Accounting / Edition 23

by Carl S. Warren, James M. Reeve, Jonathan Duchac

Overview

The most successful higher education text of all time keeps getting better. The authors adapt their proven approach to accounting's evolving role in business and use the preparation of financial statements as the framework for understanding what accounting is all about.

Product Details

ISBN-13:	9780324662962
Publisher:	Cengage Learning
Publication date:	07/30/2008
Edition description:	23
Pages:	1215
Product dimensions:	9.30(w) x 10.90(h) x 1.90(d)

About the Author

Dr. Carl S. Warren is professor emeritus of accounting at the University of Georgia, Athens. For more than 25 years, Dr. Warren has taught all levels of accounting courses with a primary focus on introductory of accounting and auditing. Dr. Warren has taught classes at the University of Iowa, Michigan State University and the University of Chicago. He received his Ph.D. from Michigan State University and his B.A.A. and M.A. from the University of Iowa. During his career, Dr. Warren published numerous articles in professional journals, including The Accounting Review, Journal of Accounting Research, Journal of Accountancy, The CPA Journal and Auditing: A Journal of Practice and Theory. Dr. Warren s outside interests include handball, backpacking, skiing, hiking, fly-fishing and golf. He also spends as much time as possible visiting with his five grandchildren (two sets of twins). Dr. Warren resides in Bozeman, Montana.


Dr. Christine A. Jonick is Professor of Accounting at University of North Georgia, Gainesville. She received her Ed.D. from the University of Georgia, her M.B.A. from Adelphi University and her B.A. from State University of New York at Binghamton. Dr. Jonick has focused her teaching efforts on principles of accounting and intermediate financial accounting. She is the recipient of several teaching awards, including one for excellence in online instruction. She has published accounting-related articles in research journals and a case study in the IMA Journal. Dr. Jonick serves on numerous professional committees, is an active board member for the American Accounting Association SE and is a recent past president of the Georgia Association of Accounting Educators. Dr. Jonick has worked with accounting textbook publishers for more than a decade as a technology consultant, subject-matter expert and content developer. Her outside interests include travel, biking, technology development and family activities.


Jennifer S. Schneider is an associate professor at the University of North Georgia (UNG), Gainesville. Professor Schneider has taught principles of accounting, survey of accounting, principles of finance, accounting information systems and auditing. She is a Florida C.P.A. and began her career at PwC. She has more than 15 years of experience with Fortune 50 companies, primarily in audit and financial/SEC reporting. Prior to joining the University of North Georgia, Professor Schneider taught at the University of Amsterdam. Her research interests are in the scholarship of teaching and learning. Professor Schneider has published several articles, including an article in the Institute of Management Accountants (IMA) Educational Case Journal. She has also served as faculty advisor for Beta Alpha Psi, which is an international honors organization for financial information students and professionals. Professor Schneider enjoys spending time on the Atlanta BeltLine and with her two sons, Luke and Graeme.

Table of Contents

1	Introduction to Accounting and Business	1
	Nature of a Business	2
	The Role of Accounting in Business	6
	Business Ethics	7
	Profession of Accounting	8
	Generally Accepted Accounting Principles	10
	Assets, Liabilities, and Owners' Equity	11
	Business Transactions and the Accounting Equation	12
	Financial Statements	16
	Financial Analysis and Interpretation	19
2	Analyzing Transactions	45
	Usefulness of an Account	46
	Characteristics of an Account	48
	Analyzing and Summarizing Transactions in Accounts	49
	Illustration of Analyzing and Summarizing Transactions	54
	Trial Balance	67
	Discovery and Correction of Errors	68
	Financial Analysis and Interpretation	70
3	The Matching Concept and the Adjusting Process	99
	The Matching Concept	100
	Nature of the Adjusting Process	101
	Recording Adjusting Entries	102
	Summary of Adjustment Process	110
	Financial Analysis and Interpretation	114
4	Completing the Accounting Cycle	137
	Work Sheet	138
	Financial Statements	139
	Adjusting and Closing Entries	141
	Accounting Cycle	149
	Fiscal Year	149
	Financial Analysis and Interpretation	151
Appendix	Reversing Entries	152
	Comprehensive Problem 1	175
	Practice Set: Tom's Asphalt Sealing
5	Accounting Systems and Internal Controls	179
	Basic Accounting Systems	180
	Internal Control	181
	Manual Accounting Systems	186
	Adapting Manual Accounting Systems	197
	Computerized Accounting Systems	198
6	Accounting for Merchandising Businesses	225
	Nature of Merchandising Businesses	226
	Accounting for Purchases	227
	Accounting for Sales	231
	Transportation Costs	236
	Illustration of Accounting for Merchandise Transactions	238
	Chart of Accounts for a Merchandising Business	239
	Income Statement for a Merchandising Business	240
	The Accounting Cycle for a Merchandising Business	244
	Financial Analysis and Interpretation	246
Appendix 1	Accounting Systems for Merchandisers	248
Appendix 2	Work Sheet and Adjusting and Closing Entries for a Merchandising Business	251
	Comprehensive Problem 2	273
	Practice Set: The Snow Shop
	Practice Set: Hazzard Travel
7	Cash	279
	Nature of Cash and the Importance of Controls Over Cash	280
	Control of Cash Receipts	281
	Internal Control of Cash Payments	283
	Bank Accounts: Their Nature and Use as a Control Over Cash	285
	Bank Reconciliation	289
	Petty Cash	292
	Presentation of Cash on the Balance Sheet	293
	Financial Analysis and Interpretation	294
8	Receivables	313
	Classification of Receivables	314
	Internal Control of Receivables	315
	Uncollectible Receivables	316
	Allowance Method of Accounting for Uncollectibles	317
	Direct Write-Off Method of Accounting for Uncollectibles	321
	Characteristics of Notes Receivable	322
	Accounting for Notes Receivable	324
	Receivables on the Balance Sheet	326
	Financial Analysis and Interpretation	327
Appendix	Discounting Notes Receivable	328
9	Inventories	349
	Internal Control of Inventories	350
	Effect of Inventory Errors on Financial Statements	352
	Inventory Cost Flow Assumptions	353
	Inventory Costing Methods Under a Perpetual Inventory System	354
	Inventory Costing Methods Under a Periodic Inventory System	358
	Comparing Inventory Costing Methods	362
	Valuation of Inventory at Other than Cost	364
	Presentation of Merchandise Inventory on the Balance Sheet	365
	Estimating Inventory Cost	366
	Financial Analysis and Interpretation	368
10	Fixed Assets and Intangible Assets	389
	Nature of Fixed Assets	390
	Accounting for Depreciation	393
	Capital and Revenue Expenditures	398
	Disposal of Fixed Assets	400
	Leasing Fixed Assets	404
	Internal Control of Fixed Assets	405
	Natural Resources	406
	Intangible Assets	407
	Financial Reporting for Fixed Assets and Intangible Assets	408
	Financial Analysis and Interpretation	409
Appendix	Sum-of-the-Years-Digits Depreciation	410
11	Current Liabilities	431
	The Nature of Current Liabilities	432
	Short-Term Notes Payable	433
	Contingent Liabilities	435
	Payroll and Payroll Taxes	436
	Accounting Systems for Payroll and Payroll Taxes	442
	Employees' Fringe Benefits	449
	Financial Analysis and Interpretation	452
	Comprehensive Problem 3	470
	Practice Set: The Coddled Canine
12	Corporations: Organization, Capital Stock Transactions, and Dividends	475
	Nature of a Corporation	476
	Stockholders' Equity	479
	Sources of Paid-In Capital	480
	Issuing Stock	483
	Treasury Stock Transactions	485
	Stock Splits	487
	Accounting for Dividends	487
	Financial Analysis and Interpretation	490
13	Corporations: Income and Taxes, Stockholders' Equity, and Investments in Stocks	509
	Corporate Income Taxes	510
	Unusual Items that Affect the Income Statement	513
	Earnings per Common Share	515
	Reporting Stockholders' Equity	517
	Comprehensive Income	519
	Accounting for Investments in Stocks	520
	Business Combinations	525
	Financial Analysis and Interpretation	528
	Practice Set: Nina Decorating House
	Practice Set: First Designs, Inc.
14	Bonds Payable and Investments in Bonds	549
	Financing Corporations	550
	Characteristics of Bonds Payable	552
	The Present-Value Concept and Bonds Payable	553
	Accounting for Bonds Payable	556
	Bond Sinking Funds	560
	Bond Redemption	561
	Investments in Bonds	562
	Corporation Balance Sheet	564
	Financial Analysis and Interpretation	566
Appendix	Effective Interest Rate Method of Amortization	567
	Comprehensive Problem 4	583
15	Statement of Cash Flows	589
	Purpose of the Statement of Cash Flows	590
	Reporting Cash Flows	590
	Statement of Cash Flows--The Indirect Method	594
	Statement of Cash Flows--The Direct Method	603
	Financial Analysis and Interpretation	607
Appendix	Work Sheet for Statement of Cash Flows	609
16	Financial Statement Analysis	641
	Basic Analytical Procedures	642
	Solvency Analysis	647
	Profitability Analysis	653
	Summary of Analytical Measures	658
	Corporate Annual Reports	660
17	Introduction to Managerial Accounting and Job Order Cost Systems	685
	The Differences Between Managerial and Financial Accounting	686
	The Management Accountant in the Organization	687
	Manufacturing Cost Terms	689
	Cost Accounting System Overview	691
	Job Order Cost Systems for Manufacturing Businesses	692
	Job Order Costing for Decision Making	702
	Job Order Cost Systems for Professional Service Businesses	705
	Practice Set: Sunblaze Inc.
18	Process Cost Systems	733
	Comparing Job Order Costing and Process Costing	734
	Physical Flows and Cost Flows for a Process Manufacturer	735
	The First-In, First-Out (Fifo) Method	737
	Bringing It All Together: The Cost of Production Report	743
	Journal Entries for a Process Cost System	744
	Using the Cost of Production Report for Decision Making	746
	Just-in-Time Processing	747
19	Cost Behavior and Cost-Volume-Profit Analysis	769
	Cost Behavior	770
	Cost-Volume-Profit Relationships	776
	Mathematical Approach to Cost-Volume-Profit Analysis	778
	Graphic Approach to Cost-Volume-Profit Analysis	783
	Sales Mix Considerations	787
	Special Cost-Volume-Profit Relationships	789
	Assumptions of Cost-Volume-Profit Analysis	790
Appendix	Variable Costing	791
20	Budgeting	817
	Nature and Objectives of Budgeting	818
	Budgeting Systems	821
	Master Budget	825
	Income Statement Budgets	825
	Balance Sheet Budgets	832
21	Performance Evaluation Using Variances from Standard Costs	865
	Standards	866
	Budgetary Performance Evaluation	868
	Direct Materials Variances	870
	Direct Labor Variances	872
	Factory Overhead Variances	874
	Recording and Reporting Variances from Standards	879
	Standards for Nonmanufacturing Expenses	880
	Nonfinancial Performance Measures	881
22	Performance Evaluation for Decentralized Operations	901
	Centralized and Decentralized Operations	902
	Responsibility Accounting for Cost Centers	904
	Responsibility Accounting for Profit Centers	906
	Responsibility Accounting for Investment Centers	909
	Transfer Pricing	915
23	Differential Analysis and Product Pricing	943
	Differential Analysis	944
	Setting Normal Product Selling Prices	952
	Product Profitability and Pricing Under Production Bottlenecks	958
Appendix	Activity-Based Costing	961
24	Capital Investment Analysis	983
	Nature of Capital Investment Analysis	984
	Methods of Evaluating Capital Investment Proposals	985
	Factors That Complicate Capital Investment Analysis	994
	Capital Rationing	996
Appendix A	Interest Tables	2
Appendix B	Codes of Professional Ethics for Accountants	1
Appendix C	Alternative Methods of Recording Deferrals	1
Appendix D	Periodic Inventory Systems for Merchandising Businesses	1
Appendix E	Foreign Currency Transactions	1
Appendix F	Partnerships	1
Appendix G	Cisco Systems, Inc., Annual Report	1
	Glossary	1
	Subject Index	1
	Company Index	1

Editorial Reviews

"These exercises [Activation Exercises in CNOWv2] are interactive and actually allow students to experiment with the data, visually viewing the impact when data is altered. The exercises show not only how a transaction looks in the journal and ledger accounts, but also the impact it ultimately has on financial statements. Finally, students are challenged to analyze the overall impact of a transaction by answering questions related to the topic. This is an excellent learning tool."

"Multi-Panel View [in CNOWv2] makes it much easier for students to see how each piece of the accounting cycle impacts the other pieces. Having it all in one view reduces student frustration and gives them a clearer picture of the complete accounting cycle."

"Good tool [Blank Sheet of Paper Experience in CNOWv2] to make students understand concepts without overly relying on technology's help."

"I like it [Blank Sheet of Paper Experience in CNOWv2] because it appears to bridge the gap between the homework and my exam."

"This [Blank Sheet of Paper Experience in CNOWv2] will minimize students' complaints about how the exam looks different from the homework format."

From the Publisher