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Accounting For Dummies®, 4th Edition

Book Description

Learn the basics of practical accounting easily and painlessly with Accounting For Dummies, 4th Edition, which features new information on accounting methods and standards to keep you up to date. With this guide, you can avoid accounting fraud, minimize confusion, maximize profits, and make sense of accounting basics with this plain-English guide to your accountant's language. Understand how to manage inventory, report income and expenses for public or private companies, evaluate profit margins, analyze business strengths and weaknesses, and manage budgets for a better bottom line.

Table of Contents

  1. Copyright
  2. About the Author
  3. Dedication
  4. Author's Acknowledgments
  5. Publisher's Acknowledgments
  6. Introduction
  7. Opening the Books on Accounting
    1. Accounting: The Language of Business, Investing, Finance, and Taxes
      1. Accounting Is Not Just for Accountants
      2. Looking for Accounting in All the Right Places
      3. Taking a Peek into the Back Office
      4. Focusing on Transactions
      5. Taking the Pulse of a Business: Financial Statements
      6. Considering Accounting Careers
    2. Financial Statements and Accounting Standards
      1. Introducing the Information Content of Financial Statements
      2. How Profit and Cash Flow from Profit Differ
      3. Gleaning Key Information from Financial Statements
      4. Keeping in Step with Accounting and Financial Reporting Standards
    3. Bookkeeping and Accounting Systems
      1. Bookkeeping and Beyond
      2. Pedaling Through the Bookkeeping Cycle
      3. Managing the Bookkeeping and Accounting System
      4. Double-Entry Accounting for Single-Entry Folks
      5. Juggling the Books to Conceal Embezzlement and Fraud
      6. Using Accounting Software
  8. Figuring Out Financial Statements
    1. Reporting Revenue, Expenses, and the Bottom Line
      1. Presenting a Typical Income Statement
      2. Finding Profit
      3. Getting Particular about Assets and Liabilities
      4. Summing Up the Financial Effects of Profit
      5. Reporting Extraordinary Gains and Losses
      6. Closing Comments
    2. Reporting Assets, Liabilities, and Owners' Equity
      1. Understanding That Transactions Drive the Balance Sheet
      2. Presenting a Balance Sheet
      3. Coupling the Income Statement and Balance Sheet
      4. Financing a Business
      5. Costs and Other Balance Sheet Values
    3. Reporting Cash Flows
      1. Seeing the Big Picture of Cash Flows
      2. Meeting the Statement of Cash Flows
      3. Dissecting the Difference Between Cash Flow and Net Income
      4. Sailing Through the Rest of the Statement of Cash Flows
      5. Trying to Pin Down "Free Cash Flow"
      6. Being an Active Reader
    4. Choosing Accounting Methods: Different Strokes for Different Folks
      1. Reading Statements with a Touch of Skepticism
      2. Figuring Out Why Financial Statements Differ
      3. Calculating Cost of Goods Sold and Cost of Inventory
      4. Recording Inventory Losses under the Lower of Cost or Market (LCM) Rule
      5. Appreciating Depreciation Methods
      6. Scanning the Expense Horizon
  9. Accounting in Managing a Business
    1. Deciding the Legal Structure for a Business
      1. Studying the Sources of Business Capital
      2. Recognizing the Legal Roots of Business Entities
      3. Incorporating a Business
      4. Considering Partnerships and Limited Liability Companies
      5. Going It Alone: Sole Proprietorships
      6. Choosing the Right Legal Structure for Income Tax
    2. Analyzing and Managing Profit
      1. Helping Managers Do Their Jobs
      2. Presenting a P&L Template
      3. Answering Two Critical Profit Questions
      4. Looking More Closely at the Profit Center P&L Report
      5. Using the P&L Template for Decision-Making Analysis
      6. Tucking Away Some Valuable Lessons
      7. Closing with a Boozy Example
    3. Financial Planning, Budgeting, and Control
      1. Exploring the Reasons for Budgeting
      2. Realizing That Not Everyone Budgets
      3. Watching Budgeting in Action
      4. Considering Capital Expenditures and Other Cash Needs
    4. Cost Concepts and Conundrums
      1. Looking down the Road to the Destination of Costs
      2. Are Costs Really That Important?
      3. Becoming More Familiar with Costs
      4. Assembling the Product Cost of Manufacturers
      5. Puffing Profit by Excessive Production
  10. Preparing and Using Financial Reports
    1. Getting a Financial Report Ready for Release
      1. Recognizing Management's Role
      2. Keeping in Mind the Purpose of Financial Reporting
      3. Staying on Top of Accounting and Financial Reporting Standards
      4. Making Sure Disclosure Is Adequate
      5. Putting a Spin on the Numbers (But Not Cooking the Books)
      6. Going Public or Keeping Things Private
      7. Dealing with Information Overload
      8. Statement of Changes in Owners' Equity
    2. How Lenders and Investors Read a Financial Report
      1. Knowing the Rules of the Game
      2. Becoming a More Savvy Investor
      3. Comparing Private and Public Business Financial Reports
      4. Analyzing Financial Statements with Ratios
      5. Frolicking Through the Footnotes
      6. Checking for Ominous Skies in the Auditor's Report
    3. How Business Managers Use a Financial Report
      1. Building on the Foundation of the External Financial Statements
      2. Gathering Financial Condition Information
      3. Culling Profit Information
      4. Digging into Cash Flow Information
    4. Audits and Accounting Fraud
      1. Exploring the Need for Audits
      2. What's in an Auditor's Report
      3. Who's Who in the World of Audits
      4. Standing Firm When Companies Massage the Numbers, or Not
      5. Discovering Fraud, or Not
      6. Who Audits the Auditors?
  11. The Part of Tens
    1. Ten Accounting Tips for Managers
      1. Reach Break-Even, and Then Rake in Profit
      2. Set Sales Prices Right
      3. Distinguish Profit from Cash Flow
      4. Call the Shots on Accounting Policies
      5. Budget Wisely
      6. Get the Accounting Information You Need
      7. Tap into Your CPA's Expertise
      8. Critically Review Your Fraud Controls
      9. Lend a Hand in Preparing Your Financial Reports
      10. Sound Like a Pro in Talking about Your Financial Statements
    2. Ten Tips for Reading a Financial Report
      1. Get in the Right Frame of Mind
      2. Decide What to Read
      3. Improve Your Accounting Savvy
      4. Judge Profit Performance
      5. Track Profit into Earnings per Share
      6. Confront Extraordinary Gains and Losses
      7. Compare Cash Flow and Profit
      8. Look for Signs of Financial Distress
      9. Recognize the Risks of Restatement and Fraud
      10. Remember the Limits of Financial Reports
  12. Glossary: Slashing Through the Accounting Jargon Jungle
  13. Index