Contents
Feature Story: Knowing the Numbers
The Building Blocks of Accounting
Generally Accepted Accounting Principles
APPENDIX 1A Accounting Career Opportunities
Chapter 2
The Recording Process
Feature Story: Accidents Happen
Steps in the Recording Process
The Recording Process Illustrated
Summary Illustration of Journalizing and Posting
Limitations of a Trial Balance
Chapter 3
Adjusting the Accounts
Feature Story: Keeping Track of Groupons
Accrual- vs. Cash-Basis Accounting
Recognizing Revenues and Expenses
The Basics of Adjusting Entries
Adjusting Entries for Deferrals
Adjusting Entries for Accruals
Summary of Basic Relationships
The Adjusted Trial Balance and Financial Statements
Preparing the Adjusted Trial Balance
Preparing Financial Statements
APPENDIX 3A Alternative Treatment of Prepaid Expenses and Unearned Revenues
Summary of Additional Adjustment Relationships
Chapter 4
Completing the Accounting Cycle
Feature Story: Everyone Likes to Win
Steps in Preparing a Worksheet
Preparing Financial Statements from a Worksheet
Preparing Adjusting Entries from a Worksheet
Preparing a Post-Closing Trial Balance
Summary of the Accounting Cycle
Reversing Entries—An Optional Step
Correcting Entries—An Avoidable Step
Property, Plant, and Equipment
Chapter 5
Accounting for Merchandising Operations
Feature Story: Buy Now, Vote Later
Recording Purchases of Merchandise
Purchase Returns and Allowances
Summary of Purchasing Transactions
Recording Sales of Merchandise
Completing the Accounting Cycle
Summary of Merchandising Entries
Multiple-Step Income Statement
APPENDIX 5A Worksheet for a Merchandising Company—Perpetual Inventory
APPENDIX 5B Periodic Inventory System
Determining Cost of Goods Sold Under a Periodic System
Recording Merchandise Transactions
Recording Purchases of Merchandise
Recording Sales of Merchandise
Journalizing and Posting Closing Entries
Feature Story: “Where Is That Spare Bulldozer Blade?”
Classifying and Determining Inventory
Determining Inventory Quantities
Financial Statement and Tax Effects of Cost Flow Methods
Using Inventory Cost Flow Methods Consistently
Statement Presentation and Analysis
APPENDIX 6A Inventory Cost Flow Methods in Perpetual Inventory Systems
APPENDIX 6B Estimating Inventories
Chapter 7
Accounting Information Systems
Feature Story: QuickBooks® Helps This Retailer Sell Guitars
Basic Concepts of Accounting Information Systems
Computerized Accounting Systems
Advantages of Subsidiary Ledgers
Effects of Special Journals on the General Journal
Chapter 8
Fraud, Internal Control, and Cash
Feature Story: Minding the Money in Moose Jaw
Principles of Internal Control Activities
Limitations of Internal Control
Control Features: Use of a Bank
Electronic Funds Transfer (EFT) System
Chapter 9
Accounting for Receivables
Feature Story: A Dose of Careful Management Keeps Receivables Healthy
Recognizing Accounts Receivable
Disposing of Accounts Receivable
Statement Presentation and Analysis
Chapter 10
Plant Assets, Natural Resources, and Intangible Assets
Feature Story: How Much for a Ride to the Beach?
Determining the Cost of Plant Assets
Expenditures During Useful Life
Accounting for Intangible Assets
Research and Development Costs
Statement Presentation and Analysis
APPENDIX 10A Exchange of Plant Assets
Chapter 11
Current Liabilities and Payroll Accounting
Feature Story: Financing His Dreams
Current Maturities of Long-Term Debt
Statement Presentation and Analysis
Recording a Contingent Liability
Disclosure of Contingent Liabilities
Filing and Remitting Payroll Taxes
APPENDIX 11A Additional Fringe Benefits
Chapter 12
Accounting for Partnerships
Feature Story: From Trials to the Top Ten
Partnership Form of Organization
Characteristics of Partnerships
Organizations with Partnership Characteristics
Advantages and Disadvantages of Partnerships
Dividing Net Income or Net Loss
Partnership Financial Statements
APPENDIX 12A Admission and Withdrawal of Partners
Chapter 13
Corporations: Organization and Capital Stock Transactions
Feature Story: What's Cooking?
The Corporate Form of Organization
Characteristics of a Corporation
Accounting for Issues of Common Stock
Issuing Par Value Common Stock for Cash
Issuing No-Par Common Stock for Cash
Issuing Common Stock for Services or Noncash Assets
Accounting for Preferred Stock
Chapter 14
Corporations: Dividends, Retained Earnings, and Income Reporting
Feature Story: Owning a Piece of the Action
Retained Earnings Restrictions
Statement Presentation and Analysis
Chapter 15
Long-Term Liabilities
Feature Story: And Then There Were Two
Determining the Market Price of a Bond
Accounting for Bond Redemptions
Redeeming Bonds before Maturity
Converting Bonds into Common Stock
Accounting for Other Long-Term Liabilities
Statement Presentation and Analysis
APPENDIX 15A Present Value Concepts Related to Bond Pricing
Present Value of a Single Amount
Present Value of Interest Payments (Annuities)
Computing the Present Value of a Bond
APPENDIX 15B Effective-Interest Method of Bond Amortization
APPENDIX 15C Straight-Line Amortization
Feature Story: “Is There Anything Else We Can Buy?”
Accounting for Debt Investments
Recording Acquisition of Bonds
Accounting for Stock Investments
Valuing and Reporting Investments
Presentation of Realized and Unrealized Gain or Loss
Chapter 17
Statement of Cash Flows
The Statement of Cash Flows: Usefulness and Format
Usefulness of the Statement of Cash Flows
Significant Noncash Activities
Format of the Statement of Cash Flows
Preparing the Statement of Cash Flows
Preparing the Statement of Cash Flows—Indirect Method
Summary of Conversion to Net Cash Provided by Operating Activities—Indirect Method
Step 2: Investing and Financing Activities
Using Cash Flows to Evaluate a Company
APPENDIX 17A Statement of Cash Flows—Direct Method
Step 2: Investing and Financing Activities
APPENDIX 17B Using a Worksheet to Prepare the Statement of Cash Flows—Indirect Method
Chapter 18
Financial Statement Analysis
Feature Story: It Pays to Be Patient
Basics of Financial Statement Analysis
Earning Power and Irregular Items
Changes in Accounting Principle
Alternative Accounting Methods
Chapter 19
Managerial Accounting
Feature Story: Just Add Water . . . and Paddle
Comparing Managerial and Financial Accounting
Manufacturing Costs in Financial Statements
Cost of Goods Manufactured Schedule
Product Costing for Service Industries
Corporate Social Responsibility
Feature Story: She Succeeds Where Others Have Failed
Accumulating Manufacturing Costs
Assigning Manufacturing Costs to Work in Process
Assigning Costs to Finished Goods
Assigning Costs to Cost of Goods Sold
Summary of Job Order Cost Flows
Job Order Costing for Service Companies
Advantages and Disadvantages of Job Order Costing
Under- or Overapplied Manufacturing Overhead
Feature Story: Ben & Jerry's Tracks Its Mix-Ups
The Nature of Process Cost Systems
Process Costing for Service Companies
Similarities and Differences Between Job Order Cost and Process Cost Systems
Assigning Manufacturing Costs—Journal Entries
Refinements on the Weighted-Average Method
Compute the Physical Unit Flow (Step 1)
Compute Equivalent Units of Production (Step 2)
Compute Unit Production Costs (Step 3)
Prepare a Cost Reconciliation Schedule (Step 4)
Preparing the Production Cost Report
Costing Systems—Final Comments
APPENDIX 21A Example of Traditional Costing versus Activity-Based Costing
Unit Costs Under Traditional Costing
Feature Story: Don't Worry—Just Get Big
Importance of Identifying Variable and Fixed Costs
CVP and Changes in the Business Environment
CVP Income Statement Revisited
Example Comparing Absorption Costing with Variable Costing
Rationale for Variable Costing
Feature Story: Was This the Next Amazon.com? Not Quite
Essentials of Effective Budgeting
Budgeting and Long-Range Planning
Preparing the Operating Budgets
Selling and Administrative Expense Budget
Preparing the Financial Budgets
Budgeting in Nonmanufacturing Companies
Chapter 24
Budgetary Control and Responsibility Accounting
Feature Story: Turning Trash into Treasure
Developing the Flexible Budget
Controllable versus Noncontrollable Revenues and Costs
Principles of Performance Evaluation
Responsibility Reporting System
Types of Responsibility Centers
Responsibility Accounting for Cost Centers
Responsibility Accounting for Profit Centers
Responsibility Accounting for Investment Centers
Chapter 25
Standard Costs and Balanced Scorecard
Feature Story: 80,000 Different Caffeinated Combinations
Distinguishing Between Standards and Budgets
Analyzing and Reporting Variances from Standards
Manufacturing Overhead Variances
Statement Presentation of Variances
APPENDIX 25A Standard Cost Accounting System
APPENDIX 25B A Closer Look at Overhead Variances
Overhead Controllable Variance
Chapter 26
Incremental Analysis and Capital Budgeting
Feature Story: Make It or Buy It?
Management's Decision-Making Process
How Incremental Analysis Works
Accept an Order at a Special Price
Repair, Retain, or Replace Equipment
Eliminate an Unprofitable Segment or Product
Comparing Discounted Cash Flow Methods
Appendix A
Specimen Financial Statements: Apple Inc.
Appendix B
Specimen Financial Statements: PepsiCo, Inc.
Appendix C
Specimen Financial Statements: The Coca-Cola Company
Appendix D
Specimen Financial Statements: Amazon.com, Inc.
Appendix E
Specimen Financial Statements: Wal-Mart Stores, Inc.
Appendix F
Specimen Financial Statements: Zetar plc
Present Value of a Single Amount
Computing the Present Value of a Long-Term Note or Bond
Appendix H (available online at www.wiley.com/college/weygandt)
Using Financial Calculators
Useful Applications of the Financial Calculator
IMA Statement of Ethical Professional Practice