Financial Accounting OLP with eText, Global Edition

1. Business, Accounting, and You

Business, Accounting, and You

What Is a Business, and Why Study Accounting?

The Definition of a Business

The General Concept of Value

Business Owners and Other Stakeholders

The Goal of a Business

How Does a Business Operate?

Resources Needed to Start and Operate a Business

Operating the Business

The Cost of Money

How Are Businesses Organized?

The Types of Businesses

The Legal Forms of Businesses

What Is Accounting, and What Are the Key AccountingPrinciples and Concepts?

Generally Accepted Accounting Principles

International Financial Reporting Standards

The Business Entity Principle

The Reliability (Objectivity) Principle

The Cost Principle

Accounting Ethics: A Matter of Trust

What Is the Role of Accounting in a Business?

How Do You Recognize a Business Transaction?

Cash Accounting

Accrual Accounting

How Do You Measure a Business Transaction?

How Do You Record Business Transactions Using the Accounting Equation?

Transaction Analysis

Stockholders' Equity

How Do You Report Business Transactions Using Financial Statements?

The Income Statement

The Statement of Retained Earnings

The Balance Sheet

The Statement of Cash Flows

Relationships Among the Financial Statements

Accounting, Business, and You-Putting It All Together

Summary

Accounting Practice

Apply Your Knowledge

Know Your Business



2. Analyzing and Recording Business Transactions

Business, Accounting, and You

How Are Accounts Used to Keep Business Transactions Organized?

Organizing Accounts

Assets

Liabilities

Stockholders' Equity

What Is Double-Entry Accounting?

Normal Balance

How Are the General Journal and General Ledger Used to Keep Track of Business Transactions?

Transaction Analysis

Applying Transaction Analysis

Balancing the T-Accounts

How Is a Trial Balance Prepared, and What Is It Used For?

Correcting Errors

Preparation of Financial Statements

Summary

Accounting Practice

Apply Your Knowledge

Know Your Business



3. Adjusting and Closing Entries

Business, Accounting, and You

How Does a Company Accurately Report Its Income?

Revenue Recognition and Matching Principles 1

What Is the Role of Adjusting Entries, and When Are They Prepared?

Accruing Revenues

Accruing Expenses

Adjusting Deferred Revenues

Adjusting Deferred Expenses

How Are Financial Statements Prepared from an Adjusted Trial Balance?

The Adjusted Trial Balance

Preparing the Financial Statements

How Does a Company Prepare for a New Accounting Period?

Completing the Accounting Cycle

The Three Closing Entries: Revenues, Expenses, and Dividends

Post-Closing Trial Balance

Summary of the Adjusting and Closing Processes

Summary

Accounting Practice

Apply Your Knowledge

Know Your Business

Comprehensive Problem



4. Accounting for a Merchandising Business

Business, Accounting, and You

What Are the Relationships Among Manufacturers, Wholesalers, Retailers, and Customers?

How Do Periodic and Perpetual Inventory Systems Differ?

How Do You Account for the Purchase of Inventory?

Cash and Credit Purchases

Purchase Returns and Allowances

Purchase Discounts

How Do You Account for the Sale of Inventory?

Cash Sales

Credit Sales

Sales Returns and Allowances

Sales Returns

Sales Allowances

Sales Discounts

How Do You Account for Freight Charges and Ot