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Pearson Financial Accounting 2014 Edition by Jr. Walter T. Harrison, Charles T. Horngren, C. William Thomas
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Check with the seller prior to purchase.Financial Accounting helps students "nail" the accounting cycle!Financial Accounting features the 'accounting cycle' up front in the text in order to increase success and retention later on. The concepts and mechanics students learn in the critical 'accounting cycle' chapters are used consistently and repetitively-and with clear-cut details and explanations-throughout the remainder of the text, thus minimizing confusion. MyAccountingLab for Financial Accounting is an online homework, tutorial, and assessment program that truly engages students in learning. It helps students better prepare for class, quizzes, and exams-resulting in better performance in the course-and provides educators with a dynamic set of tools for gauging individual and class progress.?Teaching and Learning Experience?This program presents a better teaching and learning experience. Financial Accounting, Tenth Edition will: Personalize learning with MyAccountingLab: MyAccountingLab provides instructors with a rich and flexible set of course materials, along with course-management tools that make it easy to deliver all or a portion of your course online. Use consistency, repetition, and a high level of detail when teaching core accounting concepts. Teach with a better coverage of the accounting cycle from start to finish. The text covers a wide range of topics that prepares students for their field.? Reinforce learning by using exercises: End-of-chapter, analytical, and Challenge Problems allows students to review the material and gain a better grasp of the text. Note: You are purchasing a standalone product; MyAccountingLab does not come packaged with this content. If you would like to purchase both the physical text and MyAccountingLab search for ISBN-10: 0133768775/ISBN-13: 9780133768770. That package includes ISBN-10: 0133427536/ISBN-13: 9780133427530 and ISBN-10: 0133437280/ISBN-13: 9780133437287.MyAccountingLab is not a self-paced technology and should only be purchased when required by an instructor. Table of contents :- Chapter 1 The Financial Statements 1Spotlight: The Gap, Inc. 1Explain Why Accounting Is the Language of Business 3Who Uses Accounting Information? 4Two Kinds of Accounting: Financial Accounting and Management Accounting 4Organizing a Business 5Explain and Apply Underlying Accounting Concepts, Assumptions, and Principles 6The Entity Assumption 8The Continuity (Going-Concern) Assumption 8The Historical Cost Principle 8The Stable-Monetary-Unit Assumption 9Apply the Accounting Equation to Business Organizations 11Assets and Liabilities 11Owners' Equity 12Evaluate Business Operations Through the Financial Statements 14The Income Statement Measures Operating Performance 14The Statement of Retained Earnings Shows What a Company Did with Its Net Income 16The Balance Sheet Measures Financial Position 17The Statement of Cash Flows Measures Cash Receipts and Payments 20Construct Financial Statements and Analyze the Relationships Among Them 21Evaluate Business Decisions Ethically 23End-of-Chapter Summary Problem 26 Chapter 2 Transaction Analysis 53Spotlight: Whole Foods Market, Inc. 53Explain What a Transaction Is 55Define "Account," and List and Differentiate Between Different Types of Accounts 55Assets 55Liabilities 56Stockholders' (Owners') Equity 56Show the Impact of Business Transactions on the Accounting Equation 57Example: Freddy's Auto Service, Inc. 57Transactions and Financial Statements 63Mid-Chapter Summary Problem 66Analyze the Impact of Business Transactions on Accounts 68The T-Account 68Increases and Decreases in the Accounts: The Rules of Debit and Credit 68Additional Stockholders' Equity Accounts: Revenues and Expenses 70Record (Journalize and Post) Transactions in the Books 71Copying Information (Posting) from the Journal to the Ledger 72The Flow of Accounting Data 73Accounts after Posting to the Ledger 77Construct and Use a Trial Balance 78Analyzing Accounts 79Correcting Accounting Errors 80Chart of Accounts 80The Normal Balance of an Account 81Account Formats 81Analyzing Transactions Using Only T-Accounts 82End-of-Chapter Summary Problem 84Chapter 3 Accrual Accounting & Income 113Spotlight: Starbucks Corporation 113Explain How Accrual AccountingDiffers from Cash-BasisAccounting 115Accrual Accounting and Cash Flows 116The Time-Period Concept 116Apply the Revenue and Expense Recognition Principles 116The Revenue Principle 116The Expense Recognition Principle 118Ethical Issues in Accrual Accounting 119Adjust the Accounts 119Which Accounts Need to Be Updated (Adjusted)? 119Categories of Adjusting Entries 120Prepaid Expenses 120Depreciation of Plant Assets 123Accrued Expenses 125Accrued Revenues 127Unearned Revenues 128Summary of the Adjusting Process 129The Adjusted Trial Balance 132Construct the Financial Statements 133Mid-Chapter Summary Problem 135Close the Books 141Classifying Assets and Liabilities Based on Their Liquidity 142Reporting Assets and Liabilities: Starbucks Corporation 143Formats for the Financial Statements 143Analyze and Evaluate a Company's Debt-Paying Ability 145Net Working Capital 145Current Ratio 145Debt Ratio 146How Do Transactions Affect the Ratios? 146End-of-Chapter Summary Problem 150Chapter 4 Internal Control & Cash 192Spotlight: Cooking the Books: Mid-Atlantic Manufacturing Company Takes a Hit 192Describe Fraud and Its Impact 195Fraud and Ethics 197Explain the Objectives and Components of Internal Control 197The Sarbanes-Oxley Act (SOX) 198The Components of Internal Control 199Internal Control Procedures 200Information Technology 202Safeguard Controls 203Internal Controls for E-Commerce 203Security Measures 203The Limitations of Internal Control-Costs and Benefits 204Design and Use a Bank Reconciliation 204Signature Card 205Deposit Ticket 205Check 205Bank Statement 206Bank Reconciliation 207Preparing the Bank Reconciliation 208Online Banking 211Mid-Chapter Summary Problem 213Evaluate Internal Controls Over Cash Receipts and Cash Payments 215Cash Receipts Over the Counter 215Cash Receipts by Mail 215Controls Over Payment by Check 216Construct and Use a Cash Budget 218Report Cash on the Balance Sheet 220Compensating Balance Agreements 220End-of-Chapter Summary Problem 221Chapter 5 Short-Term Investments & Receivables 245Spotlight: Amazing Apple! Short-term investments and accounts receivable are 37 times as large as inventories! 245Account for Short-Term Investments 247Reasons to Invest in Other Companies 247Trading Securities 248Reporting on the Balance Sheet and the Income Statement 252Ethics and the Current Ratio 252Mid-Chapter Summary Problem 253Apply GAAP for Proper Revenue Recognition 254Shipping Terms, Sales Discounts, and Sales Returns 255Account for and Control Accounts Receivable 256Types of Receivables 256Internal Controls Over Cash Collections on Account 257How Do We Manage the Risk of Not Collecting? 257Evaluate Collectibility Using the Allowance for Uncollectible Accounts 258Allowance Method 259Direct Write-Off Method 265Computing Cash Collections from Customers 265Account for Notes Receivable 266Accounting for Notes Receivable 267Show How to Speed Up Cash Flow from Receivables 269Credit Card or Bankcard Sales 269Selling (Factoring) Receivables 270Reporting on the Statement of Cash Flows 270Evaluate Liquidity Using Two New Ratios 271Quick (Acid-Test) Ratio 271Days' Sales in Receivables 271End-of-Chapter Summary Problem 273Chapter 6 Inventory & Cost of Goods Sold 300Spotlight: Family Dollar Stores, Inc. 300Show How to Account for Inventory 303Sale Price vs. Cost of Inventory 304Accounting for Inventory in the Perpetual System 306Apply and Compare Various Inventory Cost Methods 308What Goes into Inventory Cost? 308Apply the Various Inventory Costing Methods 309Compare the Effects of FIFO, LIFO, and Average Cost on Cost of Goods Sold, Gross Profit, and Ending Inventory 311Keeping Track of Perpetual Inventories under LIFO and Weighted-Average Cost Methods 312The Tax Advantage of LIFO 313Mid-Chapter Summary Problem 314Explain and Apply Underlying GAAP for Inventory 316Disclosure Principle 316Lower-of-Cost-or-Market Rule 316Inventory and the Detailed Income Statement 318Compute and Evaluate Gross Profit (Margin) Percentage and Inventory Turnover 318Gross Profit Percentage 318Inventory Turnover 319Use the COGS Model to Make Management Decisions 320Computing Budgeted Purchases 321Estimating Inventory by the Gross Profit Method 321Analyze Effects of Inventory Errors 322End-of-Chapter Summary Problem 325Chapter 7 Plant Assets, Natural Resources, & Intangibles 362Spotlight: FedEx Corporation 362Measure and Account for the Cost of Plant Assets 365Land 365Buildings, Machinery, and Equipment 365Land Improvements and Leasehold Improvements 366Lump-Sum (or Basket) Purchases of Assets 366Distinguish a Capital Expenditure from an Immediate Expense 367Measure and Record Depreciation on Plant Assets 369How to Measure Depreciation 370Depreciation Methods 370Comparing Depreciation Methods 375Mid-Chapter Summary Problem 377Other Issues in Accounting for Plant Assets 378Depreciation for Tax Purposes 378Depreciation for Partial Years 380Changing the Useful Life of a Depreciable Asset 380Fully Depreciated Assets 382Analyze the Effect of a Plant Asset Disposal 382Disposing of a Fully Depreciated Asset for No Proceeds 383Selling a Plant Asset 383Exchanging a Plant Asset 384T-Accounts for Analyzing Plant Asset Transactions 385Apply GAAP for Natural Resources and Intangible Assets 387Accounting for Natural Resources 387Accounting for Intangible Assets 388Accounting for Specific Intangibles 388Accounting for Research and Development Costs 390Explain the Effect of an Asset Impairment on the Financial Statements 390Analyze Rate of Return on Assets 392DuPont Analysis: A More Detailed View of ROA 393Analyze the Cash Flow Impact of Long-Lived Asset Transactions 394End-of-Chapter Summary Problem 397Chapter 8 Long-Term Investments & the Time Value of Money 428Spotlight: Intel Holds Several Different Types of Investments 428Stock and Bond Prices 430Reporting Investments on the Balance Sheet 430Analyze and Report Investments in Held-to-Maturity Debt Securities 431Analyze and Report Investments in Available-for-Sale Securities 433Accounting Methods for Long-Term Stock Investments 433The Fair Value Adjustment 435Selling an Available-for-Sale Investment 436Analyze and Report Investments in Affiliated Companies Using the Equity Method 437Buying a Large Stake in Another Company 437Accounting for Equity-Method Investments 438Analyze and Report Controlling Interests in Other Corporations Using Consolidated Financial Statements 440Why Buy Controlling Interest in Another Company? 440Consolidation Accounting 440The Consolidated Balance Sheet and the Related Work Sheet 441Goodwill and Noncontrolling Interest 442Income of a Consolidated Entity 442Mid-Chapter Summary Problem 444Consolidation of Foreign Subsidiaries 446Foreign Currencies and Exchange Rates 446The Foreign-Currency Translation Adjustment 447Report Investing Activities on the Statement of Cash Flows 448Explain the Impact of the Time Value of Money on Certain Types of Investments 449Present Value 450Present-Value Tables 451Present Value of an Ordinary Annuity 452Using Microsoft Excel to Calculate Present Value 454Using the PV Model to Compute Fair Value of Available-for-Sale Investments 455Present Value of an Investment in Bonds 456End-of-Chapter Summary Problems 457Chapter 9 Liabilities 482Spotlight: Southwest Airlines: Still Flying High! 482Account for Current and Contingent Liabilities 484Current Liabilities of Known Amount 484Current Liabilities That Must Be Estimated 490Contingent Liabilities 491Are All Liabilities Reported on the Balance Sheet? 492Summary of Current Liabilities 493Mid-Chapter Summary Problem 493Account for Bonds Payable, Notes Payable, and Interest Expense 494Bonds: An Introduction 494Issuing Bonds Payable at Par (Face Value) 497Issuing Bonds Payable at a Discount 499What Is the Interest Expense on These Bonds Payable? 499Interest Expense on Bonds Issued at a Discount 501Partial-Period Interest Amounts 504Issuing Bonds Payable at a Premium 504The Straight-Line Amortization Method: A Quick and Dirty Way to Measure Interest Expense 508Should We Retire Bonds Payable Before Their Maturity? 509Convertible Bonds and Notes 509Analyze and Differentiate Financing with Debt Versus Equity 510The Leverage Ratio 512The Times-Interest-Earned Ratio 513Understand Other Long-Term Liabilities 513Leases 513Types of Leases 513Do Lessees Prefer Operating Leases or Capital Leases? 514Pensions and Postretirement Liabilities 515Report Liabilities 516Reporting on the Balance Sheet 516Disclosing the Fair Value of Long-Term Debt 517Reporting Financing Activities on the Statement of Cash Flows 517End-of-Chapter Summary Problems 518Chapter 10 Stockholders' Equity 550Spotlight: The Home Depot: Building Toward Success 550Explain the Features of a Corporation 552Organizing a Corporation 553Stockholders' Rights 554Stockholders' Equity 555Classes of Stock 555Account for the Issuance of Stock 557Common Stock 557A Stock Issuance for Other Than Cash Can Create an Ethical Challenge 560Preferred Stock 561Mid-Chapter Summary Problem 562Authorized, Issued, and Outstanding Stock 564Show how Treasury Stock Affects a Company 564How Is Treasury Stock Recorded? 564Retirement of Treasury Stock 566Resale of Treasury Stock 566Issuing Stock for Employee Compensation 566Summary of Treasury-Stock Transactions 567Account for Retained Earnings, Dividends, and Splits 567Should the Company Declare and Pay Cash Dividends? 568Cash Dividends 568Analyzing the Stockholder's Equity Accounts 569Dividends on Preferred Stock 570Stock Dividends 571Stock Splits 572Summary of the Effects on Assets, Liabilities, and Stockholders' Equity 573Use Stock Values in Decision Making 573Market, Redemption, Liquidation, and Book Value 573ROE: Relating Profitability to Stockholder Investment 575Report Stockholders' Equity Transactions in the Financial Statements 577Statement of Cash Flows 577Statement of Stockholders' Equity 578A Detailed Stockholders' Equity Section of the Balance Sheet 579End-of-Chapter Summary Problems 581Chapter 11 Evaluating Performance: Earnings Quality, the Income Statement, & the Statement of Comprehensive Income 617Spotlight: The Gap, Inc.: What a Difference a Year Makes! 617Evaluate Quality of Earnings 619Revenue Recognition 620Cost of Goods Sold and Gross Profit (Gross Margin) 621Operating and Other Expenses 622Operating Income (Earnings) 622Account for Foreign-Currency Gains and Losses 623Dollars versus Foreign Currency 623Reporting Foreign-Currency Gains and Losses on the Income Statement 624Reporting Foreign-Currency Exchange Gains and Losses on Cash and Cash Equivalents in the Statement of Cash Flows 624Should We Hedge Our Foreign-Currency- Transaction Risk? 625Account for Other Items on the Income Statement 625Interest Expense and Interest Income 625Corporate Income Taxes 625Which Income Number Predicts Future Profits? 627Discontinued Operations 628Accounting Changes 629Compute Earnings per Share 630Analyze the Statement of Comprehensive Income, Footnotes, and Supplemental Disclosures 631Reporting Comprehensive Income 631For Additional Details, Don't Forget the Footnotes 632Nonfinancial Reports 634Differentiate Management's and Auditors' Responsibilities in Financial Reporting 634Management's Responsibility 634Auditor Report 634End-of-Chapter Summary Problems 637Chapter 12 The Statement of Cash Flows 664Spotlight: Google: The Ultimate Answer (and Cash) Machine 664Identify the Purposes of the Statement of Cash Flows 666How's Your Cash Flow? Telltale Signs of Financial Difficulty 667Distinguish Among Operating, Investing, and Financing Activities 668Two Formats for Operating Activities 669Prepare a Statement of Cash Flows by the Indirect Method 669Cash Flows from Operating Activities 671Cash Flows from Investing Activities 675Cash Flows from Financing Activities 676Noncash Investing and Financing Activities 680Mid-Chapter Summary Problem 681Prepare a Statement of Cash Flows by the Direct Method 684Cash Flows from Operating Activities 685Depreciation, Depletion, and Amortization Expense 687Cash Flows from Investing Activities 687Cash Flows from Financing Activities 688Noncash Investing and Financing Activities 688Computing Operating Cash Flows by the Direct Method 689Computing Investing and Financing Cash Flows 693Measuring Cash Adequacy: Free Cash Flow 694End-of-Chapter Summary Problems 696Chapter 13 Financial Statement Analysis 739Spotlight: How Well Is Amazon.com Doing? 739It Starts with the Big Picture 741Perform Horizontal Analysis 743Illustration: Amazon.com, Inc. 743Trend Percentages 748Perform Vertical Analysis 749Illustration: Amazon.com, Inc. 749Prepare Common-Size Financial Statements 752Benchmarking 753Benchmarking Against a Key Competitor 753Analyze the Statement of Cash Flows 753Mid-Chapter Summary Problem 756Use Ratios to Make Business Decisions 757Remember to Start at the Beginning: Company and Industry Information 758Now Let's Do the Numbers 759Measuring Ability to Pay Current Liabilities 759Measuring Turnover and the Cash Conversion Cycle 762Measuring Leverage: Overall Ability to Pay Debts 765Measuring Profitability 766Analyzing Stock as an Investment 771The Limitations of Ratio Analysis 773Use Other Measures to Make Investment Decisions 773Economic Value Added (EVA (R)) 773Red Flags in Financial Statement Analysis 774Efficient Markets 775End-of-Chapter Summary Problems 778Appendix A: Amazon.com 2012 Annual Report 821Appendix B: Yum! Brands, Inc. Annual Report 2012 845Appendix C: Typical Charts of Accounts for Different Types of Businesses 863Appendix D: Summary of Generally Accepted Accounting Principles (GAAP) 865Appendix E: Summary of Differences Between U.S. GAAP and IFRS Cross Referenced to Chapter 867Company Index 871Glindex 875show more