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Table of Contents

    • About the Authors
    • Acknowledgments
    • Preface
    • 1How Does a Company Gather Information about Its Inventory?
      • 1.1Determining and Reporting the Cost of Inventory
      • 1.2Perpetual and Periodic Inventory Systems
      • 1.3The Calculation of Cost of Goods Sold
      • 1.4Reporting Inventory at the Lower-of-Cost-or-Market
      • 1.5Determining Inventory on Hand
      • 1.6End-of-Chapter Exercises
    • 2What Should Decision-makers Know So That Good Decisions Can Be Made about an Organization?

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      • 2.1Creating a Portrait of an Organization That Can Be Used by Decision Makers

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      • 2.2Dealing with Uncertainty

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      • 2.3The Need for Generally Accepted Accounting Principles

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      • 2.4Four Basic Terms Found in Financial Accounting

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      • 2.5End-of-Chapter Exercises

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    • 3In What Form Is Financial Information Actually Delivered to Decision Makers Such as Investors and Creditors?

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      • 3.1The Construction of an Income Statement

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      • 3.2Reported Profitability and the Principle of Conservatism

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      • 3.3Increasing the Net Assets of a Company

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      • 3.4Reporting a Balance Sheet and a Statement of Cash Flows

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      • 3.5End-of-Chapter Exercises

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    • 4How Does an Organization Accumulate and Organize the Information Necessary to Prepare Financial Statements?

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      • 4.1The Essential Role of Transaction Analysis

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      • 4.2The Effects Caused by Common Transactions

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      • 4.3An Introduction to Double-Entry Bookkeeping

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      • 4.4Preparing Journal Entries

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      • 4.5The Connection of the Journal and the Ledger

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      • 4.6End-of-Chapter Exercises

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    • 5Why Must Financial Information Be Adjusted Prior to the Production of Financial Statements?

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      • 5.1The Need for Adjusting Entries

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      • 5.2Preparing Various Adjusting Entries

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      • 5.3Preparing Financial Statements Based on Adjusted Balances

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      • 5.4Chapter Appendix

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      • 5.5End-of-Chapter Exercises

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    • 6Why Should Decision Makers Trust Financial Statements?

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      • 6.1The Need for the Securities and Exchange Commission

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      • 6.2The Role of the Independent Auditor in Financial Reporting

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      • 6.3Performing an Audit

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      • 6.4The Need for Internal Control

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      • 6.5The Purpose and Content of an Independent Auditor’s Report

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      • 6.6End-of-Chapter Exercises

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    • 7In a Set of Financial Statements, What Information Is Conveyed about Receivables?

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      • 7.1Accounts Receivable and Net Realizable Value

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      • 7.2Accounting for Uncollectible Accounts

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      • 7.3The Problem with Estimations

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      • 7.4Estimating the Amount of Uncollectible Accounts

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      • 7.5Remeasuring Foreign Currency Balances

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      • 7.6A Company’s Vital Signs—Accounts Receivable

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      • 7.7End-of-Chapter Exercises

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    • 8Why Does a Company Need a Cost Flow Assumption in Reporting Inventory?

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      • 8.1The Necessity of Adopting a Cost Flow Assumption

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      • 8.2The Selection of a Cost Flow Assumption for Reporting Purposes

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      • 8.3Problems with Applying LIFO

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      • 8.4Merging Periodic and Perpetual Inventory Systems with a Cost Flow Assumption

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      • 8.5Applying LIFO and Averaging to Determine Reported Inventory Balances

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      • 8.6Analyzing Reported Inventory Figures

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      • 8.7End-of-Chapter Exercises

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    • 9In a Set of Financial Statements, What Information Is Conveyed about Property and Equipment?

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      • 9.1The Reporting of Property and Equipment

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      • 9.2Determining Historical Cost and Depreciation Expense

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      • 9.3Recording Depreciation Expense for a Partial Year

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      • 9.4Alternative Depreciation Patterns and the Recording of a Wasting Asset

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      • 9.5Recording Asset Exchanges and Expenditures That Affect Older Assets

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      • 9.6Reporting Land Improvements and Impairments in the Value of Property and Equipment

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      • 9.7End-of-Chapter Exercises

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    • 10In a Set of Financial Statements, What Information Is Conveyed about Intangible Assets?

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      • 10.1Identifying and Accounting for Intangible Assets

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      • 10.2The Balance Sheet Reporting of Intangible Assets

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      • 10.3Recognizing Intangible Assets Owned by a Subsidiary

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      • 10.4Accounting for Research and Development

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      • 10.5Acquiring an Asset with Future Cash Payments

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      • 10.6End-of-Chapter Exercises

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    • 11In a Set of Financial Statements, What Information Is Conveyed about Equity Investments?

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      • 11.1Accounting for Investments in Trading Securities

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      • 11.2Accounting for Investments in Securities That Are Available for Sale

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      • 11.3Accounting for Investments by Means of the Equity Method

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      • 11.4The Reporting of Consolidated Financial Statements

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      • 11.5End-of-Chapter Exercises

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    • 12In a Set of Financial Statements, What Information Is Conveyed about Current and Contingent Liabilities?

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      • 12.1Basic Reporting of Liabilities

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      • 12.2Reporting Current Liabilities Such as Gift Cards

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      • 12.3Accounting for Contingencies

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      • 12.4Accounting for Product Warranties

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      • 12.5End-of-Chapter Exercises

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    • 13In a Set of Financial Statements, What Information Is Conveyed about Noncurrent Liabilities Such as Bonds?

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      • 13.1Debt Financing

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      • 13.2The Issuance of Notes and Bonds

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      • 13.3Accounting for Zero-Coupon Bonds

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      • 13.4Pricing and Reporting Term Bonds

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      • 13.5Issuing and Accounting for Serial Bonds

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      • 13.6Bonds with Other Than Annual Interest Payments

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      • 13.7End-of-Chapter Exercises

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    • 14In Financial Statements, What Information Is Conveyed about Other Noncurrent Liabilities?

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      • 14.1Accounting for Leases

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      • 14.2Operating Leases versus Capital Leases

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      • 14.3Recognition of Deferred Income Taxes

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      • 14.4Reporting Postretirement Benefits

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      • 14.5End-of-Chapter Exercises

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    • 15In a Set of Financial Statements, What Information Is Conveyed about Shareholders’ Equity?

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      • 15.1Selecting a Legal Form for a Business

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      • 15.2The Issuance of Common Stock

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      • 15.3Issuing and Accounting for Preferred Stock and Treasury Stock

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      • 15.4The Issuance of Cash and Stock Dividends

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      • 15.5The Computation of Earnings per Share

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      • 15.6End-of-Chapter Exercises

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    • 16In a Set of Financial Statements, What Information Is Conveyed by the Statement of Cash Flows?

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      • 16.1The Structure of a Statement of Cash Flows

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      • 16.2Cash Flows from Operating Activities: The Direct Method

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      • 16.3Cash Flows from Operating Activities: The Indirect Method

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      • 16.4Cash Flows from Investing and Financing Activities

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      • 16.5Appendix

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      • 16.6End-of-Chapter Exercises

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    • AAppendix: Present Value Tables

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