Accounting: A Business Planning and Control Approach

Wiley is proud to introduce a brand new resource from Australia’s leading Accounting author Jacqueline Birt – Accounting: A Business Planning and Control Approach. This first edition is unique in its focus on taking a business planning approach to accounting. Delivered as a Wiley interactive E-Text powered by VitalSource, this rich digital resource is designed to engage students and bring accounting concepts to life. Give your students the best of Birt, enhanced through an interactive textbook for a superior learning experience – all for much less than the price of a print textbook.

Table of Contents:
About the authors ix chapter 1 Introduction to accounting and business decision making 1 1.1 The accounting process 2 1.2 Accounting information and its role in decision making 4 1.3 Financial accounting and management accounting 6 1.4 Role of accounting information in business planning 8 1.5 Globalisation of accounting 10 1.6 Sources of company regulation 10 1.7 Australian and international accounting standards 14 1.8 Role of the Conceptual Framework 17 1.9 Limitations of accounting information 21 1.10 Careers in accounting 23 chapter 2 Business structures 33 2.1 Forms of business entities 34 2.2 Definition and features of a sole trader 35 2.3 Advantages and disadvantages of a sole trader 36 2.4 Definition and features of a partnership 38 2.5 Advantages and disadvantages of a partnership 38 2.6 Definition and features of a company 40 2.7 Types of companies 41 2.8 Advantages and disadvantages of a company 44 2.9 Definition and features of a trust 45 2.10 Advantages and disadvantages of a trust 45 2.11 Comparison of business reports 47 2.12 Differential reporting 53 chapter 3 Business planning and performance measurement 68 3.1 What is a business plan? 69 3.2 Organisational performance measurement 75 3.3 Divisional performance measurement 81 3.4 Investment centre performance evaluation 86 3.5 Preparing the document: the business planning process 92 chapter 4 Budgeting 116 4.1 Strategic planning and budgeting 117 4.2 Budgets 119 4.3 Types of budgets 121 4.4 Master budget 122 4.5 The cash budget 129 4.6 Budgets: planning and control 132 4.7 Behavioural aspects of budgeting 134 chapter 5 Cost–volume–profit analysis 154 5.1 Cost behaviour 155 5.2 Break-even analysis 158 5.3 Contribution margin ratio 165 5.4 CVP assumptions 166 5.5 Using break-even data 166 5.6 Operating leverage 167 5.7 Contribution margin per limiting factor 169 5.8 Relevant information for decision making 170 5.9 Outsourcing decisions 171 5.10 Special order decisions 174 chapter 6 Costing and pricing in an entity 196 6.1 Use of cost information 197 6.2 Direct costs 198 6.3 Cost allocation 200 6.4 Allocation process 204 6.5 Inventoriable product cost 212 6.6 Pricing of products and services 217 chapter 7 Capital investment 234 7.1 The nature and scope of investment decisions 235 7.2 Accounting rate of return 239 7.3 Payback period 240 7.4 Net present value 241 7.5 Internal rate of return 247 7.6 Practical issues in making decisions 250 chapter 8 Financing the business 264 8.1 Managing net working capital 265 8.2 Managing cash 267 8.3 Managing accounts receivable 269 8.4 Managing inventories 272 8.5 Sources of short-term finance 275 8.6 Sources of long-term debt finance 280 8.7 Equity finance 283 8.8 Hybrid finance 285 8.9 International sources of funding 286 chapter 9 Business transactions 296 9.1 Recognising business transactions 297 9.2 Business and personal transactions and business events 298 9.3 The accounting equation 299 9.4 Analysis of business transactions 300 9.5 The accounting worksheet 302 9.6 Capturing accounting information: journals and ledger accounts 305 9.7 Rules of debit and credit 307 9.8 The trial balance 309 9.9 Accounting errors 310 chapter 10 Balance sheet 328 10.1 Financial reporting obligations 329 10.2 Nature and purpose of the balance sheet 331 10.3 Accounting policy choices, estimates and judgements 335 10.4 The definition of assets 337 10.5 The definition of liabilities 339 10.6 The definition and nature of equity 340 10.7 Assets, liabilities and equity 341 10.8 Format and presentation of the balance sheet 342 10.9 Presentation and disclosure of elements on the balance sheet 345 10.10 Measurement of various assets and liabilities 357 10.11 Potential limitations of the balance sheet 365 chapter 11 Statement of profit or loss and statement of changes in equity 388 11.1 Purpose and importance of measuring financial performance 389 11.2 Accounting concepts for financial reporting 391 11.3 Effect of accounting policy choices, estimates and judgements on financial statements 396 11.4 Measuring financial performance 400 11.5 Income 400 11.6 Expenses 401 11.7 Applying recognition criteria to income and expenses 403 11.8 Presenting the statement of profit or loss 407 11.9 Financial performance measures 411 11.10 The statement of comprehensive income 413 11.11 The link between the financial statements 416 chapter 12 Statement of cash flows 437 12.1 The purpose and usefulness of a statement of cash flows 438 12.2 Format of the statement of cash flows 451 12.3 Preparing the statement of cash flows 456 12.4 Analysing the statement of cash flows 465 chapter 13 Analysis and interpretation of financial statements 491 13.1 Users and decision making 492 13.2 Nature and purpose of financial analysis 494 13.3 Analytical methods 494 13.4 Profitability analysis 504 13.5 Asset efficiency analysis 509 13.6 Liquidity analysis 513 13.7 Capital structure analysis 515 13.8 Market performance analysis 518 13.9 Ratio interrelationships 521 13.10 Limitations of ratio analysis 523 chapter 14 Accounting in society 554 14.1 Business sustainability, drivers, principles and theories 555 14.2 Reporting and disclosure 559 14.3 Corporate governance 563 14.4 Corporate governance principles, guidelines and practices 565 14.5 Ethics in business 566 14.6 Professional codes of ethics and ethical decision-making methods 571 Appendix 598