• EMPHASIS ON ETHICS FOCUSES ON PRACTICAL APPROACH. Actual ethical situations related to the chapter’s topics are integrated throughout each chapter. In some features, called Ethics: Do It, the situation illustrates a positive ethical response. In other features, called Ethics: Don’t Do It, the situation demonstrates a negative ethical response.
• CASES AND PROJECTS DEEPEN STUDENT UNDERSTANDING OF IMPORTANT BUSINESS ISSUES. Specific, carefully constructed assignments address ethics, communication, and team activities. You can assign theses case and projects as homework or use them to enrich class discussion.

Chapter 1 Introduction to Accounting and Business

Nature of Business and Accounting

Generally Accepted Accounting Principles

The Accounting Equation

Business Transactions and the Accounting Equation

Financial Statements

Financial Analysis and Interpretation: Ratio of Liabilities to Owner’s Equity

Chapter 2 Analyzing Transactions

Using Accounts to Record Transactions

Double-Entry Accounting System

Journalizing and Posting to Accounts

Trial Balance

Financial Analysis and Interpretation: Horizontal Analysis

Chapter 3 The Adjusting Process

Nature of the Adjusting Process

Adjusting Entries for Accruals

Adjusting Entries for Deferrals

Adjusting Entries for Depreciation

Summary of Adjusting Process

Adjusted Trial Balance

Financial Analysis and Interpretation: Vertical Analysis

Chapter 4 Completing the Accounting Cycle

Flow of Accounting Information

Financial Statements

Closing Entries

Accounting Cycle

Illustration of the Accounting Cycle

Fiscal Year

Financial Analysis and Interpretation: Working Capital and Current Ratio

End-of-Period Spreadsheet

Reversing Entries

Chapter 5 Accounting Systems

Basic Accounting Systems

Manual Accounting Systems

Computerized Accounting Systems

E-Commerce

Financial Analysis and Interpretation: Segment Analysis

Chapter 6 Accounting for Merchandising Businesses

Nature of Merchandising Businesses

Merchandising Transactions

The Adjusting Process

Financial Statements for a Merchandising Business

Financial Analysis and Interpretation: Asset Turnover

The Periodic Inventory System

Chapter 7 Inventories

Control of Inventory

Inventory Cost Flow Assumptions

Inventory Costing Methods Under a Perpetual Inventory System

Inventory Costing Methods Under a Periodic Inventory System

Comparing Inventory Costing Methods

Reporting Merchandise Inventory in the Financial Statements

Financial Analysis and Interpretation: Inventory Turnover and Days’ Sales in Inventory

Estimating Inventory Cost

Chapter 8 Internal Control and Cash

Sarbanes-Oxley Act

Internal Control

Cash Controls over Receipts and Payments

Bank Accounts

Bank Reconciliation

Special-Purpose Cash Funds

Financial Statement Reporting of Cash

Financial Analysis and Interpretation: Ratio of Cash to Monthly Cash Expenses

Chapter 9 Receivables

Classification of Receivables

Uncollectible Receivables

Direct Write-Off Method for Uncollectible Accounts

Allowance Method for Uncollectible Accounts

Comparing Direct Write-Off and Allowance Methods

Notes Receivable

Reporting Receivables on the Balance Sheet

Financial Analysis and Interpretation: Accounts Receivable Turnover and Days’ Sales in Receivables

Chapter 10 Long-Term Assets: Fixed and Intangible

Nature of Fixed Assets

Accounting for Depreciation

Disposal of Fixed Assets

Natural Resources

Intangible Assets

Financial Reporting for Long-Term Assets: Fixed and Intangible

Financial Analysis and Interpretation: Fixed Asset Turnover Ratio

Exchanging Similar Fixed Assets

Chapter 11 Current Liabilities and Payroll

Current Liabilities

Payroll and Payroll Taxes

Accounting Systems for Payroll and Payroll Taxes

Employees’ Fringe Benefits

Contingent Liabilities

Financial Analysis and Interpretation: Quick Ratio

Chapter 12 Accounting for Partnerships and Limited Liability Companies

Proprietorships, Partnerships, and Limited Liability Companies

Forming a Partnership and Dividing Income

Partner Admission and Withdrawal

Liquidating Partnerships

Statement of Partnership Equity

Financial Analysis and Interpretation: Revenue per Employee

Chapter 13 Corporations: Organization, Stock Transactions, and Dividends

Nature of a Corporation

Stockholders’ Equity

Paid-In Capital from Stock

Accounting for Dividends

Stock Splits

Treasury Stock Transactions

Reporting Stockholders’ Equity

Financial Analysis and Interpretation: Earnings per Share

Chapter 14 Long-Term Liabilities: Bonds and Notes

Financing Corporations

Nature of Bonds Payable

Accounting for Bonds Payable

Installment Notes

Reporting Long-Term Liabilities

Financial Analysis and Interpretation: Times Interest Earned Ratio

Present Value Concepts and Pricing Bonds Payable

Interest Rate Method of Amortization

Chapter 15 Investments and Fair Value Accounting

Why Companies Invest

Accounting for Debt Investments

Accounting for Equity Investments

Valuing and Reporting Investments

Fair Value Accounting

Financial Analysis and Interpretation: Dividend Yield

Comprehensive Income

Chapter 16 Statement of Cash Flows

Reporting Cash Flows

Preparing the Statement of Cash Flows—The Direct Method

Financial Analysis and Interpretation: Free Cash Flow

Spreadsheet (Work Sheet) for Statement of Cash Flows—The Indirect Method

Chapter 17 Financial Statement Analysis

Analyzing and Interpreting Financial Statements

Basic Analytical Methods

Analyzing Liquidity

Analyzing Solvency

Analyzing Profitability

Corporate Annual Reports

Unusual Items on the Income Statement

Mornin’ Joe MJ-1

Financial Statements for Mornin’ Joe MJ-2

Financial Statements for Mornin’ Joe

International MJ-5

Appendix A: Interest Tables

Appendix B: International Financial Reporting Standards (IFRS)

Appendix C: Revenue Recognition

Appendix D: Nike Inc., Form 10-K for the Fiscal Year Ended May 31, 2016

Glossary

Index

Carl Warren, University of Georgia, Athens

Dr. Carl S. Warren is Professor Emeritus of Accounting at the University of Georgia, Athens. Dr. Warren has taught classes at the University of Georgia, University of Iowa, Michigan State University and University of Chicago. He has focused his teaching efforts on principles of accounting and auditing. Dr. Warren received his Ph.D. from Michigan State University and his B.B.A. and M.A. from the University of Iowa. During his career, Dr. Warren published numerous articles in professional journals, including The Accounting Review, Journal of Accounting Research, Journal of Accountancy, The CPA Journal and Auditing: A Journal of Practice and Theory. Dr. Warren has served on numerous committees of the American Accounting Association, the American Institute of Certified Public Accountants and the Institute of Internal Auditors. He also has consulted with numerous companies and public accounting firms. His outside interests include handball, golf, skiing, backpacking and fly-fishing. 

James M. Reeve, University of Tennessee

Dr. James M. Reeve is Professor Emeritus of Accounting and Information Management at the University of Tennessee. Dr. Reeve taught full-time as part of the accounting faculty for twenty-five years after graduating with his PhD from Oklahoma State University. He presently teaches part-time at UT. His teaching efforts focused on Senior Executive MBA programs. His research interests are varied and include work in managerial accounting, supply chain management, lean manufacturing, and information management. He has published more than forty articles in academic and professional journals, including Journal of Cost Management, Journal of Management Accounting Research, Accounting Review, Management Accounting Quarterly, Supply Chain Management Review, and Accounting Horizons. He has consulted or provided training around the world for a variety of organizations, including Boeing, Procter & Gamble, Norfolk Southern, Hershey Foods, Coca-Cola, and Sony. When not writing books, Dr. Reeve plays golf and is involved in faith-based activities.

Jonathan Duchac, Wake Forest University

Dr. Jonathan Duchac is the Wayne Calloway Professor of Accounting and Acting Associate Dean of Accounting Programs at Wake Forest University. He earned his PhD in accounting from the University of Georgia and currently teaches introductory and advanced courses in financial accounting. Dr. Duchac has received a number of awards during his career, including the Wake Forest University Outstanding Graduate Professor Award, the T.B. Rose award for Instructional Innovation, and the University of Georgia Outstanding Teaching Assistant Award. In addition to his teaching responsibilities, Dr. Duchac has served as Accounting Advisor to Merrill Lynch Equity Research, where he worked with research analysts in reviewing and evaluating the financial reporting practices of public companies. He has testified before the U.S. House of Representatives, the Financial Accounting Standards Board, and the Securities and Exchange Commission and has worked with a number of major public companies on financial reporting and accounting policy issues. In addition to his professional interests, Dr. Duchac is an avid mountain biker and snow skier.