities......Page 494
Accounting for Lease Obligations......Page 498
The Nature of Bonds......Page 501
Using Debt-Related Financial Ratios......Page 509
Bonds Issued at a Discount or at a Premium......Page 511
End-of-Chapter Materials......Page 521
11 EQUITY FINANCING......Page 546
Raising Equity Financing......Page 549
Corporations and Corporate Stock......Page 551
Accounting for Stock......Page 554
Retained Earnings......Page 559
Other Equity Items......Page 564
End-of-Chapter Materials......Page 567
12 INVESTMENTS IN DEBT AND EQUITY SECURITIES......Page 592
Why Companies Invest in Other Companies......Page 594
Classifying a Security......Page 597
Accounting for Trading and Available-for-Sale Securities......Page 601
Accounting for Changes in the Value of Securities......Page 604
Accounting for Held-to-Maturity Securities......Page 607
Accounting for Equity Investments Using the Equity Method......Page 613
Consolidated Financial Statements......Page 615
End-of-Chapter Materials......Page 618
Comprehensive Problem 9–12......Page 642
PART FOUR: OTHER DIMENSIONS OF FINANCIAL REPORTING......Page 644
13 THE STATEMENT OF CASH FLOWS......Page 646
What’s the Purpose of a Statement of Cash Flows?......Page 648
What Information Is Reported in the Statement of Cash Flows?......Page 649
Preparing a Statement of Cash Flows—A Simple Example......Page 653
Analyzing the Other Primary Financial Statements to Prepare a Statement of Cash Flows......Page 656
Using Information from the Statement of Cash Flows to Make Decisions......Page 668
End-of-Chapter Materials......Page 670
14 INTRODUCTION TO FINANCIAL STATEMENT ANALYSIS......Page 700
The Need for Financial Statement Analysis......Page 702
Widely Used Financial Ratios......Page 704
Common-Size Financial Statements......Page 709
DuPont Framework......Page 712
More Efficiency Ratios......Page 715
More Leverage Ratios......Page 718
Cash Flow Ratios......Page 719
Potential Pitfalls......Page 722
End-of-Chapter Materials......Page 724
PART FIVE: FOUNDATIONS OF MANAGEMENT ACCOUNTING......Page 758
15 MANAGEMENT ACCOUNTING AND COST CONCEPTS......Page 760
Management Accounting as a Competitive Tool......Page 762
Management Accounting and Financial Accounting......Page 763
Managerial Accounting Terminology......Page 767
The Role of Ethics in Management Accounting......Page 774
End-of-Chapter Materials......Page 776
16 COST FLOWS AND BUSINESS ORGANIZATIONS......Page 790
The Flow of Products and Costs in Manufacturing Firms......Page 792
Accounting for Overhead......Page 801
The Cost of Goods Manufactured Schedule......Page 806
The Flow of Products and Costs in Service and Merchandising Firms......Page 808
The Process Costing System......Page 815
End-of-Chapter Materials......Page 822
17 ACTIVITY-BASED COSTING......Page 860
Activity-Based Costing......Page 861
Overhead Cost Activities......Page 864
Cost Drivers......Page 869
Assigning Overhead to Production Using ABC......Page 871
Making Decisions Using ABC Data......Page 873
End-of-Chapter Materials......Page 879
Comprehensive Problem 15–17......Page 901
PART SIX: CONTROL IN A MANAGEMENT ACCOUNTING SYSTEM......Page 902
18 BUDGETING AND CONTROL......Page 903
Purposes of Personal Budgeting......Page 906
The Budgeting Process in Organizations......Page 908
The Master Budget......Page 911
Budgeting in Merchandising and Service Firms......Page 922
Static versus Flexible Budgeting......Page 930
Cash Budget......Page 934
Pro-Forma Financial Statements......Page 937
End-of-Chapter Materials......Page 941
19 CONTROLLING COST, PROFIT, AND INVESTMENT CENTERS......Page 975
Control of Divisions and Personnel in Different Types of Operating Units......Page 978
Standard Cost Systems......Page 982
Determining Standard Costs......Page 983
Controlling Performance in Cost Centers......Page 984
Controlling Performance in Profit Centers......Page 992
Evaluating Performance in Investment Centers......Page 997
Variable Manufacturing Overhead Variances in Cost Centers......Page 1001
Fixed Manufacturing Overhead Variances in Cost Centers......Page 1005
End-of-Chapter Materials......Page 1009
PART SEVEN: MAKING DECISIONS USING MANAGEMENT ACCOUNTING......Page 1040
20 COST BEHAVIOR AND DECISIONS USING C-V-P ANALYSIS......Page 1042
Understanding Why C-V-P Analysis Is Important......Page 1044
Basic Cost Behavior Patterns......Page 1045
Analysis of Mixed Costs......Page 1050
Methods of C-V-P Analysis......Page 1054
Using Graphs to “See” C-V-P Relationships......Page 1063
Sales Mix......Page 1068
Cost Structure and Operating Leverage......Page 1070
End-of-Chapter Materials......Page 1074
Comprehensive Problem 18–20......Page 1105
21 RELEVANT INFORMATION AND DECISIONS......Page 1108
Differential Costs, Sunk Costs, and Decision Making......Page 1110
Accepting or Rejecting Special Orders......Page 1114
Making or Buying Products......Page 1117
Exiting or Entering a Market......Page 1121
Determining at What Stage of Production to Sell Products......Page 1125
Selecting the Best Use of a Scarce Resource......Page 1127
Setting Selling Prices......Page 1129
End-of-Chapter Materials......Page 1131
22 CAPITAL INVESTMENT DECISIONS......Page 1151
Conceptual Basis of Capital Budgeting......Page 1154
Nondiscounted Capital Budgeting Techniques......Page 1158
Discounted Capital Budgeting Techniques......Page 1161
Comparative Example of Capital Budgeting Techniques......Page 1168
Qualitative Factors in Strategic and Capital Investment Decisions......Page 1170
Dealing with Uncertainty in Strategic and Capital Investment Decisions......Page 1172
Capital Rationing......Page 1174
Income Tax Considerations in Capital Budgeting Decisions......Page 1176
Appendix: The Time Value of Money......Page 1179
End-of-Chapter Materials......Page 1189
Comprehensive Problem 21–22......Page 1206
PART EIGHT: CONTINUOUS IMPROVEMENT IN MANAGEMENT ACCOUNTING......Page 1208
23 NEW MEASURES OF PERFORMANCE......Page 1210
Adding Value to Investors’ Money......Page 1212
Managing Time and Quality......Page 1214
Let’s Take a Flight!......Page 1223
The Balanced Scorecard......Page 1224
Accounting for Tomorrow......Page 1239
End-of-Chapter Materials......Page 1240
A: WAL-MART 2006 ANNUAL REPORT......Page 1260
B: GLOSSARY......Page 1292
C: CHECK FIGURES......Page 1306
SUBJECT......Page 1314
REAL WORLD COMPANY......Page 1336