Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 1

The Role of Accounting in Business 2

The Nature of a Business 4

Types of Businesses 4, Forms of Business 5, How Do

Businesses Make Money? 6, Business Stakeholders 8

Business Activities 10

Financing Activities 10, Investing Activities 12, Operating

Activities 12

What is Accounting and Its Role in Business? 13

Financial Statements 14

Income Statement 15, Retained Earnings Statement 16,

Balance Sheet 16, Statement of Cash Flows 18, Integrated

Financial Statements 19

Accounting Concepts 20

Business Entity Concept 21, Cost Concept 22, Going

Concern Concept 22, Matching Concept 22, Objectivity

Concept 22, Unit of Measure Concept 23, Adequate

Disclosure Concept 23, Accounting Period Concept 23,

Responsible Reporting 23

Horizontal Analysis 26

Summary of Learning Goals 27

Glossary 27

Chapter 2

Basic Accounting Concepts 52

Elements of an Accounting System 54

Rules 54, Framework 54, Controls 55

Recording a Corporation’s First Period of Operations 56

Financial Statements for a Corporation’s First Period of

Operations 62

Income Statement 64, Retained Earnings Statement 64,

Balance Sheet 65, Statement of Cash Flows 65, Integration

of Financial Statements 65

Recording a Corporation’s Second Period of Operations 65

Financial Statements for a Corporation’s Second Period of

Operation 66

Vertical Analysis 69

Summary of Learning Goals 71

Glossary 71

Chapter 3

Accrual Accounting Concepts 96

Basic Accrual Accounting Concepts Including the Matching

Concept 98

Using Accrual Concepts of Accounting for Family Health

Care’s November Transactions 99

The Adjustment Process 105

Deferrals and Accruals 105, Adjustments for Family Health

Care 107

Financial Statements 110

Income Statement 110, Retained Earnings Statement 113,

Balance Sheet 113, Statement of Cash Flows 115,

Integration of Financial Statements 115

Accrual and Cash Bases of Accounting 116

Using the Cash Basis of Accounting 117, Using the Accrual

Basis of Accounting 117, Summary of Differences between

the Cash and Accrual Bases of Accounting 117, Family

Health Care Under the Cash and Accrual Bases of

Accounting 118, Importance of Accrual Basis of

Accounting 118

The Accounting Cycle 119

Common-Sized Financial Statements 120

Appendix: Reconciliation: Net Cash Flows from Operations

and Net Income 121

Summary of Learning Goals 123

Glossary 124

Chapter 4

Accounting Information Systems 150

Business Information Systems 152

Basic Accounting Systems 153

Contents