The new edition of this widely used and respected introductory accounting textbook continues to provide students and academics with a well written and accessible resource, with ample illustrations and applications to business for a first study of accounting.The text effectively maintains the balance between a 'user' and 'preparer' perspective by integrating real financial information and business decisions throughout. Through the use of real company information and financial statements students will quickly appreciate the use and users of accounting information. The textbook clearly outlines to students how a financial statement - such as a balance sheet, income statement, cash flow statement - communicates the financing, operating, and investing activities of a business. The text builds a strong conceptual understanding and develops skills in the application of accounting principles and techniques, providing students with a solid foundation for further studies in accounting. The integral role of financial statements for decision making is also emphasised in this text and is reinforced throughout by the Decision Toolkit in each chapter. Students are provided with an extensive set of tools necessary to make business decisions based on financial information.
The third edition will continue to engage, excite and educate students.
Table of Contents
Chapter 1: An introduction to accounting
Introduction to accounting
Forms of business organisation
Other forms of business organisation
Users and uses of financial information
Financial statements
Interrelationships of statements
The financial reporting environment
Concepts, principles and qualitative characteristics
Analysing financial statements
Chapter 2: The accounting information System
The accounting information system
Accounting transactions and events
The account
Steps in the recording process
The recording process illustrated
The trial balance
Chapter 3: Accrual accounting concepts
Timing issues
The basics of adjusting entries
The adjusted trial balance and financial statements
Closing the books
Summary of the accounting cycle
Appendix: adjusting entries - using a work sheet
Chapter 4: Inventories
Merchandising operations
Recording purchases of inventories
Recording sales of inventories
Income statement presentation
Evaluating profitability
Appendix: overview of the GST process
Appendix: accounting for GST
Chapter 5: Reporting and analysing inventory
Classifying inventory
Periodic inventory system
Inventory cost flow methods - periodic system
Valuing inventory at the lower of cost and net realisable value
Analysis of inventory
Appendix 5A: inventory cost flow methods - perpetual system
First-in, first-out (FIFO)
Last-in, first-out (LIFO)
Average cost
Appendix 5B: inventory errors
Effects on profit
Effects on assets and equity
Appendix 5C: closing entries for merchandising firms
Chapter 6: Accounting sub-systems
Basic concepts of accounting information systems
Control accounts and subsidiary ledgers
Special journals
Computerised accounting information systems
Chapter 7: Internal control, cash & receivables
Internal control
Cash
Assessing cash adequacy
Receivables
Appendix A - operation of the petty cash fund
Chapter 8: Reporting & analysing non-current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Reporting and analysing issues
Chapter 9: Reporting & analysing liabilities
Current liabilities
Non-current liabilities
Loans payable by instalment
Provisions and contingent liabilities
Financial statement analysis
Chapter 10: Reporting and analysing equity
The corporate form of organisation
Share issues
Dividends
Reporting on shareholder's equity
Financial statement analysis and decision making
Debt versus equity financing decisions
Chapter 11: Statement of cash flows
The statement of cash flows: purpose and format
Preparing the statement of cash flows
Using cash flows to evaluate a company
Chapter 12: Financial statement analysis
Earning power and irregular items
Comparative analysis
Ratio analysis
Limitations of financial statement analysis
Chapter 13: Introduction to management accounting
Management accounting basics
Management cost concepts
Manufacturing costs in financial statements
Contemporary developments in management accounting
Chapter 14: Cost accounting systems
Cost accounting systems
Job order costing
Process costing
Chapter 15: Cost-volume-profit relationships
Cost behaviour analysis
Cost-volume-profit analysis
Break-even analysis
Chapter 16: Budgeting
Budgeting basics
Preparing the operating budgets
Preparing the budgeted financial statements
Budgeting in non-manufacturing entities
Budgetary control
The concept of responsibility accounting
Types of responsibility centres
Chapter 17: Incremental analysis and capital budgeting
Steps in management decision making
Incremental analysis
Types of incremental analysis
Capital budgeting
