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Accounting, 3rd Edition

Book Description

We asked over 5000 accounting lecturers what would help them teach and students learn?

The results were:

Help with student engagement and varying levels of ability;

Real world examples to be used in class;

Content to break up lectures and engage students.

Accounting 3e has been developed to incorporate these elements and much more!

Accounting 3e provides a very accessible and easy-to-follow introduction and is aimed at students studying accounting for the first time. The book introduces concepts in an engaging and easy-to-follow manner, and examples are tried and tested with many graded questions and answers.

The third edition is updated to reflect IFRS terminologies and format including the reorganisation of the UK standards committee in July 2012. Double entry bookkeeping is included, however, this can be bypassed for students not requiring this.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Dedication
  5. Contents
  6. About the Author
  7. About the Book
  8. Acknowledgements
  9. Chapter 1: Introduction to accounting
    1. Introduction
    2. Nature of Accounting
    3. Importance of Accounting
    4. Financial Accounting and Management Accounting
    5. Users of Accounts
    6. Accounting Context
    7. Types of Accountancy
    8. Types of Accountant
    9. Limitations of Accounting
    10. Conclusion
    11. Discussion Questions
  10. SECTION A: Financial Accounting: The Techniques
    1. Chapter 2: The accounting background
      1. Introduction
      2. Financial Accounting
      3. Language of Accounting
      4. Student Example
      5. Why Is Financial Accounting Important?
      6. Accounting Principles
      7. Accounting Conventions
      8. Conclusion
      9. Discussion Questions
      10. Numerical Questions
      11. Appendix 2.1: Illustration of a Consolidated Income Statement for Marks & Spencer plc 2010
      12. Appendix 2.2: Illustration of a Consolidated Statement of Financial Position for Marks and Spencer plc 2010
      13. Appendix 2.3: Illustration of a Consolidated Statement of Cash Flows for Marks and Spencer 2010
      14. Appendix 2.4: Illustration of a Consolidated Income Statement for Volkswagen 2009
      15. Appendix 2.5: Illustration of a Consolidated Balance Sheet (Statement of Financial Position) for Volkswagen 2009
      16. Appendix 2.6: Illustration of a Consolidated Cash Flow Statement (Statement of Cash Flows) for Volkswagen 2009
    2. Chapter 3: Recording: Double-entry book keeping
      1. Introduction
      2. The Accounting Equation
      3. Worked Example
      4. Computers
      5. Conclusion
      6. Discussion Questions
      7. Numerical Questions
    3. Chapter 4: Main financial statements: The Income Statement (Profit and Loss Account)
      1. Introduction
      2. Context
      3. Definitions
      4. Layout
      5. Main Components
      6. Profit
      7. Listed Companies
      8. Capital and Revenue Expenditure
      9. Limitations
      10. Interpretation
      11. Conclusion
      12. Discussion Questions
      13. Numerical Questions
    4. Chapter 5: Main financial statements: The statement of financial position (balance sheet)
      1. Introduction
      2. Context
      3. Definitions
      4. Layout
      5. Main Components
      6. Limitations
      7. Interpretation
      8. Listed Companies
      9. Conclusion
      10. Discussion Questions
      11. Numerical Questions
      12. Appendix 5.1: Horizontal Format of Statement of Financial Position
    5. Chapter 6: Preparing the financial statements
      1. Introduction
      2. Main Financial Statements
      3. Trial Balance to the Income Statement (Profit and Loss Account) and the Statement of Financial Position (Balance Sheet)
      4. Adjustments to Trial Balance
      5. Comprehensive Example
      6. Conclusion
      7. Discussion Questions
      8. Numerical Questions
    6. Chapter 7: Partnerships and limited companies
      1. Introduction
      2. Context
      3. Partnerships
      4. Limited Companies
      5. Distinctive Accounting Features of Limited Companies
      6. Accounting Treatment For Limited Companies
      7. Limited Company Example: Stevens, Turner Ltd
      8. Limited Companies: Published Accounts
      9. Conclusion
      10. Discussion Questions
      11. Numerical Questions
      12. Appendix 7.1: Example of an Income Statement (Profit and Loss Account) using UK GAAP (Manchester United Ltd)
      13. Manchester United Limited
      14. Appendix 7.2: Example of a Statement of Financial Position (Balance Sheet) using UK GAAP (Manchester United Ltd)
      15. Manchester United Limited
    7. Chapter 8: Main financial statement: The statement of cash flows
      1. Introduction
      2. Importance of Cash
      3. Context
      4. Cash and the Bank Account
      5. Relationship between Cash and Profit
      6. Preparation of Statement of Cash Flows
      7. Conclusion
      8. Discussion Questions
      9. Numerical Questions
      10. Appendix 8.1: Main Headings for the Cash Flow Statement (Statement of Cash Flows) for Sole Traders, Partnerships and some Non-Listed Companies under UK GAAP
      11. Appendix 8.2: Preparation of a Sole Trader's Cash Flow Statement Using the Direct Method Using UK Format
      12. Appendix 8.3: Preparation of the Cash Flow Statement of Any Company Ltd using the Indirect Method Using UK GAAP
      13. Appendix 8.4: Example of Statement of Cash Flow (Cash Flow Statement) Using UK GAAP (Manchester United Ltd)
    8. Chapter 9: Interpretation of accounts
      1. Introduction
      2. Context
      3. Overview
      4. Importance of Ratios
      5. Closer Look at Main Ratios
      6. Worked Example
      7. Report Format
      8. Holistic View of Ratios
      9. Performance Indicators
      10. Limitations
      11. Conclusion
      12. Discussion Questions
      13. Numerical Questions
      14. Appendix 9.1: John Brown Plc
      15. APPENDIX 9.2: The Cash Flows Ratio using UK GAAP
  11. SECTION B: Financial Accounting: The Context
    1. Chapter 10: Regulatory and conceptual frameworks
      1. Introduction
      2. Traditional Corporate Model: Directors, Auditors and Shareholders
      3. Regulatory Framework
      4. Regulatory Framework in the UK
      5. Corporate Governance
      6. Conceptual Framework
      7. Conclusion
      8. Selected Reading
      9. Discussion Questions
    2. Chapter 11: Measurement systems
      1. Introduction
      2. Overview
      3. Measurement Systems
      4. Deficiencies of Historical Cost Accounting
      5. Illustrative Example of Different Measurement Systems
      6. Real Life
      7. Conclusion
      8. Selected Reading
      9. Discussion Questions
    3. Chapter 12: The annual report
      1. Introduction
      2. Definition
      3. Context
      4. Multiple Roles
      5. Main Contents of the Annual Report
      6. Presentation
      7. Group Accounts
      8. Impression Management
      9. Conclusion
      10. Selected Reading
      11. Discussion Questions
    4. Chapter 13: Creative accounting
      1. Introduction
      2. Definition
      3. Managerial Motivation
      4. Methods of Creative Accounting
      5. Example
      6. Real Life
      7. Case Studies
      8. Creative Presentation
      9. Controlling Creative Accounting
      10. Conclusion
      11. Selected Reading
      12. Discussion Questions
    5. Chapter 14: International accounting
      1. Introduction
      2. Context
      3. Divergent Forces
      4. Classification
      5. Country Snapshots
      6. Convergent Forces
      7. Conclusion
      8. Selected Reading
      9. Discussion Questions
      10. Appendix 14.1: List of International Standards
  12. SECTION C: Management Accounting
    1. Chapter 15: Introduction to management accounting
      1. Introduction
      2. Context
      3. Relationship with Financial Accounting
      4. Overview
      5. Cost Minimisation and Revenue Maximisation
      6. Use of Computers and Impact of Digital Technology
      7. Art not a Science
      8. Changing Nature of Management Accounting
      9. Conclusion
      10. Selected Reading
      11. Discussion Questions
    2. Chapter 16: Costing
      1. Introduction
      2. Importance of Cost Accounting
      3. Types of Cost
      4. Traditional Costing
      5. Activity-Based Costing
      6. Costing for Inventory Valuation
      7. Different Costing Methods for Different Industries
      8. Target Costing
      9. Cost-Cutting
      10. Conclusion
      11. Discussion Questions
      12. Numerical Questions
    3. Chapter 17: Planning, control and performance: Budgeting
      1. Introduction
      2. Management Accounting Control Systems
      3. Nature of Budgeting
      4. Cash Budget
      5. Other Budgets
      6. Manufacturing Budgets
      7. Comprehensive Budgeting Example
      8. Behavioural Aspects of Budgeting
      9. Responsibility Accounting
      10. Conclusion
      11. Discussion Questions
      12. Numerical Questions
    4. Chapter 18: Planning, control and performance: Standard costing
      1. Introduction
      2. Nature of Standard Costing
      3. Standard Cost Variances
      4. Interpretation of Variances
      5. Conclusion
      6. Discussion Questions
      7. Numerical Questions
    5. Chapter 19: Short-term decision making
      1. Introduction
      2. Decision Making
      3. Contribution Analysis
      4. Decisions, Decisions
      5. Throughput Accounting
      6. Break-Even Analysis
      7. Contribution Graph
      8. Conclusion
      9. Discussion Questions
      10. Numerical Questions
    6. Chapter 20: Strategic management accounting
      1. Introduction
      2. Nature of Strategic Management Accounting
      3. Assessment of Current Position of the Business
      4. Appraisal of Current Position of the Business
      5. Strategic Choice of Future Direction
      6. Conclusion
      7. Selected Reading
      8. Discussion Questions
      9. Numerical Questions
    7. Chapter 21: Long-term decision making: Capital investment appraisal
      1. Introduction
      2. Nature of Capital Investment
      3. Capital Investment Appraisal Techniques
      4. Payback Period
      5. Accounting Rate of Return
      6. Net Present Value
      7. Profitability Index
      8. Internal Rate of Return (IRR)
      9. Other Factors
      10. Conclusion
      11. Discussion Questions
      12. Numerical Questions
      13. Appendix 21.1: Present Value of £1 at Compound Interest Rate (1 + r)
    8. Chapter 22: The management of working capital and sources of finance
      1. Introduction
      2. Nature of Sources of Finance
      3. Short-Term Financing
      4. Long-Term Financing
      5. Cost of Capital
      6. Conclusion
      7. Discussion Questions
      8. Numerical Questions
  13. Glossary of Key Accounting Terms
  14. Appendix: Answers
  15. Index
  16. Answers to End of Chapter Questions for Lecturers