Cornerstones of Financial & Managerial Accounting: Current Trends Update PDF
Preview Cornerstones of Financial & Managerial Accounting: Current Trends Update
C O R N E R S T O N E S of Financial & Managerial Accounting Current Trends Update Jay S. Rich Illinois State University ▲ Jefferson P. Jones Auburn University ▲ Dan L. Heitger Miami University ▲ Maryanne M. Mowen Oklahoma State University ▲ Don R. Hansen Oklahoma State University CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd ii 55//1188//0099 55::2222::1199 PPMM CornerstonesofFinancial&Managerial #2010South-Western,apartofCengageLearning Accounting—CurrentTrendsUpdate ALLRIGHTSRESERVED.Nopartofthisworkcoveredbythecopyrighthereonmay bereproducedorusedinanyformorbyanymeans—graphic,electronic,or JayS.Rich,JeffersonP.Jones,DanL.Heitger, mechanical,includingphotocopying,recording,taping,Webdistribution, MaryanneM.Mowen,DonR.Hansen informationstorageandretrievalsystems,orinanyothermanner—exceptasmay bepermittedbythelicensetermsherein. 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SeniorContentProjectManager:TimBailey LibraryofCongressControlNumber:2009927873 ProductionTechnologyAnalyst:EmilyGross StudentEdition: DirectorofProgramManagement: ISBN-13:978-0-538-75129-2 JohnBarans ISBN-10:0-538-75129-0 SeniorMediaEditor:ScottFidler South-WesternCengageLearning 5191NatorpBoulevard SeniorManufacturingBuyer:DougWilke Mason,OH45040 USA ProductionService:LEAPPublishingServices, Inc. CengageLearningproductsarerepresentedinCanadaby NelsonEducation,Ltd. Compositor:KnowledgeworksGlobal,Limited Foryourcourseandlearningsolutions,visitwww.cengage.com ArtDirector:StacyJenkinsShirley Purchaseanyofourproductsatyourlocalcollegestoreorat ourpreferredonlinestorewww.ichapters.com CoverandInternalDesigner:JoeDevine, RedHangarDesign (cid:2) CoverImage: R Corbis/RogerRessmeyer PrintedinCanada 12345671312111009 “This book is dedicated to our students—past, present, and future—who are at the heart of our passion for teaching.” CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd iiiiii 55//1188//0099 55::2222::2233 PPMM Brief Contents CHAPTER 1 Accounting and the CHAPTER18 Activity-BasedCosting Financial Statements 2 andManagement 960 CHAPTER 2 The Accounting CHAPTER19 ProfitPlanning 1018 Information System 56 CHAPTER20 StandardCosting:A CHAPTER 3 Accrual Accounting 112 ManagerialControlTool 1066 MAKINGTHECONNECTION 1108 CHAPTER 4 Internal Control and Cash 176 CHAPTER21 FlexibleBudgetsand CHAPTER 5 Sales and Receivables 232 OverheadAnalysis 1110 CHAPTER 6 Cost of Goods Sold CHAPTER22 PerformanceEvaluation, and Inventory 280 VariableCosting,and Decentralization 1156 CHAPTER 7 Operating Assets 348 CHAPTER 8 Current and CHAPTER23 Short-RunDecision Contingent Liabilities 400 Making:RelevantCostingand InventoryManagement 1200 CHAPTER 9 Long-Term Liabilities 440 CHAPTER24 CapitalInvestment CHAPTER10 Stockholders’Equity 502 Decisions 1250 MAKINGTHECONNECTION 1290 CHAPTER11 TheStatementof CashFlows 554 APPENDIX1 FinancialStatement CHAPTER12 FinancialStatement Information: Analysis 620 Abercrombie&Fitch 1293 CHAPTER13 ManagerialAccounting APPENDIX2 FinancialStatement ConceptsandDecision- Information:Aeropostale 1299 MakingSupport 702 APPENDIX3 TimeValueofMoney 1305 CHAPTER14 CostBehavior 754 APPENDIX4 InternationalFinancial CHAPTER15 Cost-Volume-Profit ReportingStandards 1329 Analysis:AManagerial APPENDIX5 CurrentTrendsin PlanningTool 802 Accounting 1337 MAKINGTHECONNECTION 850 Glossary 1341 CHAPTER16 Job-OrderCosting 852 CHAPTER17 ProcessCosting 908 Index 1357 iv Preface v vv “CORNERSTONES”— THE PERFECT FOUNDATION FOR SUCCESSFUL LEARNING Carefully crafted from the ground up, the “Cornerstones” in the text help you set up and solve fundamental calculations or procedures. And the “Cornerstones” go beyond simple preparation by focusing on the underlying accounting principle. There is a “Cornerstone” for every major concept in the book, serving as a “How To” guide. When you are able to master the foundations of financial accounting, it is easier to understand how accounting is used for decision-making in the business world. Each “Cornerstone” breaks common problems into systematic parts, providing students with all the information they need to solve a problem. Here, you can see the full process to better understand the source of each number. The Concept section in Chapters 1-12 links the “Cornerstone” to fundamen- tal underlying accounting con- cepts such as the matching principle here. The Information portion of each “Cornerstone” provides the necessary data to arrive at a solution. The Required section of each exhibit provides you with each step that must be solved. The Solution ends each “Cornerstone,” showing the calculations for each of the required steps in the problem. This helps you understand the necessary concepts. Each “Cornerstone” has an online video offering a step-by-step presentation of the Concept, Information, Required, and Solution sections. CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd vv 55//1188//0099 55::2222::2233 PPMM vi Preface vi End-of-Chapter Cornerstone Exercises are often linked to specific ““CCornerstone” features, pro- vviiding a valuable reference aass you complete homework. BBecause the Cornerstone EExxercises are so closely lliinnked to the in-chapter ““CCornerstones,” you quickly bbecome an independent lleearner! BBeeggiinnnniinngg iinn 22000066,, SSoouutthh--WWeesstteerrnn bbeeggaann rreesseeaarrcchhiinngg hhooww accounting students use and read their textbooks. We personally interviewed hundreds of students. Our Conclusions • The primary driver of success in accounting is homework. • Students believe a textbook helps them succeed, but they are using books differently than the previous generation. • Students use books as a source of examples and descriptions to help them complete homework. They may “skim” the text before or after class, but very few read the text from beginning to end. As a result of this research, Cornerstones was fine-tuned to provide you with greater efficiency and more relevance, promising better results. Cornerstones provides you with the confidence to be more independent, allowing you more time to learn additional concepts. The Cornerstones Learning System is based on “I have recently tried the problems in how students learn accounting today. This system Cornerstones and found that the step-by- incorporates the following key features: step examples that are placed within the text • The actual “Cornerstones” within the chapters – helped extremely…I compared the chapters unique to this family of texts! • The “Cornerstones” references within the end-of- in Cornerstones to our textbook and felt that chapter Cornerstones Exercises. • The summary of “Cornerstones” at the end of each Cornerstones was much easier to understand chapter with page references. • Online reinforcement of “Cornerstones” concepts by just reading the chapter.” with videos and demonstrations. —Katie Hogan, Student at University of Cincinnati CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd vvii 55//1188//0099 55::2222::2266 PPMM vii Cornerstones Videos Each “Cornerstone” in the book is accompanied by a short video clip that you may view online or download onto your portable video player. The clips provide clear, step-by-step examples that are consistently pre- sented for today’s visual learners. They walk you through each step of every “Cornerstone.” 70% of instructors who reviewed these videos indicated they would recommend or require students to use them. 80% of students surveyed wanted access to video presentations to help To vieww tthhee CCoorrnneerrssttoonnee VViiddeeooss, vviissiitt tthhee explain the concepts. Cornerstones Companion Website at www.cengage.com/accounting/jones/videos and enter the following password: jonesfinman “The video is excellent for students who prefer a visual presentation of the example and the concepts. It is also useful for students who missed class or don’t remember class. I like this feature very much.” —Professor Ron Lazer, University of Houston Text Website www.cengage.com/accounting/rich Ensure understanding and success with this comprehen- sive, resource-rich support site. It’s everything you need to ensure positive outcomes. The interactive student study center provides interactive quizzes and online tools that encourage learning. CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd vviiii 55//1188//0099 55::2222::2277 PPMM viii Preface vviiiiii ACKNOWLEDGMENTS AND THANKS We would like to thank the following reviewers and focus group participants who helped shape Cornerstones of Financial & Managerial Accounting: Wagdy Abdallah, Seton Hall University Dave Eichelberger, Athens State University Gilda Agacer, Monmouth University Barbara Eide, University of Wisconsin—La Crosse Markus Ahrens, St. Louis Community College—Meramec Susan W. Eldridge, University of Nebraska—Omaha Sheryl J. Alley, Ball State University Kurt Fanning, Grand Valley State University Felix E. Amenkhienan, Radford University Caroline Falconetti, Nassau Community College Janice Ammons, Quinnipiac University Amanda G. Farmer, University of Georgia Keith Atkinson, University of Central Arkansas Jack R. Fay, Pittsburg State University Don Babbitt, St. Louis Community College—Florissant Valley Janice Feingold, Moorpark College Monica Banyi, Oregon State University Linda Flaming, Monmouth University Rick Barnhart, Grand Rapids Community College Michael Foland, Southwestern Illinois College Progyan Basu, University of Maryland Diana R. Franz, University of Toledo D’Arcy Becker, University of Wisconsin—Eau Claire Harlan J. Fuller, Illinois State University Mark Bezik, Idaho State University Mary Ella Gainor, Bryant University Swati Bhandarkar, The University of Georgia Mesfin Genanaw, Houston Community College L. Charles Bokemeier, Michigan State University Lisa Gillespie, Loyola University of Chicago Anna Marie Boulware, St. Charles Community College Alan Glazer, Florida A&M University Linda Bressler, University of Houston—Downtown Carol M. Graham, University of San Francisco Daniel R. Brickner, Eastern Michigan University Lawrence Grasso, Central Connecticut State University Robert Bromley, Central Michigan University Rita Grant, Grand Valley State University Molly Brown, James Madison University Anthony Greig, Purdue University Philip Brown, Harding University Harriette O. Griffin, North Carolina State University Laurie Burney, Mississippi State University Gretchen Guenther, College of St. Rose Marci L. Butterfield, University of Utah Michael J. Gurevitz, Montgomery College Sharon N. Campbell, University of North Alabama Umit Gurun, University of Texas—Dallas Eugene Cardamone, Hudson Valley Community College Jack O. Hall, Jr., Western Kentucky University Joseph M. Catalina, Hudson Valley Community College Betty S. Harper, Middle Tennessee State University Gayle Chaky, Dutchess Community College Cynthia Jackson, Northeastern University Barbara Chaney, University of Montana Robert C. Jinkens, University of Hawaii Chak-Tong Chau, University of Houston—Downtown William Johnstone, Montgomery College Alan Cherry, Loyola Marymount University David Juriga, St. Louis Community College Robert Churchman, Harding University Catherine Katagiri, College of St. Rose Scott Colvin, Naugatuck Valley Community College Anthony Craig Keller, Missouri State University Joan Cook, Milwaukee Area Tech College Ann Galligan Kelley, Providence College Susan Cordes, Johnson County Community College D. Donald Kent, Jr., The College at Brockport John M. Coulter, Western New England College J. Edward Ketz, The Pennsylvania University Sue Counte, St. Louis Community College Raj Kiani, California State University—Northridge John Crawford, Tarrant County College—South John M. Killoran, University of Missouri—St. Louis Patricia E. Creech, Northeastern Oklahoma A&M Dan King, Shoreline Community College Marcia A. Croteau, University of Maryland—Baltimore County Shirly A. Kleiner, Johnson County Community College Jefferson T. Davis, Weber State University Mehmet Kocakulah, University of Southern Indiana Araya Debessay, University of Delaware John Koeplin, University of San Francisco Donna Dietz, North Dakota State University Emil Koren, St. Leo University Cathy Duffy, Carthage College Robert Kravet, Fairfield University CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd vviiiiii 55//1188//0099 55::2222::2299 PPMM ix David W. Krug, Johnson County Community College Joann Segovia, Minnesota State University—Moorhead Tim Krumwiede, Bryant University Randy Serrett, University of Houston—Downtown Marie Kulesza, University of Hartford Shiv S. Sharma, Robert Morris University Wikil Kwak, University of Nebraska at Omaha Karen Shastri, University of Pittsburgh Cathy Xanthaky Larson, Middlesex Community College Lewis Shaw, Suffolk University Douglas A. Larson, Salem State College J. Riley Shaw, The University of Mississippi Janice E. Lawrence, University of Nebraska—Lincoln Robbie Sheffy, Tarrant County College Ron Lazer, University of Houston Ferdinand Siagian, University of Maine Natasha Librizzi, Milwaukee Area Tech College Janine Sickafuse, Allegheny College William Link, University of Missouri—St. Louis Seleshi Sisaye, Duquesne University James M. Lukawitz, University of Memphis Lynn Shuster, Central Pennsylvania College Maria Mari, Miami Dade College Kathleen Simons, Bryant University Dawn W. Massey, Fairfield University Gerald Smith, University of Northern Iowa Lynn Mazzola, Nassau Community College Sheldon R. Smith, Utah Valley State College Debra McGilsky, Central Michigan University Talitha Stark Smith, Auburn University Yaw M. Mensah, Rutgers University Nancy Snow, University of Toledo Paul H. Mihalek, Central Connecticut State University Joanie Sompayrac, University of Tennessee—Chattanooga Jeanne Miller, Cypress College John Stancil, Florida Southern College Chor T. Lau, California State University Los Angeles Vic Stanton, Stanford University Franklin Lowenthal, California State University—East Bay Dennis C. Stovall, Grand Valley State University Keith L. McBee, University of Wisconsin Colleges—Marathon William Talbot, Montgomery College Lawrence Metzger, Loyola University Chicago Mary Tichich, University of Wisconsin—River Falls Julian Lowell Mooney, Georgia Southern University Suzanne Traylor, University at Albany—SUNY Arabian Morgan, Orange Coast College Donald R. Trippeer, SUNY College at Oneonta Barbara Nyden, Missouri State University Nancy Uddin, Monmouth University Marge O’Reilly-Allen, Rider University Joan Van Hise, Fairfield University Pamela Ondeck, University of Pittsburgh at Greensburg John Varga, Orange Coast College John Page, Tulane University Andrea B. Weickgenannt, Northern Kentucky University Judy Peterson, Monmouth College Anne R. Wessely, St. Louis Community College—Meramec Ray Pfeiffer, University of Massachusetts Catherine H. West, University of Massachusetts Catherine Plante, University of New Hampshire Scott White, Lindenwood University Kathy S. Pollock, Indiana University-Purdue Marvin Williams, University of Houston—Downtown University—Ft. Wayne Satina V. Williams, Marist College K. K. Raman, University of North Texas John E. Windler, University of Nebraska at Omaha Robert Rambo, Providence College Jeffrey Wong, University of Nevada—Reno Aaron L. Reeves Jr., St. Louis Community College—Forest Park Christian Wurst, Temple University Dolores Rinke, Purdue University—Calumet Donald E. Wygal, Rider University Melvin L. Roush, Pittsburg State University Dr. Michael Yampuler, University of Houston Anwar Salimi, California State Polytechnic University—Pomona Kathryn Yarbrough, University of North Carolina—Charlotte Gary Schader, Kean University Special thanks to hundreds of students at the following schools for their valuable feedback: Austin Community College Sinclair Community College Arizona State University St. Norbert College California Polytechnic University—Pomona SUNY College at Oneonta Central Connecticut State University University of Cincinnati Dalton State University University of Georgia Eastern Illinois University University of Massachusetts—Amherst Glendale Community College University of Massachusetts—Boston Miracosta College University of Missouri—St. Louis Northeastern Illinois University University of Wisconsin—LaCrosse Northern Kentucky University Western Oregon University Purdue University Xavier University Richard J. Daley College CCHHEE--RRIICCHH__FFIINNMM__RRPP--0099--00550044--FFMM--SSEE..iinndddd iixx 55//1188//0099 55::2222::3300 PPMM
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