Financial Accounting. 2nd Edition

Transcription

1 Brochure More information from Financial Accounting. 2nd Edition Description: company websitefinancial Accounting provides a very accessible and easy-to-follow introduction to the subject. It is intended as a core textbook for students studying financial accounting for the first time: either those following an undergraduate degree in a business school, or non-business studies students studying a financial accounting course. This includes students on both accounting and non-accounting degrees and also MBA students. It provides a self-contained, introductory, one semester course covering the major aspects of financial accounting. The book is also designed so that students can progress to more advanced follow-up courses so is well suited as an introduction for mainstream accounting graduates or MBA students as a basic text. It should be particularly useful in reinforcing the fundamental theory and practice of introductory financial accounting. Contents: About the Author xiii About the Book xv Acknowledgements xxi 1 INTRODUCTION TO ACCOUNTING 1 Introduction 2 Nature of Accounting 2 Importance of Accounting 4 Financial Accounting and Management Accounting 5 Users of Accounts 6 Accounting Context 8 Types of Accountancy 12 Types of Accountant 15 Limitations of Accounting 18 Conclusion 18 Discussion Questions 20 SECTION A: FINANCIAL ACCOUNTING: THE TECHNIQUES 21 2 THE ACCOUNTING BACKGROUND 23 Introduction 24 Financial Accounting 24 Language of Accounting 26 Student Example 34 Why Is Financial Accounting Important? 38

2 Accounting Principles 38 Accounting Conventions 39 Conclusion 41 Discussion Questions 42 Numerical Questions 43 Appendix 2.1: Illustration of a Consolidated Income Statement for Marks & Spencer plc Appendix 2.2: Illustration of a Consolidated Statement of Financial Position for Marks and Spencer plc Appendix 2.3: Illustration of a Consolidated Statement of Cash Flows for Marks and Spencer plc Appendix 2.4: Illustration of a Consolidated Income Statement for Volkswagen Appendix 2.5: Illustration of a Consolidated Balance Sheet (Statement of Financial Position) for Volkswagen Appendix 2.6: Illustration of a Consolidated Cash Flow Statement (Statement of Cash Flows) for Volkswagen RECORDING: DOUBLE-ENTRY BOOKKEEPING 55 Introduction 56 The Accounting Equation 57 Worked Example 62 Day Books and Ledgers 74 Computers 78 Conclusion 79 Discussion Questions 79 Numerical Questions 80 Appendix 3.1: Complete Worked Example for Gavin Stevens 86 4 MAIN FINANCIAL STATEMENTS: THE INCOME STATEMENT (PROFIT AND LOSS ACCOUNT) 89 Introduction 90 Context 90 Definitions 92 Layout 93 Main Components 94 Profit 103 Listed Companies 106

3 Capital and Revenue Expenditure 106 Limitations 107 Interpretation 107 Conclusion 107 Discussion Questions 108 Numerical Questions MAIN FINANCIAL STATEMENTS: THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) 110 Introduction 111 Context 112 Definitions 113 Layout 114 Main Components 116 Limitations 129 Interpretation 131 Listed Companies 131 Conclusion 132 Discussion Questions 132 Numerical Questions 133 Appendix 5.1: Horizontal Format of Statement of Financial Position PREPARING THE FINANCIAL STATEMENTS 135 Introduction 136 Main Financial Statements 136 Trial Balance to the Income Statement (Profi t and Loss Account) and the Statement of Financial Position (Balance Sheet) 138 Adjustments to Trial Balance 142 Comprehensive Example 154 Conclusion 158 Discussion Questions 158 Numerical Questions PARTNERSHIPS AND LIMITED COMPANIES 172 Introduction 173 Context 174

4 Partnerships 175 Limited Companies 181 Distinctive Accounting Features of Limited Companies 185 Accounting Treatment For Limited Companies 194 Limited Company Example: Stevens, Turner Ltd 196 Limited Companies: Published Accounts 201 Conclusion 206 Discussion Questions 207 Numerical Questions 208 Appendix 7.1: Example of an Income Statement (Profit and Loss Account) using UK GAAP (Manchester United Ltd) 218 Appendix 7.2: Example of a Statement of Financial Position (Balance Sheet) using UK GAAP (Manchester United Ltd) MAIN FINANCIAL STATEMENT: THE STATEMENT OF CASH FLOWS 221 Introduction 222 Importance of Cash 223 Context 225 Cash and the Bank Account 225 Relationship between Cash and Profit 229 Preparation of Statement of Cash Flows 231 Bank Reconciliation Statements 245 Conclusion 246 Discussion Questions 247 Numerical Questions 248 Appendix 8.1: Main Headings for the Cash Flow Statement (Statement of Cash Flows) for Sole Traders, Partnerships and some Non-Listed Companies under UK GAAP 255 Appendix 8.2: Preparation of a Sole Trader s Cash Flow Statement Using the Direct Method Using UK Format 256 Appendix 8.3: Preparation of the Cash Flow Statement of Any Company Ltd using the Indirect Method Using UK GAAP 257 Appendix 8.4: Example of Statement of Cash Flows (Cash Flow Statement) Using UK GAAP (Manchester United Ltd) INTERPRETATION OF ACCOUNTS 262 Introduction 263 Context 263

5 Overview 264 Importance of Ratios 266 Closer Look at Main Ratios 267 Worked Example 279 Report Format 287 Holistic View of Ratios 289 Performance Indicators 290 Limitations 291 Conclusion 292 Discussion Questions 293 Numerical Questions 294 Appendix 9.1: John Brown Plc 303 Appendix 9.2: The Cash Flow Ratio using UK GAAP 305 SECTION B: FINANCIAL ACCOUNTING: THE CONTEXT REGULATORY AND CONCEPTUAL FRAMEWORKS 309 Introduction 310 Traditional Corporate Model: Directors, Auditors and Shareholders 311 Regulatory Framework 316 Regulatory Framework in the UK 318 Corporate Governance 323 Conceptual Framework 328 Conclusion 335 Selected Reading 336 Discussion Questions MEASUREMENT SYSTEMS 338 Introduction 339 Overview 339 Measurement Systems 342 Deficiencies of Historical Cost Accounting 344 Illustrative Example of Different Measurement Systems 344 Real Life 347

6 Conclusion 348 Selected Reading 348 Discussion Questions THE ANNUAL REPORT 350 Introduction 351 Definition 351 Context 352 Multiple Roles 353 Main Contents of the Annual Report 358 Presentation 375 Group Accounts 377 Impression Management 381 Conclusion 384 Selected Reading 385 Discussion Questions CREATIVE ACCOUNTING 387 Introduction 388 Definition 390 Managerial Motivation 392 Methods of Creative Accounting 394 Example 401 Real Life 401 Case Studies 404 Creative Presentation 408 Controlling Creative Accounting 410 Conclusion 410 Selected Reading 411 Discussion Questions 412 Numerical Questions INTERNATIONAL ACCOUNTING 414 Introduction 415 Context 415

7 Divergent Forces 417 Classification 423 Country Snapshots 423 Convergent Forces 430 Conclusion 437 Selected Reading 437 Discussion Questions 438 Appendix 14.1: List of International Standards 439 Glossary of Key Accounting Terms 441 Appendix: Answers 465 Index 511 Ordering: Order Online - Order by Fax - using the form below Order by Post - print the order form below and send to Research and Markets, Guinness Centre, Taylors Lane, Dublin 8, Ireland.

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