# Accounting Text And Cases Essay

5166 words - 21 pages

CHAPTER 1
THE NATURE AND PURPOSE OF ACCOUNTING

Changes from Twelfth Edition

The chapter has been updated.

Approach

On the first day, the usual objective is to create interest in the subject, to set the scene, and to give an overview of the course. The first part of the chapter does this. The second part of the chapter gives a fairly specific introduction to the nature of financial accounting. Instructors probably may want to bring in material from their own reading or experience to make the introductory points.

Cases

The cases are intended to get the student to start thinking like accountants and users of accounting information, without knowledge of any of the techniques. Ribbons ...view middle of the document...

For example, the use of double lines to underscore a total, the position of the dollar sign at the top of a column of numbers, and the dating of the balance sheet.

The purpose of this problem is to illustrate the equality of the basic accounting equation: assets equal liabilities plus owners’ equity.

Problem 1-2

The missing numbers are:

Year 1

|Noncurrent assets |\$410,976 |
|Noncurrent liabilities |240,518 |

Year 2

|Current assets |\$ 90,442 |
|Total assets |288,456 |
|Noncurrent liabilities |78,585 |

Year 3

|Total assets |\$247,135 |
|Current liabilities |15,583 |
|Total liabilities and owners’ equity |247,135 |

Year 4

|Current assets |\$ 69,090 |
|Current liabilities |17,539 |

The basic accounting equation is

Assets = Liabilities + Owners’ equity

The instructor might want to explain how this equation is used (as it is in this problem) to calculate “plug” numbers when managers construct projected balance sheets. The manager does not have to complete every balance because the manager can plug certain balances.

The instructor may also draw attention to the other equations illustrated in the problem. These include:

Current assets + Noncurrent assets = Total assets

Current liabilities + Noncurrent liabilities = Total liabilities

Paid-in capital + Retained earnings = Owners’ equity.

Later in the course the instructor should explain that the additional paid-in capital account is a special account to record the excess of capital received over par value in common stock issuances. At this stage in the course it is better to simply use a descriptive term, like paid-in capital, to describe capital received from stockholders. Also it avoids the use of the term common stock, which some students many not understand.

Problem 1-3

The missing numbers are:

Year 1

|Gross margin |\$9,000 |
|Tax expense |1,120 |

Year 2

|Sales |\$11,968 |
|Profit before taxes |2,547 |

Year 3

|Cost of goods sold |\$2,886 |
|Other expenses |6,296 |

Other accounting equations such as the following are also illustrated by this problem:

Gross margin = Sales - Cost of goods sold

Profit before taxes = Gross margin - Other expenses

Net income = Profit before taxes - Tax expense

The...

## Other Essays Like Accounting Text and Cases

### Account Department Essay

932 words - 4 pages resource department, research and development department, innovation and technological department (if any), the customer services department, and the accounting department. However, all of the departments are not given such importance because of the complexity and difficulty in understanding their functions. In most cases, the accounting department often involves criticisms because of the complexities from the external business environment and thus

### Costing Methods Essay

2818 words - 12 pages this lesson, you will be able to: state the meaning and scope of cost accounting; explain the objectives of cost accounting; differentiate between cost accounting and financial accounting; state importance of cost accounting; explain limitations of cost accounting. 27.1 MEANING AND SCOPE OF COST ACCOUNTING Cost accounting is the process of determining and accumulating the cost of product or activity. It is a process of accounting for the

### Different Accounting Software

3159 words - 13 pages and databases. They cover various business applications that help serve the needs of national accounting standards. High-End Accounting Software o The most expensive and complex business accounting applications are often part of an all-embracing software suite that is at times called Enterprise Resource Planning (ERP) software. The implementation period of these applications is usually greater than five or six months. In several cases, high-end

### Ananlysis

857 words - 4 pages problem. Although this is an exaggeration, it is not far from the truth. The text and cases in this chapter constitute only a beginning in understanding and it is to be expected that students will understand the matter thoroughly only after they have attacked it from several different angles. Sometimes we ask the class “Suppose a company received a lawyer’s bill for \$1,000. Explain all the different ways in which this bill could be recorded in the

### Case Summaries Accy 401, Emba; Fall 2000

5169 words - 21 pages price, has a major effect on how each division operates. Transfer prices are a common source of friction between divisions. There is no ideal transfer pricing system, but some are far worse than others. This course deals with financial accounting from a management perspective; your next accounting course deals almost exclusively with cost and managerial accounting. Many of the financial accounting cases, however, are broad enough to cover

### Accountant

1074 words - 5 pages typically make the auditors vulnerable. An understanding of auditing standards and auditor liability is thus needed to either defend or prosecute accounting professionals. Click on the link to read more about our auditor liability expert services, including cases involving the interpretation of U.S. GAAP and IFRS, white collar defense, financial reporting fraud, securities fraud, complex securitizations, or derivatives disputes. Dr. Barry Jay

### Almarai Information

669 words - 3 pages encouraged. Textbook and other resource readings, before and after lectures. Problem solving homework exercises assigned after lecture, to test students' understanding of new material. Solution of homework problems reviewed in class during the following session. Independent research on relevant topics encouraged. COURSE TEXT: Title: Managerial Accounting Author: Ronald W. Hilton

### Accounting Regulated or Unregulated

992 words - 4 pages Should accounting be regulated or unregulated? The controversial topic of accounting regulation has been argued for many years; should accounting be regulated or unregulated? Congress empowered the Securities and Exchange Commission (SEC) through the Securities Act of 1933 and the Securities Exchange Act of 1934 to regulate financial reporting in response to the Great Crash of 1929 (B). Regulated Proponents of regulated accounting

### Discussion

1012 words - 5 pages * From the e-Activity, evaluate the importance of the principal issue litigated in the case in question using the tax research steps outlined in Appendix A of your text. * Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS). Suggest which document creates better guidance in the preparation of tax returns and

### Fasb Results Client's Lawsuit

1464 words - 6 pages -expanded-disclosures-regarding-loss-contingencies/ Hedge Accounting. (n.d.). CNS Treasury Software, http://www.cnstreasury.com/hedge-accounting/. Financial Accounting Standards Board. (1975). Summary of Statement No. 5. Retrieved from http://www.fasb.org Kuepper, J. (n.d.). Hedging. InvestorWorld.com, http://www.investorwords.com/tips/594/hedging.html. Richard G Schroeder, M. W. (2011). Financial Accounting Theory and Analysis. Text and Cases. Tenth Edition. John Wiley & Sons Inc. Sephton, C. (n.d.). How Will The Impairment Of The Patent In The Event Of Losing A Lawsuit Be Reflected On The Financial Statements? Blurt It, http://www.blurtit.com/q340969.html.

### Effects of Technology on the Accounting Profession

989 words - 4 pages Effects of Technology on the Accounting Profession ACC Effects of Technology on the Accounting Profession Information systems are changing many aspects of business, especially in accounting. Accounting information systems (AIS) affect various aspects of the profession including: Financial Accounting, Managerial Accounting, Auditing, and Taxation. New technologies have made it much easier in many cases to accomplish tasks that

## Related Papers

### Accounting Standard Board Paper

1323 words - 6 pages united. The FASB and IASB are so close to the same type of organization. FASB is on behalf of the US and the IASB is on behalf of the International countries. Then there is a brief description of how the MSA program will benefit from the knowledge of the courses. The FASB and IASB will both give great information for the MSA program. References Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2011). Financial accounting theory and analysis: Text readings and cases (10th ed.). Hoboken, NJ: Wiley. Sperling, J. G. (2012). University of Phoenix Online Academic Catalog. Retrieved from http://ecatalog.phoenix.edu/31_ONLINE/2012/JUNE/PDF/catalog.pdf

### Accounting Standards Boards Paper

1150 words - 5 pages , budgeting, taxation, and ethics are the foundation on which any business structure can be built upon. The amount of responsibility associated with the accounting vocation is tremendous. Integrity, honesty, consistency and accuracy have to be a part of your core in order to perform in the capacity of an accounting Professional. References Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2011). Financial accounting theory and analysis: Text

### Client Understanding Essay

807 words - 4 pages 24, 13, from www.fasb.org Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2010). Intermediate accounting (13th ed.). Hoboken, NJ: Wiley & Sons. Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2011). Financial accounting theory and analysis: Text and cases (10th ed.). Hoboken, NJ: Wiley & Sons. Walther, L. (2010, 07 25). 8 - Lower of Cost or Market. Retrieved from Youtube: http://www.youtube.com/watch?v=LAHwKKr3LYk Financial

### Mangaers And Accountinf Essay

633 words - 3 pages handful of critical information variables and need to keep a close eye on the business. All these factors are included in internal accounting reports. Only the business manager, can identify the most important numbers that should be monitored closely to know how things are going. There are many cases where large organizations have failed due to poor accounting management. Enron’s collapse raises the issue of how to reinforce directors