Chapter One - Financial Statements and Business Decisions Maxidrive Corporation
Understanding the Business
The Four Basic Financial Statements: An Overview
The Balance Sheet
Financial Analysis: Interpreting Assets, Liabilities, and Stockholders' Equity on the Balance Sheet Self-Study Quiz
The Income Statement
Financial Analysis: Analyzing the Income Statement: Beyond the Bottom Line Self-Study Quiz
Statement of Retained Earnings
Financial Analysis: Interpreting Retained Earnings
Statement of Cash Flows
Financial Analysis: Interpreting the Cash Flow Statement Self-Study Quiz
Relationship among the Statements
Notes
Financial Analysis: Management Uses of Financial Statements
Using Financial Statements to Determine Maxidrive's Value
Correcting Maxidrive's Income Statement
Determining the Purchase Price for Maxidrive
Responsibilities for the Accounting Communication Process
Generally Accepted Accounting Principles
International Perspective: Are Generally Accepted Accounting PrinciplesSimilar in Other Countries?
Management Responsibility and the Demand for Auditing
Ethics, Reputation, and Legal Liability
Epilogue
Demonstration Case
Chapter Supplement A: Types of Business Entities
Chapter Supplement B: Employment in the Accounting Profession Today
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Two - Investing and Financing Decisions and the Balance Sheet Papa John's International
Understanding the Business
Overview of the Conceptual Framework
Concepts Emphasized in Chapter 2
Elements of the Balance Sheet
A Question of Ethics: Environmental Liabilities Key Ratio Analysis: The Financial Leverage Ratio Self-Study Quiz Financial Analysis: Unrecorded but Valuable Assets
What Business Activities Cause Changes in Financial Statement Amounts?
Nature of Business Transactions
Accounts
Self-Study Quiz International Perspective: Understanding the Meaning of Account Titles in Foreign Financial Statements
How Do Transactions Affect Accounts?
Principles of Transaction Analysis
Analyzing Papa John's Transactions
Self-Study Quiz
How Do Companies Keep Track of Account Balances?
The Direction of Transaction Effects
Analytical Tool: The Journal Entry
Analytical Tool: The T-Account
Transaction Analysis Illustrated
Self-Study Quiz Financial Analysis: Inferring Business Activities from T-Accounts
How Is the Balance Sheet Prepared?
Focus on Cash Flows: Investing and Financing Activities Self-Study Quiz
Demonstration Case
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Three - Operating Decisions and the Income Statement Papa John's International
Understanding the Business
How Do Business Activities Affect the Income Statement?
Operating Cycle
Elements on the Income Statement
Key Ratio Analysis: The Total Asset Turnover Ratio
How Are Operating Activities Measured?
Accrual Accounting
Self-Study Quiz A Question of Ethics: Management's Incentives to Violate the Revenue Principle Self-Study Quiz
Expanded Transaction Analysis Model
Transaction Analysis Rules
Financial Analysis: Feedback Value of Accounting Information and Stock Market Reaction
Analyzing Papa John's Transactions
Self-Study Quiz
How Are Unadjusted Financial Statements Prepared?
Unadjusted Income Statement
Financial Analysis: Reporting Financial Information by Geographic and Operating Segments
Unadjusted Statement of Retained Earnings
Unadjusted Balance Sheet
Focus on Cash Flows: Operating Activities Self-Study Quiz
Demonstration Case
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Four - Adjustments, Financial Statements, and the Quality of Earnings Papa John's International
Understanding the Business
Adjusting Revenues and Expenses
Accounting Cycle
Unadjusted Trial Balance
Analysis of Adjusting Entries
Self-Study Quiz
Papa John's Illustration
Self-Study Quiz Financial Analysis: Adjustments and Audits A Question of Ethics: Adjustments and Incentives
Preparing Financial Statements
Focus on Cash Flows: Disclosure Financial Analysis: Cash Flows from Operations, Net Income, and the Quality of Earninges Key Ratio Analysis: Net Profit Margin Ratio
Closing the Books
End of the Accounting Cycle
Post-Closing Trial Balance
Financial Analysis: Accruals and Deferrals: Judging Earnings Quality
Demonstration Case
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Five - Communicating and Interpreting Accounting Information Callaway Golf
Understanding the Business
Players in the Accounting Communication Process
Managers (CEO, CFO, and Accounting Staff)
Auditors
Information Intermediaries: Analysts and Information Services
Financial Analysis: Information Services: Uses in Marketing, Classwork, and Job Searches
Government Regulators
Users: Institutional and Private Investors, Creditors, and Others
A Question of Ethics: Conflicting Interests of Managers, Stockholders, and Creditors
Guiding Principles for Communicating Useful Information
Self-Study Quiz
The Disclosure Process
Press Releases
Annual Reports
Quarterly Reports
SEC Reports--10-K, 10-Q, 8-K
International Perspective: Judging International Sales Strategy from the Form 10-K
A Closer Look at Financial Statement Formats and Notes
Classified Balance Sheet
Financial Analysis: Balance Sheet Ratios and Debt Contracts
Classified Income Statement
Financial Analysis: Accounting-Based Executive Bonuses Self-Study Quiz
Statement of Stockholders' Equity
Statement of Cash Flows
Focus on Cash Flows: Operating Activities (Indirect Method)
Notes to Financial Statements
Financial Analysis: Alternative Accounting Methods and GAAP
Voluntary Disclosures
Constraints of Accounting Measurement
Return on Equity Analysis: A Framework for Evaluating Company Performance
Key Ratio Analysis: Return on Equity
ROE Profit Driver Analysis
Profit Drivers and Business Strategy
Self-Study Quiz
Epilogue
Demonstration Case
Chapter Supplement: Nonrecurring Items
Chapter Take-Aways
Key Ratios
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Six - Reporting and Interpreting Sales Revenue, Receivables, and Cash The Timberland Company
Understanding the Business
Accounting for Sales Revenue
Credit Card Sales to Consumers
Sales Discounts to Businesses
Financial Analysis: To Take or Not to Take the Discount, That Is the Question
Sales Returns and Allowances
Reporting Net Sales
Key Ratio Analysis: Gross Profit Percentage Self-Study Quiz
Measuring and Reporting Receivables
Classifying Receivables
International Perspective: Foreign Currency Receivables
Accounting for Bad Debts
Reporting Accounts Receivable and Bad Debts
Estimating Bad Debts
Control over Accounts Receivable
Key Ratio Analysis: Receivables Turnover Focus on Cash Flows: Accounts Receivable Self-Study Quiz
Reporting and Safeguarding Cash
Cash and Cash Equivalents Defined
Cash Management
Internal Control of Cash
A Question of Ethics: Ethics and the Need for Internal Control
Reconciliation of the Cash Accounts and the Bank Statements
Self-Study Quiz
Epilogue
Demonstration Case A
Demonstration Case B
Chapter Supplement A: Recording Discounts and Returns
Chapter Supplement B: Applying the Revenue Principle in Special Circumstances
Chapter Take-Aways
Key Ratios
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Seven - Reporting and Interpreting Cost of Goods Sold and Inventory Harley-Davidson, Inc.
Understanding the Business
Nature of Inventory and Cost of Goods Sold
Items Included in Inventory
Financial Analysis: Applying the Materiality Constraint in Practice
Flow of Inventory Costs
Financial Analysis: Modern Manufacturing Techniques and Inventory Costs
Nature of Cost of Goods Sold
Self-Study Quiz
Inventory Costing Methods
Specific Identification Method
Cash Flow Assumptions
Financial Statement Effects of Inventory Methods
Managers' Choice of Inventory Methods
A Question of Ethics: LIFO and Conflicts between Managers' and Owner's Interests Self-Study Quiz
Inventory Methods and Financial Statement Analysis
International Perspective: LIFO and International Comparisons Self-Study Quiz
Valuation at Lower of Cost or Market
Evaluating Inventory Management
Measuring Efficiency in Inventory
Key Ratio Analysis: Inventory Turnover Financial Analysis: LIFO and Inventory Turnover Ratio
Inventory and Cash Flows
Focus on Cash Flows: Inventory Self-Study Quiz
Control of Inventory
Errors in Measuring Ending Income
Perpetual and Periodic Inventory Systems
Self-Study Quiz
Demonstration Case
Chapter Supplement A: LIFO Liquidations
Financial Analysis: Inventory Management and LIFO Liquidations
Chapter Supplement B: Additional Issues in Measuring Purchases
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Eight - Reporting and Interpreting Property, Plan, and Equipment: Natural Resources and Intangibles Delta Airlines
Understanding the Business
Acquisition and Maintenance of Property, Plant, and Equipment
Classifying Long-Lived Assets
Key Ratio Analysis: Fixed Asset Turnover
Measuring and Recording Acquisition Cost
Self-Study Quiz
Repairs, Maintenance, and Additions
Self-Study Quiz
Use, Impairment, and Disposal of Plant and Equipment
Depreciation Concepts
Financial Analysis: Book Value as an Approximation of Remaining Life Financial Analysis: Differences in Estimated Lives within a Single Industry
Alternative Depreciation Methods
Financial Analysis: Impact of Alternative Depreciation Methods Self-Study Quiz Financial Analysis: Increased Profitability Due to an Accounting Adjustment? Reading the Notes
How Managers Choose
International Perspective: Depreciation Methods in Other Countries
Measuring Asset Impairment
A Question of Ethics: Fierce Pressure to Report Smooth, Ever-Higher Earnings
Disposal of Plant and Equipment < [There was a query about this head]
Self-Study Quiz Financial Analysis: Taking a Different Strategy to Success
Natural Resources and Intangible Assets
Acquisition and Depletion of Natural Resources
Acquisition and Amortization of Intangible Assets
Focus on Cash Flows: Productive Assets and Depreciation Financial Analysis: A Misinterpretation
Demonstration Case
Chapter Supplement A: Changes in Depreciation Estimates
Self-Study Quiz
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Nine - Reporting and Interpreting Liabilities General Mills
Understanding the Business
Liabilities Defined and Classified
Key Ratio Analysis: Current Ratio
Current Liabilities
Accounts Payable
Key Ratio Analysis: Accounts Payable Turnover Ratio
Accrued Liabilities
Notes Payable
Current Portion of Long-Term Debt
Financial Analysis: Refinanced Debt: Current or Noncurrent?
Deferred Revenues
Estimated Liabilities Reported on the Balance Sheet
Estimated Liabilities Reported in the Notes
Working Capital Management
Focus on Cash Flows: Working Capital and Cash Flows Self-Study Quiz
Long-Term Liabilities
Long-Term Notes Payable and Bonds
International Perspective: Borrowing in Foreign Currencies
Lease Liabilities
Present and Future Value Concepts
Future and Present Values of a Single Amount
Self-Study Quiz
Future and Present Values of an Annuity
A Question of Ethics: Truth in Advertising
Accounting Appoications of Future and Present Values
Demonstration Case
Chapter Supplement A: Income Taxes and Retirement Benefits
Chapter Supplement B: Federal Income Tax Concepts
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Ten - Reporting and Interpreting Bonds Harrah's, Inc.
Understanding the Business
Characteristics of Bonds Payable
Key Ratio Analysis: Debt-to-Equity
Reporting Bond Transactions
Financial Analysis: Bond Information from the Business Press Self-Study Quiz
Bonds Issued at Par
Key Ratio Analysis: Times Interest Earned
Bonds Issued at a Discount
Bonds Issued at a Premium
Additional Topics
Effective-Interest Amortization
Financial Analysis: Understanding Alternative Amortization Methods
Early Retirement of Debt
Self-Study Quiz Focus on Cash Flows: Bonds Payable
Demonstration Case
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter 11 - Reporting and Interpreting Owners' Equity Outback Steakhouse
Understanding the Business
Ownership of a Corporation
Authorized, Issued, and Outstanding Shares
Key Ratio Analysis: Earnings per Share (EPS)
Common Stock Transactions
Initial Sale of Stock
Sale of Stock in Secondary Markets
Stock Issued for Noncash Assets or Services
Stock Issued for Employee Compensation
Repurchase of Stock
Self-Study Quiz
Dividends on Common Stock
Key Ratio Analysis: Dividend Yield Financial Analysis: Impact of Dividends on Stock Price Self-Study Quiz
Stock Dividends and Stock Splits
Stock Dividends
Stock Splits
Self-Study Quiz
Preferred Stock
Dividends on Preferred Stock
Financial Analysis: Impact of Dividends in Arrears
Restrictions on Retained Earnings
Focus on Cash Flows: Financing Activities
Demonstration Case
Chapter Supplement A: Accounting for Owners' Equity for Sole Proprietorships and Partnerships
Chapter Take-Aways
Key Ratios
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter 12 - Reporting and Interpreting Investments in Other Corporations Dow Jones and Co., Inc.
Understanding the Business
Types of Investments and Accounting Methods
Passive Investments in Debt
Passive Investments in Stock
Investments in Stock for Significant Influence
Investments in Stock for Control
Debt Held to Maturity: Amortized Cost Method
Bond Purchases
Interest Earned
Principal at Maturity
Passive Stock Investments: The Market Value Method
Classifying Passive Stock Investments
Securities Available for Sale
Comparing Trading Available-for-Sale Securities
Financial Analysis: Equity Securities and Earnings Management Self-Study Quiz
Investments for Significant Influence: Equity Method
Recording Investments under the Equity Method
Reporting Investments under the Equity Method
A Question of Ethics: Improper Influence Self-Study Quiz Financial Analysis: Selecting Accounting Methods for Minority Investments Focus on Cash Flows: Investments
Controlling Interests: Mergers and Acquisitions
What Are Consolidated Statements?
Recording a Merger
Reporting a Merger
Financial Analysis: Accounting for Goodwill Key Ratio Analysis: Return on Assets (ROA) Self-Study Quiz
Demonstration Case A
Demonstration Case B
Demonstration Case C
Demonstration Case D
Chapter Supplement A: Preparing Consolidated Statements
Demonstration Case E
Chapter Take-Aways
Key Ratio
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Thirteen - Statement of Cash Flows Boston Beer Company
Understanding the Business
Classifications of the Statement of Cash Flows
Cash Flows from Operating Activities
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Net Increase (Decrease) in Cash
Self-Study Quiz
Relationships to the Balance Sheet and Income Statement
Reporting and Interpreting Cash Flows from Operating Activities
Part A: Reporting Cash Flows from Operating Activities--Indirect Method
International Perspective: Foreign Currency and the Cash Flow Statement
Foreign Currency and the Cash Flow Statement
Self-Study Quiz
Part B: Reporting Cash Flows from Operating Activities--Direct Method
International Perspective: Australian Practices Self-Study Quiz
Interpreting Cash Flow from Operations
Key Ratio Analysis:Quality of Income Ratio A Question of Ethics: Fraud and Cash Flows from Operations
Reporting and Interpreting Cash Flows from Investing Activities
Reporting Cash Flows from Investing Activities
Interpreting Cash Flow from Investing Activities
Key Ratio Analysis: Capital Acquisitions Ratio Financial Analysis: Free Cash Flow
Reporting and Interpreting Cash Flows from Financing Activities
Reporting Cash Flows from Financing Activities
Interpreting Cash Flow from Financing Activities
Self-Study Quiz
Additional Cash Flow Disclosures
Noncash Investing and Financing Activities
Supplemental Cash Flow Information
Epilogue
Demonstration Case
Chapter Supplement A: Adjustment and Gains and Losses
Chapter Supplement B: Spreadheet Approach--Statement of Cash Flows: Indirect Method
Chapter Take-Aways
Key Ratios
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Chapter Fourteen - Analyzing Financial Statements Home Depot
Understanding the Business
The Investment Decision
Understanding a Company's Strategy
Financial Statement Analysis
Ratio and Percentage Analysis
Component Percentages
Tests of Profitability
1. Return on Equity (ROE)
2. Return on Assets (ROA)
3. Financial Leverage Percentage
4. Earnings per Share (EPS)
5. Quality of Income
6. Profit Margin
7. Fixed Asset Turnover Ratio
Self-Study Quiz
Tests of Liquidity
8.Cash Ratio
9.Current Ratio
10. Quick Ratio (Acid Test)
11. Receivable Turnover
12. Inventory Turnover
Self-Study Quiz
Tests of Solvency
13. Times Interest Earned Ratio
14. Cash Coverage Ratio
15. Debt-to-Equity Ratio
Market Tests
16. Price/Earnings (P/E) Ratio
17. Dividend Yield
Self-Study Quiz
Interpreting Ratios and Other Analytical Considerations
Other Financial Information
A Question of Ethics: Insider Information
Information in an Efficient Market
Chapter Take-Aways
Finding Financial Information
Key Terms
Questions
Multiple Choice
Mini-Exercises
Exercises
Problems
Alternate Problems
Cases and Projects
Appendix A: Present and Future Value Tables
Appendix B: American Eagle Outfitters Annual Report
Appendix C: Abercrombie and Fitch Annual Report
Appendix D: Industry Ratio Report
Glossary
Illustration Credits
Index
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2004 McGraw-Hill Higher Education