Step-by-Step Process for the Accounting Cycle

Financial Accounting was the FIRST text to illustrate Balance Sheet and Income Statement transactions using the four-step process described below. This hallmark coverage has been further revised and refined in this edition.

The authors break down the Accounting Cycle into three full chapters to help students absorb and understand this material: recording entries (Chapter 3), adjusting entries (Chapter 4), and closing entries (Chapter 5). Transactions are demonstrated visually to help students conquer recording transactions by showing the four steps in the process:

1. Analysis — shows which accounts are recorded with an increase/decrease.

2. Debit/Credit Rules — helps students to remember whether the account should be debited/credited.

3. Journal Entry — shows the result of the two previous steps.

4. Ledger T-Accounts — shows students what was recorded and where.

The authors puts the Accounting Equation (A = L + OE) in the margin by transaction illustrations to show students the big picture!

Robust End-of-Chapter Material

Brief Exercises supplement the exercises with shorter, single-concept exercises that test the basic concepts of each chapter. These brief exercises give instructors more flexibility in their homework assignments.

An Alternate Problem Set provides students with even more practice on important concepts.

Six Comprehensive Problems, ranging from two to five pages in length, present students with real-world scenarios and challenge them to apply what they’ve learned in the chapters leading up to them.

Defined Key Terms and Self-Test Questions review and reinforce chapter material.

Demonstration Problems and their solutions allow students to test their knowledge of key points in the chapters.

Critical Thinking Cases and Problems put students’ analytical skills to the test by having them think critically about key concepts from the chapter and apply them to business decisions.

TWO sets of Problems and a full set of Exercises in EACH chapter give Financial Accounting the edge in homework materials.

Ethics Cases in each chapter challenge students to explore the ethical impact of decisions made in business.

The Adidas AG, Herzogenaurach 2009 Consolidated Group Financial Statements and Additional Information are included in Appendix A. Students are referred to key aspects of the Financial Statements and in end-of-chapter material to illustrate actual business applications of chapter concepts.