会计学：财务会计分册 英文版PDF电子书下载

Contents in Brief 2

1 Accounting:Information for Decision Making 2

1 Accounting:Information for Decision Making 2

Table of Contents 2

Comprehensive Problem 2

Accounting Information:A Means to an End 4

Types of Accounting Information 5

Accounting from a User s Perspective 5

Accounting Systems 6

The Cost of Producing Accounting Information 7

Determining Information Needs 7

Basic Functions of an Accounting System 8

Who Designs and Installs Accounting Systems? 8

Decision Making by Extemal Parties 9

External Users of Accounting Information 9

Objectives of External Financial Reporting 10

Characteristics of Externally Reported Information 13

Decision Making by Internal Parties 14

Internal Users of Accounting Information 14

Objectives of Management Accounting 16

Characteristics of Management Accounting Information 17

Integrity of Accounting Information 18

Institutional Features 19

Professional Organizations 21

Competence,Judgment,and Ethical Behavior 22

Supplemental Topic:Careers in Accounting 25

Public Accounting 25

Management Accounting 25

Governmental Accounting 26

What About Bookkeeping? 27

Accounting Education 27

Accounting as a Stepping-Stone 27

End-of-Chapter Review 28

Assignment Material 31

2 Basic Financial Statements 38

2 Basic Financial Statements 38

Introduction to Financial Statements 40

A Starting Point:Statement of Financial Position 41

Assets 43

Liabilities 45

Creditors Claims Have Priority Over Those of Owners 45

Owner s Equity 45

The Accounting Equation 46

The Effects of Business Transactions:An Illustration 47

the Accounting Equation 52

Effects of These Business Transactions on 52

Income Statement 54

Statement of Cash Flows 54

Relationships Among Financial Statements 56

Forms of Business Organizations 58

Sole Proprietorships 58

Parmerships 59

Corporations 59

Reporting Ownership Equity in the Balance Sheet 59

The Use of Financial Statements by Outsiders 60

The Need for Adequate Disclosure 61

Management s Interest in Financial Statements 61

End-of-Chapter Review 63

Assignment Material 67

3 The Accounting Cycle:Capturing 82

Economic Events 82

3 The Accounting Cycle:Capturing Economic Events 82

The Role of Accounting Records 84

The Ledger 84

The Use of Accounts 84

Debit and Credit Entries 85

Double-Entry Accounting—The Equality of Debits andCredits 86

Recording Transactions in Ledger Accounts:An 87

Illustration 87

The Journal 90

Posting Journal Entries to the Ledger Accounts(and How to Read a Journal Entry) 91

What Is Net Income? 93

Revenue 95

Expenses 96

The Accrual Basis of Accounting 97

Investments and Withdrawals by the Owner 98

Debit and Credit Rules for Revenue and Expenses 98

Recording December s Revenue and Expense 99

Transactions:An Illustration 99

The Journal 104

December s Ledger Balances 104

The Accounting Cycle 106

The Trial Balance 106

Uses and Limitations of the Trial Balance 107

Adjusting Entries:The Next Step in the 107

Accounting Cycle 107

Shop Supplies:An Asset That Turns into an Expense 107

The Concept of Depreciation 108

Recording Depreciation Expense:An Illustration 110

The Adjusted Trial Balance 111

Preparing Financial Statements 112

The Income Statement 112

The Statement of Owner s Equity 113

The Balance Sheet 113

The Statement of Cash Flows 113

Relationship Among the Financial Statements 115

Closing the Temporary Equity Accounts 115

Closing Entries for Revenue Accounts 116

Closing Entries for Expense Accounts 116

Closing the Income Summary Account 117

Closing the Owner s Drawing Account 118

Summary of the Closing Process 118

After-Closing Trial Balance 119

The Accounting Cycle in Perspective 120

Some Concluding Remarks 120

End-of-Chapter Review 121

Assignment Material 127

4 The Accounting Cycle:Preparing an Annual Report 142

4 The Accounting Cycle:Preparing 142

an Annual Report 142

Preparing the Annual Report 144

Adjusting Entries:A Closer Look 145

The Need for Adjusting Entries 145

Types of Adjusting Entries 145

Characteristics of Adjusting Entries 146

Year-End at Overnight Auto Service 148

Apportioning Recorded Costs 149

Apportioning Unearned Revenue 151

Recording Unrecorded Expenses 153

Recording Unrecorded Revenue 155

Adjusting Entries and Accounting Principles 155

The Concept of Materiality 156

Effects of the Adjusting Entries 157

Preparing the Statements 158

Drafting the Notes That Accompany Financial 159

Statements 159

What Types of Informaton Must Be Disclosed? 161

Closing the Accounts 162

A Last Look at Overnight:Was 2002 a Good Year? 163

Preparing Financial Statements Covering DifferentPeriods of Time 164

Supplemental Topic:The Worksheet 166

Isn t This Really a Spreadsheet ? 166

What s It Used For? 166

The Mechanics:How It s Done 166

What If... :A Special Applicarion of WorksheetSoftware 169

End-of-Chapter Review 170

Assignment Material 175

A Comprehensive Accounting Cycle Problem 190

Comprehensive Problem 1—Tony s Rentals 190

Comprehensive Problem 1:Tony s Rentals 190

5 Accounting for Merchandising Activities 192

5 Accounting for Merchandising Activities 192

Merchandising Companies 194

The Operating Cycle of a Merchandising Company 194

Income Statement of a Merchandising Company 195

What Accrounting Information Does a MerchandisingCompany Need? 196

General Ledger Accounts 196

Subsidiary Ledgers:A Source of Needed Details 196

Two Approaches Used in Accounting for 199

Perpetual Inventory Systems 199

Merchandising Transactions 199

Closing Entries in a Perpetual Inventory System 202

Periodic Inventory Systems 202

Taking a Physical Inventory 202

Operation of a Periodic Inventory System 203

Closing Process in a Periodic Inventory System 204

Comparison of Perpetual and Periodic 204

Inventory Stems 204

Selecting an Inventory System 205

Modifying an Accounting System 206

Special Journals Provide Speed and Efficiency 206

Credit Terms and Cash Discounts 207

Transactions Relating to Purchases 207

Transportation Costs on Purchases 209

Returns of Unsatisfactory Merchandise 209

Transactions Relating to Sales 210

Sales Returns and Allowances 210

Sales Discounts 211

Delivery Expenses 212

Accounting for Sales Taxes 212

Evaluating the Performance of a Merchandising 212

Company 212

Net Sales 212

Gross Profit Margins 213

Using Information About Profit Margins 214

End-of-Chapter Review 215

Assignment Material 220

6 Forms of Business Organization 232

6 Forms of Business Organization 232

Sole Proprietorships 234

The Concept of the Separate Business Entity 234

Characteristics of a Sole Proprietorship 234

Unlimited Personal Liability (Subtitle:The OwnerCould Lose EVERYTHING!) 235

Accounting Practices of Sole Proprietorships 235

Evaluating the Financial Statements of a 235

Proprietorship 235

Partnerships 236

General Partnerships 237

Parmerships That Limit Personal Liability 238

Accounting Practices of Parmerships 239

Evaluating the Financial Statements of a Partnership 240

What Is a Corporation? 240

Corporations 240

Stockholders Liability for Debts of a Corporation 241

What Types of Businesses Choose the Corporate 242

Form of Organization? 242

Accounting for Corporate Income Taxes 242

Salaries Paid to Owners 244

Owner s Equity in a Corporate Balance Sheet 244

Accounting for Dividends 245

Retained Earnings 245

The Issuance of Capital Stock 245

Closing Entries and the Statement of Retained Earnings 246

Evaluating the Financial Statements of a Corporation 247

The Concept—and the Problem—of Double Taxation 248

S Corporations 248

Selecting an Appropriate Form of Business 249

Organization 249

Incorporating an Established Business 249

Supplemental Topic:Partnership Accounting— 251

A Closer Look 251

Opening the Accounts of a New Partnership 251

Allocating Partnership Net Income Among the Partners 253

End-of-Chapter Review 258

Assignment Material 262

7 Financial Assets 274

7 Financial Assets 274

How Much Cash Should a Business Have? 276

The Valuation of Financial Assets 276

Reporting Cash in the Balance Sheet 277

The Statement of Cash Flows 277

Cash 277

Cash Management 278

Internal Control Over Cash 279

Cash Disbursements 280

Bank Statements 281

Reconciling the Bank Statement 282

The Cash Budget as a Control Device 285

Short-Term Investments 285

Petty Cash Funds 285

Mark-to-Market:A New Principle of Asset Valuation 286

Accounts Receivable 287

Uncollectible Accounts 288

The Allowance for Doubtful Accounts 289

Writing Off an Uncollectible Account Receivable 290

Recovery of an Account Receivable Previously 291

Written Off 291

Manthly Estimates of Credit Losses 291

Direct Write-off Method 294

Income Tax Regulations and Financial Reporting 294

Internal Controls for Receivables 294

Management of Accounts Receivable 295

Factoring Accounts Receivable 295

Credit Card Sales 295

Evaluating the Quality of Accounts Receivable 296

Notes Receivable and Interest Charges 298

Supplemental Topic A:Accounting for MarketableSecurities 299

Purchases of Marketable Secutities 299

Recognition of Investment Revenue 300

Sales of Investments 300

Adjusting Marketable Securities to Market Value 301

Interest Revenue 302

Reporting Investment Transactions in the FinancialStatements 302

Supplemental Topic B:Notes Receivable and 302

Nature of Interest 303

Accounting for Notes Receivable 303

The Decision of Whether to Accrue Interest 305

End-of-Chapter Review 306

Assignment Material 311

8 Inventories and the Cost of Goods Sold 328

8 Inventories and the Cost of Goods Sold 328

Inventory Defined 330

The Flow of Inventory Costs 330

Which Unit Did We Sell? 330

Data for an Illustrution 331

Specific Identification 332

Cost Flow Assumptions 332

Average-Cost Method 333

First-In,First-Out Method 334

Last-In,First-Out Method 334

Evaluation of the Methods 335

Do Inventory Methods Really Affect Performance? 337

The Principle of Consistency 338

Taking a Physical Inventory 339

Just-in-Time (JIT) Inventory Systems 339

Recording Shrinkage Losses 340

LCM and Other Write-Downs of Inventory 341

The Year-End Cutoff of Transactions 341

Periodic Inventory Systems 342

Importance of an Accurate Valuation of Inventory 345

Techniques for Estimating the Cost of Goods sold andthe Ending Inventory 346

The Gross Profit Method 347

The Retail Method 347

Textbook Inventory Systems Can Be Modified...and They Often Are 348

Evaluating the Liquidity of Inventory 349

Inventory Turnover Rate 349

Accounting Methods Can Affect Analytical Ratios 350

Supplemental Topic:LIFO Reserves 351

The Significance of a LIFO Reserve 352

End-of-Chapter Review 354

Assignment Material 358

Guitar Universe,Inc. 374

Comprehensive Problem 2—Guitar Universe,Inc. 374

9 Plant Assets and Depreciation 376

9 Plant Assets and Depreciation 376

Plant Assets as a Stream of Future Services 378

Major Categories of Plant Assets 378

Accountable Events in the Lives of Plant Assets 378

Acquisitions of Plant Assets 378

Determining Cost:An Example 379

Some Special Considerations 379

Capital Expenditures and Revenue Expenditures 380

Allocating the Cost of Plant and Equipment overthe Years of Use 381

Depreciation 381

Causes of Depreciation 382

Methods of Computing Depreciation 383

The Straight-Line Method 384

The Declining-Balance Method 386

MACRS:The Tax Method 387

Which Depreciation Methods Do Most 389

Businesses Use? 389

Financial Statement Disclosures 391

The Impairment of Plant Assets 392

Disposal of Plant and Equipment 392

Equipment 393

Gains and Losses on Disposals of Plant and 393

Gains and Losses for Income Tax Purposes 394

Which Amounts Are Recorded in the Accounting 395

Records? 395

Trading in Used Assets for New Ones 396

Characteristics 397

Operating Expenses Versus Intangible Assets 397

Intangible Assets 397

Other Income Tax Reporting Obligations 397

Amortization 398

Goodwill 398

Patents 400

Trademarks and Trade Names 401

Franchises 401

Copyrights 401

Other Intangibles and Deferred Charges 401

Research and Development(R D) Costs 401

Natural Resources 402

Accounting for Natural Resources 402

A Common Goal 403

Depreciation,Amortization,and Depletion— 403

Plant Transactions and the Statement of Cash Flows 403

The Units-of-Output Method 404

Supplemental Topic:Other Depreciation Methods 404

MACRS 405

Sum-of-the-Years Digits 405

Decelerated Depreciation Methods 405

Depreciation Methods in Use:A Survey 405

End-of-Chapter Review 407

Assignment Material 411

10 Liabilities 424

10 Liabilities 424

The Nature of Liabilities 426

Accounts Payable 427

Notes Payable 427

Current Liabilities 427

The Current Portion of Long-Term Debt 428

Accrued Liabilities 429

Payroll Liabilities 429

Unearned Revenue 430

Long-Term Liabilities 430

Maturing Obligations Intended to Be Refinanced 430

Installment Notes Payable 431

Special Types of Liabilities 433

Bonds Payable 433

What Are Bonds? 434

Tax Advantage of Band Financing 436

Accounting for Bonds payable 436

The Concept of Present Value 438

Bond Prices After Issuance 439

Early Retirement of Bonds Payable 440

Capital Leases 441

Lease Payment Obligations 441

Operating Leases 441

Liabilities for Pensions and Other PostretirementBenefits 442

Deferred Income Taxes 445

Liabilities and Cash Flows 446

Evaluating the Safety of Creditors Claims 447

How Much Debt Should a Business Have? 448

Supplemental Topic A:Estimated Liabilities,Loss 450

Estimated Liabilities 450

Loss Contingencies 450

Contingencies,and Commitments 450

Commitments 452

Supplemental Topic B:Bonds Issued at a Discount 452

or a Premium 452

Accounting for Bond Discount:An Illastration 452

Accounting for Bond Premium 454

Bond Discount and Premium in Perspective 454

End-of-Chapter Review 455

Assignment Material 460

11 Stockholders Equity:Paid-in Capital 474

11 Stockholders Equity:Paid-in Capital 474

Corporations 476

Why Businesses Incorporate 476

Publicly Owned Corporations 478

Formation of a Corporation 478

Stockholder Records in a Corporation 481

Paid-in Capital of a Corporation 482

Authorization and Issuance of Capital Stock 483

Common Stocks and Preferred Stocks 484

Characteristics of Preferred Stock 485

Subscriptions to Capital Stock 488

Stock Issued for Assets Other Than Cash 488

Donated Capital 489

Book Value per Share of Common Stock 489

Market Value 490

Market Price of Preferred Stock 491

Market Price of Common Stock 492

Book Value and Market Price 493

Stock Splits 493

Treasury Stock 494

Recording Purchases of Treasury Stock 494

Reissuance of Treasiru Stock 495

Stock Buyback Programs 496

End-of-Chapter Review 498

Assignment Material 502

12 Income and Changes in Retained Earnings 512

12 Income and Changes in Retained Earnings 512

Reposing the Results of Operations 514

Developing Predictive Information 514

Reporting Irregular Items:An Illustration 514

Continuing Operations 515

Discontinued Operations 515

Extraordinary Items 516

Changes in Accounting Principles 519

Earnings per Share (EPS) 520

Basic and Diluted Earnings per Share 522

Divideut Dates 524

Cash Dividends 524

Other Transactions Affecting Retained Earnings 524

Liquidating Dividends 525

Stock Dividends 526

Statement of Retained Earnings 528

Prior Period Adjustments 529

Comprehensive Income 530

Statement of Stockholders Equity 531

Stockholders Equity Section of the Balance Sheet 532

End-of-Chapter Review 533

Assignment Material 538

13 Statement of Cash Flows 552

13 Statement of Cash Flows 552

Statement of Cash Flows 554

Example of a Statement of Cash Flows 554

Purpose of the Statement 554

Classification of Cash Flows 555

Critical Importance of Cash Flows from OperatingActivities 557

The Approach to Preparing a Statement of 557

Cash Flows 557

An Illustration 558

Preparing a Statement of Cash Flows: 558

Investing Activities 559

Operating Activities 559

Financing Activities 561

Cash and Cash Equivalents 561

Cash Flows from Operating Activities 561

Cash Payments for Merchandise and for Expenses 563

Differences Between Net Income and Net Cash 566

Flows from Operating Activities 566

Reporting Operating Cash Flows:The Direct 566

and Indirect Methods 566

Cash Flows from Investing Activities 567

Cash Flows from Financing Activities 568

Relationship Between the Statement of Cash Flowsand the Balance Sheet 569

The Statement of Cash Flows:A Second Look 570

Using the Statement of Cash Flows 570

What Priority Should Managers Give to IncreasingNet Cash Flows? 572

Budgeting:The Primary Cash Management Tool 572

Managing Cash Flows 572

Industries Incorporated 572

Annotated Statement of Cash Flows:ABM 572

Some Strategies for Permanent Improvements in 574

Cash Flow 574

Concluding Comments... 576

Supplemental Topic A:The Indirect Method 577

Comparison of the Direct and Indirect Methods 577

Differences Between Net Income and Net Cash Flowsfrom Operating Activities 578

Reconciling Net Income with Net Cash Flows 578

The Indirect Method:A Summary 580

Indirect Method May Be Required in 580

a Supplementary Schedule 580

Supplemental Topic B:A Worksheet for Preparing 581

a Statement of Cash Flows 581

Data for an Illustration 581

The Worksheet 582

Entry 582

End-of-Chapter Review 586

Assignment Material 592

14 Financial Statement Analysis 608

14 Financial Statement Analysis 608

Financial Statements Are Designed for Analysis 610

Tools of Analysis 611

Dollar and Percentage Changes 611

Trend Percentages 612

Component Percentages 613

Ratios 614

Standards of Comparison 614

Quality of Earnings 615

Quality of Assets and the Relative Amount of Debt 616

Impact of Inflation 616

Measures of Liquidity and Credit Risk 616

A Classified Balance Sheet 616

Working Capital 618

Current Ratio 619

Quick Ratio 619

Debt Ratio 620

Evaluating Financial Ratios 620

Concluding Comment—Solvency Credit Risk， 622

and the Law 622

Measures of Profitability 623

Classifications in the Income Statement 623

Some Specific Examples of Corporate Earnings 623

and Losses 623

Multiple-Step Income Statements 624

Price-Earnings Ratio 627

Earnings per Share 627

Single-Step Income Statements 628

Evaluating the Adequacy of Net Income 629

Return on Investment(ROI) 629

Return on Assets(ROA) 629

Return on Equity(ROE) 630

Comprehensive Illustration:Seacliff Company 631

Analysis by Common Stockholders 634

Return on Investmens(ROI) 636

Leverage 637

Analysis by Long-Term Creditors 638

Analysis by Short-Term Creditors 639

Cash Flow Anatysis 642

Usefulness of Notes to Financial Statements 643

Some Concluding Comments 644

Sources of Financial Information 644

Financial Analysis and Stock Price 644

Summary of Analytical Measurements 645

End-of-Chapter Review 647

Assignment Material 652

a Publicly Owned Corporation 671

Part Ⅰ 671

Comprehensive Problem 3—Toys R Us,Inc. 671

Analysis of the Financial Statements of 671

Comprehensive Problem 3 Toys R Us,Inc. 671

Possible Credit Rating 672

Part Ⅲ 672

Part Ⅱ 672

15 Global Business and Accounting 674

15 Global Business and Accounting 674

Globalization 676

Environmental Forces Shaping Globalization 678

Political and Legal Systems 678

Economic Systems 680

Culture 681

Technology and Infrastructure 683

Foreign Currencies and Exchange Rates 685

Exchange Rates 685

Accounting for Transactions with Foreign Companies 686

Currency Fluctuations—Who Wins and Who Loses? 690

Consolidated Financial Statements That IncludeForeign Subsidiaries 691

Global Sourcing 691

Foreign Corrupt Practices Act 693

End-of-Chapter Review 695

Assignment Material 699

16 Management Accounting:A Business Partner 708

16 Management Accounting: 708

A Business Partner 708

Management Accounting:Basic Framework 710

Management Accounting s Role in Assigning 710

Decision-Making Authority 710

Management Accounting s Role in Decision Making 710

Management Accounting s Role in Performance 711

Evaluation and Rewards 711

Accounting Systems:A Business Partner 712

Accounting for Manufacturing Operations 713

Classifications of Manufacturing Costs 713

Product Costs Versus Period Costs 713

Product Costs and the Matching Principle 715

Inventories of a Manufacturing Business 715

The Flow of Costs Parallels the Flow of PhysicalGoods 716

Accounting for Manufacturing Costs:An Illustration 716

Direct Materials 717

Direct Labor 718

Manufacturing Overhead 718

Overhead Application Rates 720

Direct and Indirect Manufacturing Costs 720

What Drives Overhead Costs? 722

Workin Process Inventory,Finished Goods Inventory,and the Cost of Goods Sold 723

The Need for Per-Unit Cost Data 724

Determining the Cost of Finished Goods Manufactured 724

Financial Statements of a Manufacturing Company 725

End-of-Chapter Review 727

Assignment Material 730

17 Accounting Systems for Measuring Costs 746

17 Accounting Systems for Measuring Costs 746

Cost Accounting Systems 748

Basic Cost Accounting Methods 749

Job Order Costing 750

The Job Cost Sheet 750

Accounting for Direct Materials 751

Flow of Costs in Job Costing:An Illustration 751

Accounting for Direct Labor Costs 752

Accounting for Overhead Costs 752

Accounting for Completed Jobs 753

Job Order Costing in Service Industries 755

Process Costing 756

Work in Process Account—The Key to Process Costing 756

Process Costing and Equivalent Units 757

Cost per Equivalent Unit 759

Flow of Costs in Process Costing:An Illustration 761

Computing and Using Unit Costs 762

Evalua tingDepartmental Efficiency 763

Activity-Based Costing(ABC) 763

ABC Versus a Single Application Rate:A Comparison 764

Determining Unit Costs Using ABC 770

The Trend Toward More Informative Cost 771

Accounting Systems 771

End-of-Chapter Review 773

Assignment Material 779

18 Costing and the Value Chain 792

18 Costing and the Value Chain 792

The Value Chain 794

Value-and Non-Value-Added Activities 794

Activity-Based Management 795

Activity-Based Management Across the Value Chain 796

ABC:A Subset of Activity-Based Management 798

The Target Costing Process 798

Components of the Target Costing Process 799

Target Costing:An Illustration 800

Characteristics of the Target Costing Process 803

Just-in-Time Inventory Procedures 803

JIT,Supplier Relationships,and Product Quality 804

Measures of Efficiency in a JIT System 805

A Concluding Comment 805

Total Quality Management and the Value Chain 806

Components of the Cost of Quality 806

Measuring the Cost of Quality 808

Productivity and Quality 809

Managing Across the Value Chain 809

End-of-Chapter Review 810

Assignment Material 814

19 Cost-Volume-Profit Analysis 824

19 Cost-Volume-Profit Analysis 824

Cost-Volume Relationships 826

Cost-Volume Relationships:A Graphic Analysis 827

The Behavior of Per-Unit Costs 829

Economies of Scale 830

Additional Cost Behavior patterns 831

Cost Behavior and Operating Income 832

Cost-Volume-Profit Analysis:An Illustration 833

Preparing and Using a Cost-Volume-Profit Graph 833

Contribution Margin:A Key Relationship 835

How Many Dollars in Sales Must We Generate? 836

How Many Units Must We Sell? 836

What Is Our Margin of Safety? 837

What Change in Operating Income Do We Anticipate? 837

Business Applications of CVP 837

Additional Considerations in CVP 840

CVP Analysis When a Company Sells Many Products 840

Determining Semivariable Cost Elements: 841

The High-Low Method 841

Assumptions Underlying Cost-Volume-Profit Analysis 842

Sunmary of Basic Cost-Volume-Profit Relationships 842

End-of-Chapter Review 844

Assignment Material 847

20 Incremental Analysis 860

20 Incremental Analysis 860

The Challenge of Changing Markets 862

The Concept of Relevant Cost Information 862

Relevant Information in Business Decisions 863

Opportunity Costs 864

Sunk Costs Versus Out-of-Pocket Costs 864

Incremental Analysis in Common Business 865

Decisions 865

Special Order Decisions 865

Production Constraint Decisions 867

Make or Buy Decisions 868

Sell,Scrap,or Rebuild Decisions 870

Joint Product Decisions 871

Concluding Comments 872

End-of-Chapter Review 874

Assignment Material 877

Comprehensive Problem 4—Gilster Company 887

Comprehensive Problem 4 The Gilster 887

Company 887

21 Responsibility Accounting and Performance 890

Evaluation 890

21 Responsibility Accounting and Performance Evaluation 890

Responsibility Centers 892

The Need for Information About Responsibility CenterPerformance 892

Cost Centers,Profit Centers,and Investment Centers 892

Responsibility Accounting Systems 896

Responsibility Accounting:An Illustration 896

Assigning Revenue and Costs to Business Centers 896

Vorioble Costs 898

Contribution Margin 898

Fixed Costs 898

Traceable Fixed Costs 899

Common Fixed Costs 899

Responsibility Margin 900

When Is a Responsibility Center Unprofitable ? 902

Evaluating Responsibility Center Managers 902

Arguments Against Allocating Common Fixed Costs toBusiness Centers 903

Transfer Prices 903

Nonfinancial Objectives and Information 905

Business Center Reporting in Financial Statements 906

Supplemental Topic:Variable Costing 907

Full Costing:The Traditional View of Product Costs 907

Variable Costing:A Different View of Product Costs 908

An Illustration of Variable Costing 908

Fluctuation in the Level of Production 911

Why Is Variable Costing Unacceptable for Use in 914

Financial Statements and Income Tax Returns? 914

End-of-Chapter Review 915

Assignment Material 918

22 Operational Budgeting 930

22 Operational Budgeting 930

Profit Rich,Yet Cash Poor 932

Operating Cash Flows:The Lifeblood of Survival 933

Budgeting:The Basis for Planning and Control 934

Benefits Derived from Budgeting 934

Establishing Budgeted Amounts 935

The Budget Period 935

The Master Budget:A Package of Related Budgets 936

Steps in Preparing a Master Budget 937

Preparing the Master Budget:An Illustration 938

Operating Budget Estimates 938

Budgeted Income Statement 942

Financial Budget Estimates 943

The Cash Budget 948

Budgeted Balance Sheets 948

Using Budgets Effectively 948

Flexible Budgeting 950

End-of-Chapter Review 953

Assignment Material 956

23 Standard Cost Systems 968

23 Standard Cost Systems 968

Establishing and Revising Standard Costs 970

Standard Cost Systems 970

Direct Material Standards 971

Direct Labor Standards 971

Manufacturing Overhead Standards 971

Standard Costs and Variance Analysis:An Illustration 972

Materials Price and Quantity Variances 973

Labor Rate and Efficiency Variances 975

Manufacturing Overhead Variances 976

Valuation of Finished Goods 979

Evaluating Cost Variances from Different Perspectives 979

In Conclusion... 981

A Final Note:JIT Systems and Variance Analysis 982

End-of-Chapter Review 983

Assignment Material 986

Comprehensive Problem 5—Utease Corporation 1000

Comprehensive Problem 5 Utease Corporation 1000

24 Capital Budgeting 1002

24 Capital Budgeting 1002

Capital Investment Decisions 1004

Financial and Nonfinancial Considerations 1004

An Illustration 1005

Evaluating Capital Investment Proposals: 1005

Payback Period 1006

Return on Average Investment 1006

Discounting Future Cash Flows 1007

Replacing Assets 1010

Behavioral Considerations in Capital Budgeting 1012

In Summary... 1013

A Concluding Comment from the Authors 1013

End-of-Chapter Review 1014

Assignment Material 1017

Appendix A Toys R Us Annual Report 1029

APPENDIX A Annual Report of Toys R Us 1029

APPENDIX B Exploring the Internet 1056

Getting Started 1056

Appendix B Exploring The Internet 1056

Use of the Intemet in This Textbook 1056

Internet Assignment Materials 1057

The Concept 1070

Amounts and Present Values 1070

Relationships Between Present Values and FutureAmounts 1070

APPENDIX C The Time Value of Money:Future 1070

Appendix C The Time Value of Money:Future Amounts and Present Values 1070

Compound Interest 1071

Future Amounts 1072

The Tables Approach 1072

Applications of the Tune Value of Money Concept 1072

The Future Amount of an Annuity 1074

Interest Periods of Less Than One Year 1075

Present Values 1076

Using Present Value Tables 1077

What Is the Appropriate Discount Rate? 1077

The Present Value of an Annuity 1078

Discount Periods of Less Than One Year 1079

Interest-Bearing Receivables and Payables 1080

Non-Interest-Bearing Notes 1080

Valuation of Financial Instmments 1080

Market Prices of Bonds 1082

Capital Leases 1082

Obligations for Postretirement Benefits 1083

Deferred Income Taxes 1084

Capital Budgeting:Another Application of PresentValue 1084

Disclosure of Up-to-Date Present Value Information 1084

Assignment Material 1085

Index 1089