Financial Accounting as a Second Language

Accounting may be challenging, but with training and practice students can come out of a financial accounting course having achieved success! With David Weiner’s Financial Accounting as a Second Language, students will get the practice and training they need to better understand fundamental principles, build confidence, and solve problems.

The goal of this title is to: introduce the language of accounting, explain the core concepts of accounting, and learn how to apply these core concepts to solve accounting problems. Developed by David Weiner through his forty year teaching career, this text is filled with study skills, techniques, and strategies used help students learn the core concepts of accounting and get the grades they deserve.

Preface ix

Chapter 1 Basic Financial Accounting Concepts 1

Learning Objectives 1

Accounting as the Language of Business 2

Objectives of Financial Reporting 4

Basic Accounting Concepts 5

The Basic Financial Statements 8

Using Financial Statement Information 17

Review Questions 18

Practice Multiple Choice Questions 21

Chapter 2 The Accounting Cycle 24

Learning Objectives 24

Transaction Analysis 26

The Accounting Cycle 29

Summary of the Seven Types of Accounts 30

The Rules for Debits and Credits 30

The Chart of Accounts 32

Cash Basis versus Accrual Basis 33

The Journal Entry 33

Recording Journal Entries 38

Posting to the Ledger 40

The Trial Balance 41

Adjusting Entries 41

The Closing Process 45

Balancing the Permanent Accounts 47

Correcting Errors 47

Preparing the Financial Statements 48

Comprehensive Illustration 49

Review Questions 59

Practice Multiple Choice Questions 61

Chapter 3 Internal Controls, Cash, and Receivables 64

Learning Objectives 64

The Sarbanes–Oxley Act Requirements 65

Sarbanes–Oxley and Internal Control 66

Reporting Cash 68

The Bank Reconciliation 70

Accounts Receivable 73

Notes Receivable 77

Getting Cash for Receivables 78

Summary of Journal Entries 79

Review Questions 80

Practice Multiple Choice Questions 83

Chapter 4 Inventory 85

Learning Objectives 85

Basic Inventory Issues 86

Purchasing and Selling Inventory 89

The Cost of Goods Sold Model 91

The Periodic Method versus the Perpetual Method 92

Taking Inventory and the Cost Flow Assumptions 95

Lower of Cost or Market (LCM) 102

Impact of Inventory Errors 104

Review Questions 107

Practice Multiple Choice Questions 109

Chapter 5 Noncurrent Assets and Depreciation 113

Learning Objectives 113

Noncurrent Assets 114

Long-Term Investments 114

Property, Plant, and Equipment 116

Declining-Balance Method 121

Depreciation Conventions 123

Intangible Assets 126

Impairment 129

Accounting for Research and Development 131

Summary of Journal Entries 132

Review Questions 133

Practice Multiple Choice Questions 135

Chapter 6 Current and Noncurrent Liablities 139

Learning Objectives 139

Liabilities 140

Current Liabilities 140

Long-Term Liabilities 147

Summary of Journal Entries 154

Review Questions 155

Practice Multiple Choice Questions 158

Chapter 7 Stockholders’ Equity 160

Learning Objectives 160

Stockholders’ Equity 162

Summary of Journal Entries 173

Review Questions 174

Practice Multiple Choice Questions 176

Chapter 8 the Statement of Cash Flows 178

Learning Objectives 178

Objectives of the Statement of Cash Flows 179

Format of the Statement of Cash Flows 180

A Step-by-Step Approach to Solving Statement of Cash Flows Problems 182

Review Questions 202

Practice Multiple Choice Questions 203

Chapter 9 Review of Financial Statements and Financial Statement Analysis 205

Learning Objectives 205

Horizontal and Vertical Analysis 206

DuPont Method 207

Financial Ratio Analysis 208

Review Questions 217

Practice Multiple Choice Questions 218

Appendix A Basic College Skills 221

Learning Objectives 221

College Skills 222

Appendix B the Time Value of Money 239

Learning Objectives 239

Introduction 239

Basic Concepts 239

Making Present Value and Future Value Calculations: A Summary 245

Practice Multiple Choice Questions 260

Appendix C Gross Profit Inventory Computation 262

The Gross Profit Method 262

Appendix D Advanced Topics for Chapter Five: Capitalization Of Interest and Nonmonetary Exchanges 266

Capitalization of Interest on Self-Constructed Assets 266

Nonmonetary Exchanges 268

Appendix E The Cpa and the Auditor’s Report 272

Introduction 272

Generally Accepted Auditing Standards 273

Glossary 277

Index 299

DAVID WEINER is a Professor of Accounting at the University of San Francisco. He previously was a staff accountant for Arthur Anderson & Co. Get a better grade in financial accounting!

Accounting may be challenging, but with training and practice you can come out of your financial accounting class with the grade you want! With David Weiner’s Financial Accounting as a Second Language, you’ll get the practice and training you need to better understand fundamental principles, build confidence, and solve problems.

Here’s how you can get a better grade in financial accounting:

Understand the basic concepts

Financial Accounting as a Second Language describes the complete accounting cycle, from engaging in transactions to preparing a set of financial statements. You’ll learn how to prepare a statement of cash flows and accounting techniques for specific business transactions. By understanding these principles, you’ll have a coherent framework that will help you better understand your course.

Study more efficiently and effectively

Financial Accounting as a Second Language provides time-saving study tips and problem-solving strategies that will help you apply concepts to succeed in the course.

Improve your problem-solving skills

Financial Accounting as a Second Language will help you develop the skills you need to solve a variety of problem types––even unfamiliar ones!