Accounting Principles

This engaging book lays the foundation for readers to succeed on the CPA exam and ultimately in their professional practice. The new edition continues to reflect the conversational style and clarity that has made this a leader in the market. It explores the key concepts and principles while using the PepsiCo financial statement to clearly show how the information is applied in the real world. The book has also been updated with the latest data as to reflect today's business environment.

Table of Contents:
1 Accounting in Action.What Is Accounting?The Building Blocks of Accounting. The Basic Accounting Equation.Using the Basic Accounting Equation.Financial Statements.All About You: ETHICS: MANAGING PERSONAL FINANCIAL REPORTING.APPENDIX: Accounting Career Opportunities.2 The Recording Process.The Account.Steps in the Recording Process.The Recording Process Illustrated. The Trial Balance.All About You: YOUR PERSONAL ANNUAL REPORT.3 Adjusting the Accounts.Timing Issues.The Basics of Adjusting Entries. The Adjusted Trial Balance and Financial Statements. APPENDIX: Alternative Treatment of Prepaid Expenses and Unearned Revenues.4 Completing the Accounting Cycle.Using a Worksheet.Closing the Books.Summary of the Accounting Cycle. Classified Balance Sheet.Long-Term Investments.All About You: YOUR PERSONAL BALANCE SHEET.APPENDIX: Reversing Entries.5 Accounting for Merchandising Operations.Merchandising Operations.Recording Purchases of Merchandise.Recording Sales of Merchandise. Completing the Accounting Cycle.All About You: WHEN IS A SALE A SALE?Determining Cost of Goods Sold Under a Periodic System.APPENDIX 5A: Periodic Inventory System.APPENDIX 5B: Worksheet for a Merchandising Company.6 Inventories.Classifying Inventory.Determining Inventory Quantities.Inventory Costing.Inventory Errors.Statement Presentation and Analysis.All About You: EMPLOYEE THEFT-AN INSIDE JOB.APPENDIX 6A: Inventory Cost Flow Methods in Perpetual Inventory Systems.APPENDIX 6B: Estimating Inventories.7 Accounting Information Systems.Basic Concepts of Accounting Information Systems.Computerized Accounting Systems.Manual Accounting Systems. Special Journals.All About You: KEEPING TRACK OF THE DOCUMENTS IN YOUR LIFE.8 Internal Control and Cash.Internal Control.Cash Controls.Use of a Bank. Reporting Cash.9 Accounting for Receivables.Types of Receivables. Accounts Receivable.Notes Receivable.Statement Presentation and Analysis. All About You: SHOULD YOU BE CARRYING PLASTIC?10 Plant Assets, Natural Resources, and Intangible Assets.SECTION 1 Plant Assets.Determining the Cost of Plant Assets.Depreciation.Expenditures During Useful Life. Plant Asset Disposals.SECTION 2 Natural Resources.SECTION 3 Intangible Assets.Accounting for Intangible Assets.Research and Development Costs.Statement Presentation and Analysis.All About You: BUYING A WRECK OF YOUR OWN.APPENDIX: Exchange of Plant Assets.11 Current Liabilities and Payroll Accounting.Accounting for Current Liabilities.Contingent Liabilities.Payroll Accounting.All About You: YOUR BOSS WANTS TO KNOW IF YOU JOGGED TODAY. APPENDIX: Additional Fringe Benefits.12 Accounting for Partnerships.Partnership Form of Organization.Basic Partnership Accounting.Liquidation of a Partnership. All About You: HOW WELL DO YOU KNOW YOUR PARTNER?APPENDIX: Admission and Withdrawal of Partners.13 Corporations: Organization and Capital Stock Transactions.The Corporate Form of Organization.Accounting for Common Stock Issues.Accounting for Treasury Stock.Preferred Stock. Statement Presentation and Analysis.All About You: HOME-EQUITY LOANS.14 Corporations: Dividends, Retained Earnings, and Income Reporting.Dividends.Retained Earnings.All About You: CORPORATIONS HAVE GOVERNANCE STRUCTURES-DO YOU?15 Long-Term Liabilities.Bond Basics.Accounting for Bond Issues. Accounting for Bond Retirements. Accounting for Other Long-Term Liabilities. Statement Presentation and Analysis.All About You: THE RISKS OF ADJUSTABLE RATES.APPENDIX 15A: Present Value Concepts Related to Bond Pricing.APPENDIX 15B: Effective-Interest Method of Bond Amortization.APPENDIX 15C: Straight-Line Amortization.16 Investments.Why Corporations Invest.Accounting for Debt Investments.Accounting for Stock Investments.Valuing and Reporting Investments.All About You: A GOOD DAY TO START SAVING.17 The Statement of Cash Flows.The Statement of Cash Flows: Usefulness and Format.SECTION 1 Preparing the Statement of Cash.Flows-Indirect Method.Step 1: Operating Activities.Summary of Conversion to Net Cash Provided by Operating Activities-Indirect Method.Step 2: Investing and Financing Activities.Step 3: Net Change in Cash.Using Cash Flows to Evaluate a Company.All About You: WHERE DOES THE MONEY GO?APPENDIX 17A: Using a Work Sheet to Prepare the Statement of Cash Flows-Indirect Method.APPENDIX 17B: Statement of Cash Flows-Direct Method.18 Financial Statement Analysis.Basics of Financial Statement Analysis.Horizontal Analysis.Vertical Analysis. Ratio Analysis. Earning Power and Irregular Items. Quality of Earnings.All About You: SHOULD I PLAY THE MARKET YET?19 Managerial Accounting.Managerial Accounting Basics.Managerial Cost Concepts.Manufacturing Costs in Financial Statements.Managerial Accounting Today. All About You: OUTSOURCING AND JOBS.20 Job Order Cost Accounting.Cost Accounting Systems.Job Order Cost Flow.Reporting Job Cost Data.Under- or Overapplied Manufacturing Overhead.All About You: MINDING YOUR OWN BUSINESS.21 Process Cost Accounting.The Nature of Process Cost Systems.Equivalent Units.Comprehensive Example of Process Costing.Contemporary Developments. All About You: WAL-MART IS ON THE PHONE.APPENDIX: Example of Traditional Costing versus Activity-Based Costing.22 Cost-Volume-Profit. Cost Behavior Analysis.Cost-Volume-Profit Analysis.All About You: A HYBRID DILEMMA.APPENDIX: Variable Costing.23 Budgetary Planning.Budgeting Basics.Preparing the Operating Budgets.Direct Labor Budget.Preparing the Financial Budgets.Budgeting in Non-Manufacturing Companies. All About You: AVOIDING PERSONAL FINANCIAL DISASTER.24 Budgetary Control and Responsibility Accounting.The Concept of Budgetary Control.Static Budget Reports.Flexible Budgets. The Concept of Responsibility Accounting.Types of Responsibility Centers. All About You: BUDGETING FOR HOUSING COSTS. 25 Standard Costs and Balanced Scorecard.The Need for Standards.Setting Standard Costs-A Difficult Task. Analyzing and Reporting Variances from Standards.Balanced Scorecard.All About You: BALANCING COSTS AND QUALITY IN HEALTH CARE.APPENDIX: Standard Cost Accounting System.26 Incremental Analysis and Capital Budgeting. SECTION 1 Incremental Analysis.Management's Decision-Making Process.Types of Incremental Analysis.SECTION 2 Capital Budgeting.Evaluation Process.Annual Rate of Return.Cash Payback.Discounted Cash Flow.All About You: WHAT IS A DEGREE WORTH?APPENDIX A: Specimen Financial Statements: PepsiCo, Inc.APPENDIX B: Specimen Financial Statements: The Coca-Cola Company.APPENDIX C: Present Value Concepts.APPENDIX D: Using Financial Calculators.APPENDIX E: Standards of Ethical Conduct for Management Accountants. IMA Statement of Ethical Professional Practice.Principles.Standards.Resolution of Ethical Conflict.Photo Credits.Company Index.Subject Index.

About the Author :
Jerry J. Weygandt, PhD, CPA, is Arthur Andersen Alumni Professor of Accounting at the University of Wisconsin-Madison. He holds a Ph.D. in accounting from the University of Illinois. Articles by Professor Weygandt have appeared in the Accounting Review, Journal of Accounting Research, Accounting Horizons, Journal of Accountancy, and other academic and professional journals. These articles have examined such financial reporting issues as accounting for price-level adjustments, pensions, convertible securities, stock option contracts, and interim reports. Professor Weygandt is author of other accounting and financial reporting books and is a member of the American Accounting Association, the American Institute of Certified Public Accountants, and the Wisconsin Society of Certified Public Accountants. He has served on numerous committees of the American Accounting Association and as a member of the editorial board of the Accounting Review; he also has served as President and Secretary-Treasurer of the American Accounting Association. He is the recipient of the Wisconsin Institute of CPAs Outstanding Educator's Award and the Lifetime Achievement Award. In 2001 he received the American Accounting Association's Outstanding Accounting Educator Award. Donald E. Kieso, PhD, CPA, received his bachelor's degree from Aurora University and his doctorate in accounting from the University of Illinois. He has served as chairman of the Department of Accountancy and is currently KPMG Emeritus Professor of Accountancy at Northern Illinois University. He has public accounting experience with Price Waterhouse & Co. (San Francisco and Chicago) and Arthur Andersen & Co. (Chicago) and research experience with the Research Division of the American Institute of Certified Public Accountants (New York). He has done post-doctorate work as a Visiting Scholar at the University of California at Berkeley and is a recipient of NIU's Teaching Excellence Award and four Golden Apple teaching Awards. Professor Kieso is the author of numerous other accounting and business books and is a member of the American Accounting Association, the American Institute of Certified Public Accountants, and the Illinois CPA Society. He has served as member of the Board of Directors of the Illinois CPA Society, the AACSBs Accounting Accreditation Committees, the State of Illinois Comptroller's Commission, as Secretary-Treasurer of the Federation of Schools of Accountancy. Paul D. Kimmel, PhD, CPA, received his bachelor's degree from the University of Minnesota and his doctorate in accounting from the University of Wisconsin. He is an Associate Professor at the University of Wisconsin -Milwaukee, and has public accounting experience with Deloitte & Touche (Minneapolis). He was the recipient of the UWM School of Business Advisory Council Teaching Award and the Reggie Taite Excellence in Teaching Award, and is a three-time winner of the Outstanding Teaching Assisting Award at the University of Wisconsin. He is also a recipient of the Elijah Watts Sells Award for Honorary Distinction for his results on the CPA exam. He is a member of the American Accounting Association and has published articles in Accounting Review, Accounting Horizons, Advances in Management Accounting, Managerial Finance, Issues in Accounting Education, Journal of Accounting Education, as well as other journals. His research interests include accounting for financial instruments and innovation in accounting education. He has published papers and given numerous talks on incorporating critical thinking into accounting education, and helped prepare a catalog of critical thinking resources for the Federated Schools of Accountancy.