Financial Accounting

Inhaltsverzeichnis

• Cover

  1

  -

  3
• Title Page

  3

  -

  4
• Copyright Page

  4

  -

  7
• About the Authors

  7

  -

  11
• Brief Contents

  11

  -

  13
• Contents

  13

  -

  20
• Preface

  20

  -

  23
• Visual Walk-Through

  23

  -

  27
• Acknowledgments

  27

  -

  35
• +

  Chapter 1: Conceptual Framework and Financial Statements

  35

  -

  92

  ---

  • Spotlight: Alibaba Group

    35

    -

    37
  • +

    Understand the Role of Accounting in Communicating Financial Information

    37

    -

    42

    ---

    • Business Decisions

      37

      -

      37
    • Accounting Is the Language of Business

      37

      -

      38
    • Two Perspectives of Accounting: Financial Accounting and Management Accounting

      38

      -

      38
    • Organizing a Business

      38

      -

      40
    • Role of Accounting Standards

      40

      -

      42
  • +

    Understand the Underlying Accounting Concepts in the IFRS Conceptual Framework

    42

    -

    48

    ---

    • The Conceptual Framework

      42

      -

      42
    • Why Is Financial Reporting Important?

      42

      -

      43
    • Who Are the Users of Financial Reports?

      43

      -

      43
    • What Makes Financial Information Useful?

      43

      -

      45
    • What Constraints Do We Face in Providing Useful Information?

      45

      -

      45
    • What Are Our Assumptions in Financial Reporting?

      45

      -

      45
    • What Exactly Are We Accounting For?

      45

      -

      46
    • Accounting Equations

      46

      -

      48
  • +

    Obtain Insights into Business Operations through Financial Statements

    48

    -

    56

    ---

    • The Income Statement Shows a Company’s Financial Performance

      49

      -

      51
    • The Statement of Changes in Equity Shows a Company’s Transactions with its Owners

      51

      -

      52
    • The Balance Sheet Shows a Company’s Financial Position

      52

      -

      55
    • The Statement of Cash Flows Shows a Company’s Cash Receipts and Payments

      55

      -

      56
  • Identify Financial Statements and their Inter-Relationships

    56

    -

    58
  • +

    Understand the Role of Ethics in Accounting

    58

    -

    61

    ---

    • Code of Ethics for Professional Accountants

      60

      -

      61
  • End-of-Chapter Summary Problem

    61

    -

    92
• +

  Chapter 2: Recording Business Transactions

  92

  -

  163

  ---

  • Spotlight: Daimler AG

    92

    -

    94
  • Explain what a Business Transaction is

    94

    -

    94
  • +

    Keep Track of Financial Statement Items

    94

    -

    97

    ---

    • Assets

      95

      -

      96
    • Liabilities

      96

      -

      96
    • Equity

      96

      -

      97
  • +

    Analyze the Impact of Business Transactions on Accounts

    97

    -

    110

    ---

    • Example: RedLotus Travel, Inc.

      97

      -

      102
    • Transactions and Financial Statements

      102

      -

      105
    • Mid-Chapter Summary Problem

      105

      -

      106
    • Double-Entry Accounting

      106

      -

      107
    • The T-Account

      107

      -

      107
    • Increases and Decreases in the Accounts: The Rules of Debit and Credit

      107

      -

      108
    • Additional Shareholders’ Equity Accounts: Income and Expenses

      108

      -

      110
  • +

    Record (Journalize and Post) Transactions in the Books

    110

    -

    117

    ---

    • Copying Information (Posting) from the Journal to the Ledger

      110

      -

      111
    • The Flow of Accounting Data

      111

      -

      116
    • Accounts after Posting to the Ledger

      116

      -

      117
  • +

    Construct and Use a Trial Balance

    117

    -

    123

    ---

    • Analyzing Accounts

      117

      -

      118
    • Correcting Accounting Errors

      118

      -

      119
    • Chart of Accounts

      119

      -

      120
    • The Normal Balance of an Account

      120

      -

      120
    • Account Formats

      120

      -

      121
    • Analyzing Transactions Using Only T-Accounts

      121

      -

      123
    • End-of-Chapter Summary Problem

      123

      -

      163
• +

  Chapter 3: Accrual Accounting

  163

  -

  241

  ---

  • Spotlight: Richemont

    163

    -

    166
  • +

    Explain how Accrual Accounting Differs from Cash-Basis Accounting

    166

    -

    168

    ---

    • Accrual Accounting and Cash Flows

      167

      -

      167
    • The Time-Period Concept

      167

      -

      168
  • +

    Apply the Revenue and Expense Recognition Principles

    168

    -

    175

    ---

    • The Revenue Recognition Principle

      168

      -

      170
    • The Expense Recognition Principle

      170

      -

      170
    • The Matching Concept

      170

      -

      171
    • Ethics in Business and Accounting Decisions

      171

      -

      172
    • Mid-Chapter Summary Problem

      172

      -

      175
  • +

    Adjust the Accounts

    175

    -

    188

    ---

    • Which Accounts Need to Be Updated (Adjusted)?

      175

      -

      176
    • Categories of Adjusting Entries

      176

      -

      177
    • Prepaid Expenses

      177

      -

      179
    • Unearned Revenues

      179

      -

      181
    • Accrued Expenses

      181

      -

      182
    • Accrued Revenues

      182

      -

      183
    • Depreciation of Property, Plant and Equipment

      183

      -

      186
    • Summary of the Adjusting Process

      186

      -

      188
    • The Adjusted Trial Balance

      188

      -

      188
  • Prepare Updated Financial Statements

    188

    -

    190
  • +

    Close the Books

    190

    -

    192

    ---

    • End-of-Chapter Summary Problem

      192

      -

      241
• +

  Chapter 4: Presentation of Financial Statements

  241

  -

  287

  ---

  • Spotlight: BASF

    241

    -

    243
  • +

    Appreciate the Role of Annual Reports as a Communication Tool

    243

    -

    253

    ---

    • Substance Over Style

      243

      -

      244
    • Obtaining Annual Reports

      244

      -

      246
    • Typical Structure of an Annual Report

      246

      -

      247
    • Corporate Information

      247

      -

      248
    • Analysis and Commentaries

      248

      -

      249
    • Other Statements and Disclosures

      249

      -

      250
    • Financial Statements

      250

      -

      253
  • +

    Know the General Presentation Requirements of Financial Statements

    253

    -

    260

    ---

    • Complete Set of Financial Statements

      253

      -

      254
    • Fair Presentation and Compliance with IFRS

      254

      -

      254
    • Going Concern

      254

      -

      254
    • Accrual Basis of Accounting

      254

      -

      254
    • Materiality and Aggregation

      254

      -

      256
    • Offsetting

      256

      -

      256
    • Frequency of Reporting

      256

      -

      257
    • Comparative Information

      257

      -

      257
    • Consistency of Presentation

      257

      -

      257
    • Notes to the Accounts

      257

      -

      259
    • Mid-Chapter Summary Problem

      259

      -

      260
  • Understand the Presentation Requirements for Statement of Financial Position

    260

    -

    262
  • Understand Presentation Requirements for Statement of Comprehensive Income

    262

    -

    266
  • Understand Presentation Requirements for Statement of Changes in Equity

    266

    -

    268
  • +

    Evaluate a Company’s Short-Term Liquidity

    268

    -

    269

    ---

    • Current Ratio

      268

      -

      269
    • End-of-Chapter Summary Problem

      269

      -

      287
• +

  Chapter 5: Internal Control, Cash, and Receivables

  287

  -

  362

  ---

  • Spotlight: LEGO

    287

    -

    289
  • +

    Understand the Role of Internal Controls and Corporate Governance

    289

    -

    300

    ---

    • Fraud and Its Impact

      289

      -

      293
    • Ethics in Business and Accounting Decisions

      293

      -

      293
    • Internal Control

      293

      -

      294
    • The Sarbanes-Oxley Act (SOX)

      294

      -

      296
    • Internal Control Procedures

      296

      -

      299
    • The Limitations of Internal Control—Costs and Benefits

      299

      -

      300
  • +

    Apply Internal Controls over Cash Receipts and Cash Payments

    300

    -

    303

    ---

    • Internal Control Over Cash Receipts

      300

      -

      301
    • Internal Control Over Cash Payments

      301

      -

      303
  • +

    Prepare and Use a Bank Reconciliation

    303

    -

    314

    ---

    • Preparing the Bank Reconciliation

      307

      -

      309
    • Online Banking

      309

      -

      311
    • Using a Budget to Manage Cash

      311

      -

      312
    • Reporting Cash on the Balance Sheet

      312

      -

      312
    • Mid-Chapter Summary Problem

      312

      -

      314
  • +

    Account for Receivables and its Potential Impairment

    314

    -

    328

    ---

    • Types of Receivables

      314

      -

      315
    • Internal Controls over Cash Collections on Account

      315

      -

      316
    • How Do We Manage the Risk of Not Collecting?

      316

      -

      317
    • Accounting for Uncollectible Receivables

      317

      -

      317
    • Allowance Method

      317

      -

      322
    • Direct Write-Off Method

      322

      -

      323
    • Computing Cash Collections from Customers

      323

      -

      324
    • Accounting for Notes Receivable

      324

      -

      326
    • How to Speed Up Cash Flow

      326

      -

      328
  • +

    Evaluate a Company’s Ability to Collect Receivables

    328

    -

    329

    ---

    • End-of-Chapter Summary Problem

      329

      -

      362
• +

  Chapter 6: Inventory and Merchandising Operations

  362

  -

  423

  ---

  • Spotlight: Fast Retailing

    362

    -

    364
  • +

    Understand the Nature of Inventory and Retailing Operations

    364

    -

    368

    ---

    • Sale Price vs. Cost of Inventory

      366

      -

      367
    • Basic Inventory Relationship

      367

      -

      368
  • +

    Record Inventory-Related Transactions

    368

    -

    371

    ---

    • Inventory Systems

      368

      -

      369
    • Recording Transactions in the Perpetual System

      369

      -

      371
  • +

    Understand and Apply Different Inventory Cost Assumptions

    371

    -

    381

    ---

    • Effects of FIFO, LIFO, and Average Cost on Cost of Goods Sold, Gross Profit, and Ending Inventory

      375

      -

      376
    • Comparison of the Inventory Methods

      376

      -

      377
    • Mid-Chapter Summary Problem

      377

      -

      379
    • Other Inventory Issues

      379

      -

      381
  • Analyze Effects of Inventory Errors

    381

    -

    383
  • +

    Evaluate a Company’s Retailing Operations

    383

    -

    387

    ---

    • Analyzing Financial Statements

      386

      -

      387
    • End-of-Chapter Summary Problem

      387

      -

      423
• +

  Chapter 7: PPE and Intangibles

  423

  -

  483

  ---

  • Spotlight: Airbus Group

    423

    -

    425
  • +

    Understand the Different Types of Long-Term Assets

    425

    -

    427

    ---

    • Property, Plant and Equipment (PPE)

      425

      -

      426
    • Intangible Assets

      426

      -

      426
    • Other Non-Current Assets

      426

      -

      427
  • +

    Determine the Cost of PPE on Initial Recognition

    427

    -

    431

    ---

    • Recognition of PPE and Intangible Assets

      427

      -

      427
    • Measurement of PPE on Initial Recognition

      427

      -

      428
    • Land and Land Improvements

      428

      -

      429
    • Buildings, Machinery, and Equipment

      429

      -

      430
    • Lump-Sum (or Basket) Purchases of Assets

      430

      -

      431
  • +

    Understand when to Capitalize or Expense Subsequent Costs

    431

    -

    433

    ---

    • Subsequent Costs

      431

      -

      433
  • +

    Measure and Record Depreciation

    433

    -

    448

    ---

    • How to Allocate Depreciation

      434

      -

      435
    • Depreciation Methods

      435

      -

      439
    • Comparing Depreciation Methods

      439

      -

      440
    • Choosing a Depreciation Method

      440

      -

      441
    • Mid-Chapter Summary Problem

      441

      -

      442
    • Other Issues in Accounting for PPE

      442

      -

      442
    • Depreciation for Tax Purposes

      442

      -

      444
    • Depreciation for Partial Years

      444

      -

      444
    • Changes in Estimates of Useful Lives or Residual Values

      444

      -

      446
    • Impairment of PPE

      446

      -

      447
    • Measurement Subsequent to Initial Recognition

      447

      -

      448
    • Using Fully Depreciated Assets

      448

      -

      448
  • +

    Account for PPE Disposals

    448

    -

    452

    ---

    • T-Accounts for Analyzing PPE Transactions

      451

      -

      451
    • Accounting for Natural Resources

      451

      -

      452
  • +

    Understand the Recognition and Subsequent Measurement of Intangible Assets

    452

    -

    457

    ---

    • Accounting for Specific Intangibles

      453

      -

      455
    • Accounting for Research and Development Costs

      455

      -

      456
    • Accounting for the Impairment of an Intangible Asset

      456

      -

      456
    • Reporting Long-Term Assets Transactions on the Statement of Cash Flows

      456

      -

      457
  • +

    Evaluate a Company’s Performance Based on its Assets

    457

    -

    459

    ---

    • End-of-Chapter Summary Problem

      459

      -

      483
• +

  Chapter 8: Investments and International Operations

  483

  -

  537

  ---

  • +

    Spotlight: Vivendi

    483

    -

    487

    ---

    • Investments: An Overview

      485

      -

      487
  • +

    Understand Categories of Financial Asset Investments

    487

    -

    497

    ---

    • Trading Securities

      489

      -

      492
    • Held-to-maturity

      492

      -

      494
    • Available-for-Sale Investments

      494

      -

      497
    • Summary of Financial Assets Recognition and Measurements

      497

      -

      497
    • Mid-Chapter Summary Problem

      497

      -

      497
  • Use the Equity Method for Investments

    497

    -

    500
  • +

    Understand the Concept of Consolidated Financial Statements

    500

    -

    507

    ---

    • Consolidation Accounting

      500

      -

      501
    • The Consolidated Balance Sheet and the Related Worksheet

      501

      -

      503
    • Goodwill and Non-Controlling Interest

      503

      -

      504
    • Income of a Consolidated Entity

      504

      -

      507
  • +

    Account for International Operations and Transactions

    507

    -

    512

    ---

    • Foreign Currencies and Exchange Rates

      507

      -

      508
    • Accounting for Foreign Currency Transactions

      508

      -

      510
    • Reporting Gains and Losses on the Income Statement

      510

      -

      510
    • Should We Hedge Our Foreign-Currency Transaction Risk?

      510

      -

      510
    • Consolidation of Foreign Subsidiaries

      510

      -

      512
    • Impact of Investing Activities on the Statement of Cash Flows

      512

      -

      512
  • +

    Evaluate a Company’s Overall Performance

    512

    -

    514

    ---

    • End-of-Chapter Summary Problem

      514

      -

      537
• +

  Chapter 9: Liabilities

  537

  -

  602

  ---

  • Spotlight: Jardine Matheson Holdings Ltd.

    537

    -

    539
  • Understand the Various Types of Liabilities

    539

    -

    546
  • +

    Account for Contingent Liabilities

    546

    -

    548

    ---

    • Are All Liabilities Reported on the Balance Sheet?

      547

      -

      548
  • +

    Summary of Current Liabilities

    548

    -

    549

    ---

    • Mid-Chapter Summary Problem

      549

      -

      549
  • +

    Account for Bonds

    549

    -

    564

    ---

    • Bonds: An Introduction

      550

      -

      553
    • Issuing Bonds Payable at Par (Face Value)

      553

      -

      554
    • Issuing Bonds Payable at a Discount

      554

      -

      555
    • What Is the Interest Expense on These Bonds Payable?

      555

      -

      556
    • Interest Expense on Bonds Issued at a Discount

      556

      -

      559
    • Issuing Bonds Payable at a Premium

      559

      -

      562
    • Partial-Period Interest Amounts

      562

      -

      563
    • The Straight-line Amortization Method: A Quick Way to Measure Interest Expense

      563

      -

      563
    • Should We Retire Bonds Payable Before Their Maturity?

      563

      -

      564
    • Convertible Bonds and Notes

      564

      -

      564
  • +

    Account for Leases

    564

    -

    569

    ---

    • Types of Leases

      565

      -

      568
    • Do Lessees Prefer Operating Leases or Capital Leases?

      568

      -

      569
  • +

    Analyze the Advantages and Disadvantages of Borrowing

    569

    -

    570

    ---

    • Financing Operations with Bonds or Shares?

      569

      -

      570
  • +

    Evaluate a Company’s Debt-Paying Ability

    570

    -

    573

    ---

    • Debt Ratio

      570

      -

      571
    • The Times-Interest-Earned Ratio

      571

      -

      572
    • Reporting Financing Activities on the Statement of Cash Flows

      572

      -

      573
    • End-of-Chapter Summary Problem

      573

      -

      602
• +

  Chapter 10: Shareholders’ Equity

  602

  -

  665

  ---

  • Spotlight: L’Occitane

    602

    -

    604
  • +

    Explain the Features of a Corporation

    604

    -

    610

    ---

    • Organizing a Corporation

      605

      -

      610
  • +

    Account for the Issuance of Shares

    610

    -

    617

    ---

    • Ordinary Shares

      611

      -

      613
    • Share Issuance for Other than Cash Can Create an Ethical Challenge

      613

      -

      614
    • Preference Shares

      614

      -

      615
    • Mid-Chapter Summary Problem

      615

      -

      616
    • Authorized, Issued, and Outstanding Shares

      616

      -

      617
  • +

    Account for Treasury Shares

    617

    -

    620

    ---

    • How Are Treasury Shares Recorded?

      617

      -

      618
    • Resale of Treasury Shares

      618

      -

      619
    • Issuing Treasury Shares as Compensation

      619

      -

      619
    • Retiring Treasury Shares

      619

      -

      620
  • +

    Account for Other Equity Transactions

    620

    -

    625

    ---

    • Retained Earnings, Dividends, and Splits

      620

      -

      620
    • Should the Company Declare and Pay Cash Dividends?

      620

      -

      620
    • Cash Dividends

      620

      -

      621
    • Dividends on Preference Shares

      621

      -

      622
    • Dividends on Cumulative and Non-Cumulative Preference Shares

      622

      -

      622
    • Share Dividends

      622

      -

      623
    • Stock Splits

      623

      -

      624
    • Summary of the Effects on Assets, Liabilities, and Shareholders’ Equity

      624

      -

      625
  • +

    Understand the Different Values of Shares

    625

    -

    627

    ---

    • Market, Redemption, Liquidation, and Book Value

      625

      -

      626
    • Reporting Shareholders’ Equity Transactions

      626

      -

      626
    • Statement of Cash Flows

      626

      -

      627
  • +

    Evaluate a Company’s Return to Equity Holders

    627

    -

    630

    ---

    • End-of-Chapter Summary Problem

      630

      -

      665
• +

  Chapter 11: Cash Flows

  665

  -

  736

  ---

  • Spotlight: Singtel

    665

    -

    667
  • +

    Identify the Purposes of the Statement of Cash Flows

    667

    -

    669

    ---

    • How’s Your Cash Flow? Telltale Signs of Financial Difficulty

      668

      -

      669
  • +

    Distinguish Among Operating, Investing and Financing Cash Flow Activities

    669

    -

    673

    ---

    • Operating, Investing, and Financing Activities

      669

      -

      671
    • Two Formats for Operating Activities

      671

      -

      673
  • +

    Prepare Cash Flows from Operating Activities Using the Indirect Method

    673

    -

    676

    ---

    • Understanding Reconciliation of Net Income to Cash Flows from Operations

      674

      -

      676
  • Prepare Cash Flows from Investing Activities

    676

    -

    678
  • +

    Prepare Cash Flows from Financing Activities

    678

    -

    685

    ---

    • Completing the Statement of Cash Flows (Indirect CFO)

      681

      -

      682
    • Noncash Investing and Financing Activities

      682

      -

      683
    • Mid-Chapter Summary Problem

      683

      -

      685
  • +

    Prepare Cash Flows from Operating Activities Using the Direct Method

    685

    -

    691

    ---

    • Compute Operating Cash Flows by the Direct Method

      686

      -

      691
  • +

    Evaluate a Company’s Ability to Generate Cash Flows

    691

    -

    697

    ---

    • Free Cash Flow

      693

      -

      693
    • Cash Realization Ratio

      693

      -

      694
    • Examining Cash Flow Patterns

      694

      -

      697
    • End-of-Chapter Summary Problem

      697

      -

      736
• +

  Chapter 12: Financial Statement Analysis

  736

  -

  800

  ---

  • +

    Spotlight: Nestlé

    736

    -

    740

    ---

    • It Starts with the Big Picture

      739

      -

      740
  • +

    Perform Basic (Horizontal and Vertical) Analysis on Financial Statements

    740

    -

    745

    ---

    • Horizontal Analysis

      740

      -

      743
    • Trend Analysis

      743

      -

      744
    • Vertical Analysis

      744

      -

      745
  • +

    Prepare Common-Size Financial Statements

    745

    -

    748

    ---

    • Benchmarking

      745

      -

      747
    • Mid-Chapter Summary Problem

      747

      -

      748
  • +

    Perform Financial Ratio Analysis to Make Business Decisions

    748

    -

    762

    ---

    • Efficiency Ratios

      750

      -

      753
    • Financial Strength Ratios

      753

      -

      756
    • Profitability Ratios

      756

      -

      759
    • Investment Ratios

      759

      -

      761
    • Putting It All Together

      761

      -

      762
    • Using the Statement of Cash Flows

      762

      -

      762
  • +

    Use Other Information to Make Investment Decisions

    762

    -

    763

    ---

    • Economic Value Added (EVA®)

      762

      -

      763
  • +

    Other Issues in Financial Statement Analysis

    763

    -

    766

    ---

    • Limitations of Ratio Analysis

      763

      -

      764
    • Red Flags in Financial Statement Analysis

      764

      -

      766
    • End-of-Chapter Summary Problem

      766

      -

      800
• Glindex

  800

  -

  811
• Company Index

  811

  -

  817
• Back Cover

  817

  -

  818

Über die Autoren

Walter Harrison

Author

Charles Horngren

Author

C. Thomas

Author

Themin Suwardy

Author

Wendy Tietz

Author