ISBN: 978-1-61853-192-6 | Copyright 2019
Welcome to Financial Accounting by Mark DeFond. It is difficult to imagine being successful in today’s business world without having a solid understanding of how to read and understand financial accounting reports. The overarching objective of this text is to prepare students for careers in business by providing them with a solid foundation in financial accounting and reporting.
This book makes extensive use of real-world companies to help students understand how to use accounting information.
This book is an ideal text for use in the first financial accounting course at both the undergraduate and the graduate level. With a strong emphasis on the interpretation of real-world financial statements, the book teaches students how to read, analyze, and interpret financial accounting data to make informed business decisions. The book is filled with examples that use financial reports from actual companies, an approach that students find engaging.
A major innovation in this text is that, unlike traditional introductory financial accounting textbooks, we do not focus on debits and credits. Because our objective is to help students understand how to read and interpret financial statements, we do not emphasize financial statement preparation, which requires knowledge of the system of debits and credits. While we describe debits and credits in an Appendix, the book does not require students to learn the system of debits and credits. Dropping the emphasis on debits and credits frees up time for instructors to focus on teaching students to understand how to interpret and analyze financial reports.
In place of debits and credits, we use a “Transaction Analysis Template” to illustrate how transactions and events affect the financial statements. The Transaction Analysis Template is a “shorthand” way to communicate how transactions and events affect financial statements.
A feature that really brings accounting alive for students is seeing the accounting practices and reports of companies with which they are familiar. To this end, each chapter incorporates examples using real companies that students know. For example, we discuss accounting issues related to Google, Apple, Microsoft, Amazon, Target, Krispy Kreme, MGM Resorts, and many others.
Each chapter includes an assignment called Extending Your Knowledge that requires students to use year-end financial statements of Columbia Sportswear and Under Armour.
Boxed inserts are included throughout the text to help bridge the gap between the classroom and what students encounter in the real world. Accounting In Practice illustrations document situations a reader is likely to encounter and present the choices that companies make in reporting financial results.
These boxed inserts help students understand how financial accounting knowledge can be used to aid in the prevention and detection of accounting errors and fraud.
Increasingly, companies have found that “doing good” leads to a more successful, profitable enterprise. These boxed inserts help students understand how corporate social responsibility is being embraced by forward-thinking enterprises as part of their long-term business models.
Organized for Student Success
To help students succeed in the course, we include many features that provide direction to students and require them to recall and apply the financial accounting techniques and concepts described in each chapter.
Often students lose sight of the big picture. The Past/Present/Future feature provides students with an overview of where the chapter fits within the whole course.
Each chapter begins with a Road Map highlighting the chapter's learning objectives and corresponding eLecture videos, Guided Example videos, and assignments. The Chapter Organization provides an overview that visually depicts the layout of the chapter.
Review boxes are integrated throughout each chapter as a means of reinforcing the material just presented. Solutions are provided at the end of the chapter so students can check their work. Each Review has a corresponding Guided Example video created by the author, walking through how to solve the problem for students.
These in-chapter summaries ensure that students grasp key concepts before proceeding to the next topic.
In today's post-Sarbanes-Oxley world, ethical decision-making has never been more pertinent to business and students studying accounting. We discuss ethics where appropriate in the text, and we have included at least one assignment in each chapter that raises an ethical issue. Assignments involving ethics are identified by the icon in the margin.
Most public companies outside of the U.S. use International Financial Reporting Standards in preparing their financial reports, including many companies that list on U.S. stock exchanges. Thus, it is important to provide students with a basic understanding of the similarities and differences in the current reporting requirements and methods under U.S. GAAP and IFRS. Consequently, we incorporate discussions that examine these similarities and differences where appropriate throughout the book in IFRS Alert! boxes. In addition, the financial statements for Tesco, PLC are included in Appendix C at the end of the book. Each chapter includes an IFRS assignment related to Tesco. The IFRS icon identifies those assignments.
In addition to IFRS Alert! boxes, these Thinking Globally inserts emphasize the similarities and differences between the United States and other countries that are not necessarily related to reporting standards.
Chapter 1 Financial Accounting and Business Decisions
Chapter 2 Processing Accounting Information
Chapter 3 Accrual Basis of Accounting
Chapter 4 Understanding Accounting Information
Chapter 5 Internal Control and Cash
Chapter 6 Receivables
Chapter 7 Inventory
Chapter 8 Property, Plant, and Equipment and Intangible Assets
Chapter 9 Liabilities
Chapter 10 Stockholders' Equity
Chapter 11 Statement of Cash Flows
Chapter 12 Analysis and Interpretation of Financial Statements
Appendix A Columbia Sportswear Company: Annual Report and Social Responsibility Report
Appendix B Under Armour, Incl: Financial Statemetns
Appendix C Tesco PLC: Financial Statements
Appendix D Accounting for Investments and Consolidated Financial Statements
Appendix E Accounting and the Time Value of Money
Appendix F The Language of Accountants: Debits and Credits
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