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SECTION 1 The Role of Accounting as an Information System |
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Chapter 1 Environment and Theoretical Structure of Financial Accounting |
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2 | (48) |
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Part A Financial Accounting Environment |
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4 | (1) |
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The Economic Environment and Financial Reporting |
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5 | (4) |
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The Investment-Credit Decision---A Cash Flow Prespective |
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6 | (1) |
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Cash versus Accrual Accounting |
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7 | (2) |
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The Development of Financial Accounting and Reporting Standards |
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9 | (10) |
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Historical Perspective and Standards |
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9 | (3) |
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The Establishment of Accounting Standards---A Political Process |
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12 | (1) |
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13 | (3) |
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16 | (1) |
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Finanical Reporting Reform |
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16 | (2) |
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A Move Away from Rules-Based Standards |
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18 | (1) |
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19 | (1) |
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Ethics and Professionalism |
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19 | (1) |
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Analytical Model for Ethical Decisions |
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19 | (1) |
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Part B The Conceptual Framework |
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20 | (1) |
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Objective of Financial Reporting |
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21 | (1) |
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Qualitative Characteristics of Financial Reporting Information |
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22 | (3) |
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Fundamental Qualitative Characteristics |
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23 | (1) |
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Enhancing Qualitative Characteristics |
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24 | (1) |
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Practical Boundaries (Constraints) to Achieving Desired Qualitative Characteristics |
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25 | (1) |
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25 | (1) |
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25 | (1) |
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26 | (1) |
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Elements of Financial Statements |
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26 | (1) |
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Recognition and Measurement Concepts |
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27 | (6) |
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27 | (1) |
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28 | (1) |
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28 | (1) |
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Broad Accounting Principles |
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29 | (4) |
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Evolution of Accounting Principles |
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33 | (5) |
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The Asset/Liability Approach |
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33 | (1) |
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The Move toward Fair Value |
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34 | (4) |
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Questions for Review of Key Topics |
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38 | (1) |
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38 | (1) |
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39 | (4) |
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CPA and CMA Review Questions |
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43 | (2) |
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45 | (5) |
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Chapter 2 Review of the Accounting Process |
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50 | (62) |
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52 | (3) |
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52 | (1) |
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53 | (2) |
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The Accounting Processing Cycle |
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55 | (9) |
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Concept Review Exercise: Journal Entries for External Transactions |
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64 | (2) |
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66 | (8) |
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67 | (3) |
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70 | (2) |
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72 | (2) |
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Concept Review Exercise: Adjusting Entries |
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74 | (2) |
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Preparing the Financial Statements |
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76 | (3) |
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76 | (1) |
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77 | (1) |
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The Statement of Cash Flows |
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78 | (1) |
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The Statement of Shareholders' Equity |
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79 | (1) |
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79 | (2) |
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Concept Review Exercise: Financial Statement Preparation and Closing |
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81 | (2) |
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Conversion from Cash Basis to Accrual Basis |
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83 | (4) |
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Appendix 2A Use of a Worksheet |
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87 | (1) |
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Appendix 2B Reversing Entries |
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88 | (2) |
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Appendix 2C Subsidiary Ledgers and Special Journals |
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90 | (3) |
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Questions for Review of Key Topics |
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93 | (1) |
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93 | (1) |
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94 | (7) |
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101 | (1) |
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102 | (7) |
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109 | (3) |
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Chapter 3 The Balance Sheet and Financial Disclosures |
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112 | (56) |
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115 | (1) |
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Usefulness and Limitations |
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115 | (1) |
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116 | (7) |
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116 | (4) |
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120 | (1) |
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121 | (2) |
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Concept Review Exercise: Balance Sheet Classification |
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123 | (1) |
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Part B Financial Disclosures |
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124 | (1) |
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125 | (3) |
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Summary of Significant Accounting Policies |
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125 | (1) |
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125 | (1) |
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Noteworthy Events and Transactions |
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126 | (2) |
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Management Discussion and Analysis |
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128 | (1) |
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Management's Responsibilities |
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128 | (1) |
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129 | (2) |
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Compensation of Directors and Top Executives |
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131 | (1) |
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132 | (1) |
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Using Financial Statement Information |
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132 | (1) |
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133 | (7) |
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135 | (5) |
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Appendix 3 Reporting Segment Information |
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140 | (3) |
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Questions for Review of Key Topics |
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143 | (1) |
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144 | (1) |
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145 | (8) |
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CPA and CMA Review Questions |
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153 | (1) |
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154 | (6) |
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160 | (8) |
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Chapter 4 The Income Statement and Statement of Cash Flows |
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168 | (64) |
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Part A The Income Statement and Comprehensive Income |
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170 | (1) |
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Income From Continuing Operations |
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170 | (5) |
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Revenues, Expenses, Gains, and Losses |
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170 | (2) |
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172 | (1) |
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Operating versus Nonoperating Income |
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172 | (1) |
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172 | (3) |
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175 | (5) |
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Manipulating Income and Income Smoothing |
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175 | (1) |
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Operating Income and Earning Quality |
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176 | (3) |
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Nonoperating Income and Earnings Quality |
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179 | (1) |
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Separately Reported Items |
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180 | (8) |
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Intraperiod Income Tax Allocation |
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180 | (2) |
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182 | (4) |
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186 | (1) |
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Unusual or Infrequent Items |
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187 | (1) |
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188 | (4) |
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Change in Accounting Principle |
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188 | (1) |
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Change in Depreciation, Amortization, of Depletion Method |
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189 | (1) |
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Change in Accounting Estimate |
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190 | (1) |
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Change in Reporting Entity |
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191 | (1) |
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Correction of Accounting Errors |
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192 | (1) |
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192 | (1) |
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Earning Per Share Disclosures |
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192 | (2) |
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194 | (3) |
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Other Comprehensive Income |
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194 | (1) |
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194 | (2) |
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Accumulated Other Comprehensive Income |
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196 | (1) |
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Concept Review Exercise: Income Statement Presentation |
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197 | (1) |
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Part B The Statement of Cash Flows |
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198 | (1) |
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Usefulness of the Statement of Cash Flows |
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198 | (1) |
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199 | (6) |
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199 | (4) |
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203 | (1) |
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203 | (1) |
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Noncash Investing and Financing Activities |
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204 | (1) |
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Concept Review Exercise: Statement of Cash Flows |
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205 | (4) |
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Questions for Review of Key Topics |
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209 | (1) |
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209 | (2) |
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211 | (7) |
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CPA and CMA Review Questions |
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218 | (1) |
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219 | (6) |
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225 | (5) |
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230 | (1) |
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231 | (1) |
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Chapter 5 Income Measurement and Profitability Analysis |
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232 | (66) |
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Part A Revenue Recognition |
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234 | (4) |
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Revenue Recognition at Delivery |
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238 | (1) |
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238 | (1) |
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238 | (1) |
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Revenue Recognition after Delivery |
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239 | (4) |
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239 | (4) |
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Concept Review Exercise: Installment Sales |
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243 | (2) |
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243 | (2) |
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245 | (1) |
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Revenue Recognition Prior to Delivery |
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245 | (12) |
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A Comparison of the Completed Contract and Percentage-of-Completion Methods |
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251 | (6) |
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Concept Review Exercise: Long-Term Construction Contracts |
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257 | (1) |
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Industry-Specific Revenue Issues |
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258 | (5) |
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Software and Other Multiple-Deliverable Arrangements |
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259 | (1) |
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260 | (3) |
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Part B Profitability Analysis |
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263 | (4) |
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263 | (2) |
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265 | (2) |
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Profitability Analysis---An Illustration |
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267 | (4) |
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Appendix 5 Interim Reporting |
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271 | (2) |
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Questions for Review of Key Topics |
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273 | (1) |
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273 | (2) |
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275 | (7) |
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CPA and CMA Review Questions |
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282 | (2) |
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284 | (7) |
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291 | (6) |
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297 | (1) |
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297 | (1) |
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Chapter 6 Time Value of Money Concepts |
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298 | (38) |
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300 | (1) |
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300 | (1) |
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Simple versus Compound Interest |
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300 | (1) |
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Valuing a Single Cash Flow Amount |
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301 | (4) |
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Future Value of a Single Amount |
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301 | (1) |
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Present Value of a Single Amount |
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302 | (2) |
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Solving for Other Values When FV and PV Are Known |
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304 | (1) |
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Concept Review Exercise: Valuing a Single Cash Flow Amount |
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305 | (1) |
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Preview of Accounting Applications of Present Value Techniques---Single Cash Amount |
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306 | (2) |
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Expected Cash Flow Approach |
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308 | (1) |
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309 | (1) |
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Future Value of an Annuity |
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310 | (2) |
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Future Value of an Ordinary Annuity |
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310 | (1) |
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Future Value of an Annuity Due |
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311 | (1) |
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Present Value of an Annuity |
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312 | (4) |
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Present value of an Ordinary Annuity |
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312 | (1) |
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Present Value of an Annuity Due |
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313 | (1) |
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Present Value of a Deferred Annuity |
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314 | (2) |
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Financial Calculators and Excel |
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316 | (1) |
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Solving for Unknown Vlaues in Present Value Situations |
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316 | (3) |
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Concept Review Exercise: Annuities |
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319 | (1) |
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Preview of Accounting Applications of Present Value Techniques---Annuities |
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320 | (2) |
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Valuation of Long-Term Bonds |
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320 | (1) |
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Valuation of Long-Term Leases |
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321 | (1) |
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Valuation of Pension Obligations |
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321 | (1) |
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Summary of Time Value of Money Concepts |
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322 | (2) |
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Questions for Review of Key Topics |
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324 | (1) |
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325 | (1) |
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326 | (3) |
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CPA and CMA Review Questions |
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329 | (2) |
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331 | (3) |
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334 | (2) |
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SECTION 2 Economic Resources |
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Chapter 7 Cash and Receivables |
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336 | (58) |
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Part A Cash and Cash Equivalents |
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338 | (1) |
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338 | (2) |
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Internal Control Procedures---Cash Receipts |
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339 | (1) |
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Internal Control Procedures---Cash Disbursements |
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339 | (1) |
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Restricted Cash and Compensating Balances |
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340 | (1) |
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Decision Makers' Perspective |
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341 | (1) |
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Part B Current Receivables |
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342 | (1) |
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342 | (9) |
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Initial Valuation of Accounts Receivable |
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342 | (2) |
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Subsequent Valuation of Accounts Receivable |
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344 | (7) |
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Concept Review Exercise: Uncollectible Accounts Receivable |
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351 | (1) |
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352 | (4) |
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352 | (1) |
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353 | (2) |
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Subsequent Valuationa of Notes Receivable |
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355 | (1) |
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Financing with Receivables |
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356 | (9) |
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356 | (2) |
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358 | (3) |
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Transfers of Notes Receivable |
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361 | (1) |
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Deciding Whether to Account for a Transfer as a Sale or a Secured Borrowing |
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361 | (1) |
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362 | (3) |
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Concept Review Exercise: Financing with Receivables |
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365 | (1) |
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Decision Makers' Perspective |
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365 | (4) |
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Appendix 7A Cash Controls |
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369 | (3) |
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Appendix 7B Impairment of a Receivable Due to a Troubled Debt Restructuring |
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372 | (2) |
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Questions for Review of Key Topics |
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374 | (1) |
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375 | (1) |
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376 | (6) |
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CPA and CMA Review Questions |
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382 | (2) |
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384 | (6) |
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390 | (3) |
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393 | (1) |
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Chapter 8 Inventories: Measurement |
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394 | (52) |
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Part A Recording and Measuring Inventory |
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396 | (1) |
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396 | (1) |
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396 | (1) |
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Manufacturing Inventories |
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396 | (1) |
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Perpetual Inventory System |
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397 | (1) |
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Periodic Inventory System |
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398 | (1) |
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A Comparison of the Perpetual and Periodic Inventory Systems |
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399 | (1) |
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What is Included in Inventory? |
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400 | (4) |
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Physical Quantities Included in Inventory |
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400 | (1) |
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Expenditures Included in Inventory |
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401 | (3) |
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Inventory Cost Flow Assumptions |
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404 | (7) |
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405 | (1) |
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405 | (2) |
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First-In, First-Out (FIFO) |
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407 | (1) |
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Last-In, First-Out (LIFO) |
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408 | (2) |
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Comparison of Cost Flow Methods |
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410 | (1) |
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Decision Makers' Perspective---Factors Influencing Method Choice |
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411 | (3) |
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Concept Review Exercise: Inventory Cost Flow Methods |
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414 | (3) |
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Decision Makers' Perspective |
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417 | (3) |
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Part B Methods of Simplifying LIFO |
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420 | (1) |
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420 | (1) |
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421 | (2) |
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422 | (1) |
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422 | (1) |
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The DVL Inventory Estimation Technique |
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422 | (1) |
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Concept Review Exercise: Dollar-Value LIFO |
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423 | (2) |
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Questions for Review of Key Topics |
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425 | (1) |
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426 | (1) |
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427 | (6) |
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CPA and CMA Review Questions |
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433 | (2) |
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435 | (6) |
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441 | (4) |
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445 | (1) |
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Chapter 9 Inventories: Additional Issues |
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446 | (54) |
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Part A Reporting---Lower of Cost or Market |
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448 | (1) |
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449 | (5) |
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Applying Lower of Cost or Market |
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451 | (1) |
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452 | (2) |
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Concept Review Exercise: Lower of Cost or Market |
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454 | (1) |
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Part B Inventory Estimation Techniques |
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455 | (1) |
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456 | (2) |
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457 | (1) |
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The Retail Inventory Method |
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458 | (5) |
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459 | (1) |
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460 | (2) |
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Other Issues Pertaining to the Retail Method |
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462 | (1) |
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Concept Review Exercise: Retail Inventory Method |
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463 | (2) |
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Part C Dollar-Value LIFO Retail |
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465 | (3) |
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Concept Review Exercise: Dollar-Value LIFO Retail Method |
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468 | (1) |
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Part D Change in Inventory Method and Inventory Errors |
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469 | (1) |
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Change in Inventory Method |
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469 | (3) |
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469 | (2) |
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Change to the LIFO Method |
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471 | (1) |
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472 | (2) |
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When the Inventory Error is Discovered the Following Year |
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473 | (1) |
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When the Inventory Error is Discovered Subsequent to the Following Year |
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473 | (1) |
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Concept Review Exercise: Inventory Errors |
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474 | (1) |
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474 | (2) |
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Appendix 9 Purchase Commitments |
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476 | (2) |
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Questions for Review of Key Topics |
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478 | (1) |
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479 | (1) |
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480 | (7) |
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CPA and CMA Review Questions |
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487 | (2) |
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489 | (5) |
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494 | (3) |
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497 | (1) |
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498 | (1) |
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498 | (2) |
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Chapter 10 Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition |
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500 | (56) |
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Part A Valuation at Acquisition |
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502 | (1) |
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502 | (2) |
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504 | (8) |
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Property, Plant, and Equipment |
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504 | (5) |
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509 | (3) |
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512 | (1) |
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512 | (4) |
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513 | (2) |
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Issuance of Equity Securities |
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515 | (1) |
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515 | (1) |
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Decision Makers' Perspective |
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516 | (1) |
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Part B Disapositions and Exchanges |
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517 | (1) |
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517 | (1) |
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518 | (3) |
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Fair VAlue Not Determinable |
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519 | (1) |
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Exchange Lacks Commercial Substances |
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519 | (2) |
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Concept Review Exercise: Exchanges |
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521 | (1) |
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Part C Self-Constructed Assets and Research and Development |
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521 | (1) |
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521 | (13) |
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522 | (1) |
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522 | (4) |
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Research and Development (R&D) |
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526 | (8) |
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Appendix 10 Oil and Gas Accounting |
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534 | (1) |
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Questions for Review of Key Topics |
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535 | (1) |
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536 | (1) |
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537 | (6) |
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CPA and CMA Review Questions |
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543 | (3) |
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546 | (4) |
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550 | (4) |
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554 | (2) |
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Chapter 11 Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment |
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556 | (62) |
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Part A Depreciation, Depletion, and Amortization |
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558 | (1) |
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Cost Allocation---An Overview |
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558 | (1) |
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Measuring Cost Allocation |
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559 | (1) |
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559 | (1) |
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559 | (1) |
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560 | (1) |
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560 | (3) |
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Time-Based Depreciation Methods |
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560 | (2) |
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Activity-Based Depreciation Methods |
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562 | (1) |
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Decision Makers Perspective---Selecting a Depreciation Method |
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563 | (2) |
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Concept Review exercise: Depreciation Methods |
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565 | (1) |
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Group and Composite Depreciation Methods |
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566 | (3) |
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Depletion of Natural Resources |
|
|
569 | (2) |
|
Amorization of Intangible Assets |
|
|
571 | (2) |
|
Intangible Assets Subject to Amorization |
|
|
571 | (1) |
|
Intangible Assets Not Subject to Amoritization |
|
|
572 | (1) |
|
Concept Review Exercise: Depletion and Amoritization |
|
|
573 | (2) |
|
|
|
575 | (1) |
|
|
|
575 | (1) |
|
|
|
576 | (1) |
|
Changes in Depreciation, Amortization, or Depletion Method |
|
|
577 | (1) |
|
|
|
578 | (2) |
|
|
|
580 | (7) |
|
Assets to Be Held and Used |
|
|
580 | (7) |
|
|
|
587 | (2) |
|
Impairment Losses and Earnings Quality |
|
|
588 | (1) |
|
Part C Subsequent Expenditures |
|
|
589 | (5) |
|
Expenditures Subsequents to Acquisition |
|
|
589 | (1) |
|
|
|
589 | (1) |
|
|
|
590 | (1) |
|
|
|
590 | (1) |
|
|
|
590 | (1) |
|
Costs of Defending Intangible Rights |
|
|
591 | (3) |
|
Appendix 11A Comparison with MACRS (Tax Depreciation) |
|
|
594 | (1) |
|
Appendix 11B Retirement and Replacement Methods of Depreciation |
|
|
594 | (2) |
|
Questions for Review of Key Topics |
|
|
596 | (1) |
|
|
|
596 | (2) |
|
|
|
598 | (7) |
|
CPA and CMA Review Questions |
|
|
605 | (2) |
|
|
|
607 | (5) |
|
|
|
612 | (4) |
|
|
|
616 | (1) |
|
|
|
617 | (1) |
|
SECTION 3 Financial Instruments and Liabilities |
|
|
|
|
|
618 | |
|
Part A Investor Lacks Significant Influence |
|
|
620 | (2) |
|
Securities to be Held to Maturity |
|
|
622 | (3) |
|
|
|
625 | (4) |
|
Securities Available-for-Sale |
|
|
629 | (8) |
|
Comparison of HTM, TS, and AFS Approaches |
|
|
635 | (2) |
|
Transfers between Reporting Categories |
|
|
637 | (2) |
|
|
|
637 | (2) |
|
Impairment of Investments |
|
|
639 | (1) |
|
Concept Review Exercise: Various Investment Securities |
|
|
640 | (2) |
|
Financial Statement Presentation and Disclosure |
|
|
642 | (2) |
|
Part B Investor Has Significant Influence |
|
|
644 | (1) |
|
How the Equity Method Relates to Consolidated Financial Statements |
|
|
644 | (1) |
|
What is Significant Influence? |
|
|
645 | (1) |
|
|
|
645 | (2) |
|
|
|
647 | (2) |
|
|
|
649 | (2) |
|
What if Conditions Change? |
|
|
651 | (3) |
|
If an Equity Method Investment is Sold |
|
|
652 | (1) |
|
Comparison of Fair Value and Equity Methods |
|
|
652 | (1) |
|
|
|
653 | (1) |
|
Concept Review Exercise: the Equity Method |
|
|
654 | (2) |
|
Decision Makers' Perspective |
|
|
656 | (1) |
|
Financial Instrument and Investment Derivatives |
|
|
657 | (2) |
|
Appendix 12A Other Investment (Special Purpose Funds, Investments in Life Insurance Policies) |
|
|
659 | (1) |
|
Appendix 12B Impairment of Investments |
|
|
660 | (6) |
|
Questions for Review of Key Topics |
|
|
666 | (2) |
|
|
|
668 | (1) |
|
|
|
669 | (7) |
|
CPA and CMA Review Questions |
|
|
676 | (2) |
|
|
|
678 | (7) |
|
|
|
685 | (3) |
|
|
|
688 | (1) |
|
|
|
689 | |
| Appendix A Derivatives |
|
| Appendix B Dell Annual Report |
|
1 | (1) |
| Appendix C IFRS Comprehensive Case |
|
| Glossary |
|
| Photo Credits |
|
1 | (1) |
| Index |
|
| Present and Future Value Tables |
|
1 | |
