Accounting What the Numbers Mean

Machine generated contents note: 1.Accounting -- Present and Past -- What Is Accounting? -- Financial Accounting -- Managerial Accounting/Cost Accounting -- Auditing -- Public Accounting -- Internal Auditing -- Governmental and Not-for-Profit Accounting -- Income Tax Accounting -- How Has Accounting Developed? -- Early History -- The Accounting Profession in the United States -- Financial Accounting Standard Setting at the Present Time -- Standards for Other Types of Accounting -- International Accounting Standards -- Ethics and the Accounting Profession -- The Conceptual Framework -- Summary of Concepts Statement No.8, Chapter 1: "The Objective of General Purpose Financial Reporting" -- Objectives of Financial Reporting for Nonbusiness Organizations -- Plan of the Book -- Resources for Students -- 2.Financial Statements and Accounting Concepts/Principles -- Financial Statements -- From Transactions to Financial Statements -- Financial Statements Illustrated -- Explanations and Definitions -- Comparative Statements in Subsequent Years -- Illustration of Financial Statement Relationships -- Accounting Concepts and Principles -- Concepts/Principles Related to the Entire Model -- Concepts/Principles Related to Transactions -- Concepts/Principles Related to Bookkeeping Procedures and the Accounting Process -- Concepts/Principles Related to Financial Statements -- Limitations of Financial Statements -- The Corporation's Annual Report -- 3.Fundamental Interpretations Made from Financial Statement Data -- Financial Ratios and Trend Analysis -- Return on Investment -- The DuPont Model: An Expansion of the ROI Calculation -- Return on Equity -- Working Capital and Measures of Liquidity -- Illustration of Trend Analysis -- 4.The Bookkeeping Process and Transaction Analysis -- The Bookkeeping/Accounting Process -- The Balance Sheet Equation -- A Mechanical Key -- Transactions -- Bookkeeping Jargon and Procedures -- Understanding the Effects of Transactions on the Financial Statements -- Adjustments -- Transaction Analysis Methodology -- 5.Accounting for and Presentation of Current Assets -- Cash and Cash Equivalents -- The Bank Reconciliation as a Control over Cash -- Short-Term Marketable Securities -- Balance Sheet Valuation -- Interest Accrual -- Accounts Receivable -- Bad Debts/Uncollectible Accounts -- Cash Discounts -- Notes Receivable -- Interest Accrual -- Inventories -- Inventory Cost Flow Assumptions -- The Impact of Changing Costs (Inflation/ Deflation) -- Selecting an Inventory Cost Flow Assumption -- Inventory Accounting System Alternatives -- Inventory Errors -- Balance Sheet Valuation at the Lower of Cost or Market -- Prepaid Expenses and Other Current Assets -- 6.Accounting for and Presentation of Property, Plant, and Equipment, and Other Noncurrent Assets -- Land -- Buildings and Equipment -- Cost of Assets Acquired -- Depreciation for Financial Accounting Purposes -- Repair and Maintenance Expenditures -- Disposal of Depreciable Assets -- Assets Acquired by Capital Lease -- Intangible Assets -- Leasehold Improvements -- Patents, Trademarks, and Copyrights -- Goodwill -- Natural Resources -- Other Noncurrent Assets -- Appendix -- Time Value of Money -- Future Value -- Future Value of an Annuity -- Present Value -- Present Value of an Annuity -- Impact of Compounding Frequency -- 7.Accounting for and Presentation of Liabilities -- Current Liabilities -- Short-Term Debt -- Current Maturities of Long-Term Debt -- Accounts Payable -- Unearned Revenue or Deferred Credits -- Payroll Taxes and Other Withholdings -- Other Accrued Liabilities -- Noncurrent Liabilities -- Long-Term Debt -- Deferred Tax Liabilities -- Other Noncurrent Liabilities -- Contingent Liabilities -- 8.Accounting for and Presentation of Stockholders' Equity -- Paid-In Capital -- Common Stock -- Preferred Stock -- Additional Paid-In Capital -- Retained Earnings -- Cash Dividends -- Stock Dividends and Stock Splits -- Accumulated Other Comprehensive Income (Loss) -- Treasury Stock -- Reporting Changes in Stockholders' Equity Accounts -- Noncontrolling Interest -- Owners' Equity for Other Types of Entities -- Proprietorships and Partnerships -- Not-for-Profit and Governmental Organizations -- Appendix -- Personal Investing -- 9.The Income Statement and the Statement of Cash Flows -- Income Statement -- Revenues -- Expenses -- Cost of Goods Sold -- Gross Profit or Gross Margin -- Operating Expenses -- Income from Operations -- Other Income and Expenses -- Income before Income Taxes and Income Tax Expense -- Net Income and Earnings per Share -- Income Statement Presentation Alternatives -- Unusual or Frequently Occurring Items Sometimes Seen on an Income Statement -- Statement of Cash Flows -- Content and Format of the Statement -- Interpreting the Statement of Cash Flows -- 10.Corporate Governance, Notes to the Financial Statements, and Other Disclosures -- Corporate Governance -- Financial Reporting Misstatements -- General Organization of Notes to the Financial Statements -- Notes to the Financial Statements 366 Significant Accounting Policies -- Details of Other Financial Statement Amounts -- Other Disclosures -- Management's Statement of Responsibility -- Management's Discussion and Analysis (MD&A) -- Five-Year (or Longer) Summary of Financial Data -- Independent Auditors' Report -- Financial Statement Compilations -- 11.Financial Statement Analysis -- Financial Statement Analysis Ratios -- Liquidity Measures -- Activity Measures -- Profitability Measures -- Financial Leverage Measures -- Other Analytical Techniques -- Book Value per Share of Common Stock -- Common Size Financial Statements -- Other Operating Statistics -- 12.Managerial Accounting and Cost-Volume-Profit Relationships -- Managerial Accounting Contrasted to Financial Accounting -- Cost Classifications -- Relationship of Total Cost to Volume of Activity -- Applications of Cost -- Volume -- Profit Analysis -- Cost Behavior Pattern: The Key -- Estimating Cost Behavior Patterns -- A Modified Income Statement Format -- An Expanded Contribution Margin Model -- Multiple Products or Services and Sales Mix Considerations -- Break-Even Point Analysis -- Operating Leverage -- 13.Cost Accounting and Reporting -- Cost Management -- Cost Accumulation and Assignment -- Cost Relationship to Products or Activity -- Costs for Cost Accounting Purposes -- Cost Accounting Systems -- Cost Accounting Systems -- General Characteristics -- Cost Accounting Systems -- Job Order Costing, Process Costing, and Hybrid Costing -- Cost Accounting Methods -- Absorption Costing and Direct Costing -- Cost Accounting Systems in Service Organizations -- Activity-Based Costing -- 14.Cost Planning -- Cost Classifications -- Relationship of Total Cost to Volume of Activity -- Cost Classification According to a Time-Frame Perspective -- Budgeting -- The Budgeting Process in General -- The Budget Time Frame -- The Budgeting Process -- The Purchases/Production Budget -- The Cost of Goods Sold Budget -- The Operating Expense Budget -- The Budgeted Income Statement -- The Cash Budget -- The Budgeted Balance Sheet -- Standard Costs -- Using Standard Costs -- Developing Standards -- Costing Products with Standard Costs -- Other Uses of Standards -- Budgeting for Other Analytical Purposes -- 15.Cost Control -- Cost Classifications -- Relationship of Total Cost to Volume of Activity -- Cost Classification According to a Time-Frame Perspective -- Performance Reporting -- Characteristics of the Performance Report -- The Flexible Budget -- Standard Cost Variance Analysis -- Analysis of Variable Cost Variances -- Analysis of Fixed Overhead Variance -- Accounting for Variances -- Analysis of Organizational Units -- Reporting for Segments of an Organization -- The Analysis of Investment Centers -- The Balanced Scorecard -- 16.Costs for Decision Making -- Cost Classifications -- Cost Classifications for Other Analytical Purposes -- Short-Run Decision Analysis -- Relevant Costs -- Relevant Costs in Action -- The Sell or Process Further Decision -- Relevant Costs in Action -- The Special Pricing Decision -- Relevant Costs in Action -- The Target Costing Question -- Relevant Costs in Action -- The Make or Buy Decision -- Relevant Costs in Action -- The Continue or Discontinue a Segment Decision -- Relevant Costs in Action -- The Short-Term Allocation of Scarce Resources -- Long-Run Investment Analysis -- Capital Budgeting -- Investment Decision Special Considerations -- Cost of Capital -- Capital Budgeting Techniques -- The Investment Decision -- Integration of the Capital Budget with Operating Budgets.