Introduction to Accounting

`Introduction to Accounting has already stood the test of time, and this new and improved third edition will ensure that it remains one of the best, if not the "best ever" introductory textbooks on accounting′- Michael Sherer, University of Essex`I think the book admirably achieves the authors′ objective of providing an introduction to accounting which embraces both the basic techniques and the underlying theoretical concepts′- Accounting and Business Research`…an excellent book which should be compulsory reading for all first year students on accounting degree courses′- Association of Banking Teachers Bulletin

• THE FRAMEWORK OF ACCOUNTINGThe Accounting ProcessSuppliers of Accounting InformationFinancial Accounting and Management Accounting ComparedExternal Users of Accounting InformationPrincipal Accounting StatementsTHE BALANCE SHEETThe Entity ConceptClassification of Assets and Sources of FinanceThe Accounting Equation: A Further IllustrationRaising Further FinanceThe Investment Decision Business DevelopmentThe Trading CycleReporting Changes in Owner′s CapitalAssets = Capital + LiabilitiesValuation of AssetsPROFIT CALCULATED AS THE INCREASE IN CAPITALProfitable ActivityProfit and Changes In Gross AssetsBalance Sheet Presentation: Vertical FormatProfits, Losses and Changes In Net AssetsProfit Measured By Capital ChangesCapital Injections and WithdrawalsTHE PREPARATION OF ACCOUNTS FROM CASH OR INCOMPLETE RECORDSAccounting Systems and Information RequirementsThe Matching ConceptGross Profit and Net ProfitThe Problem of Periodic Profit CalculationThe Identification of Revenue: The Realization ConceptMatching Expenditure With Revenue: The Benefit PrincipleThe Preparation of Accounts From Cash Records: A Worked ExampleClubs and SocietiesTHE DOUBLE ENTRY SYSTEM IThe Inital Recording of TransactionsIntroductionCash FlowsFlows Of Goods And ServicesTHE DOUBLE ENTRY SYSTEM IILedger Accounts and the Trial BalanceIntroductionThe Interlocking Effect of TransactionsLedger AccountsBooks of Prime EntryControl Accounts For Debtors and CreditorsThe Trial BalanceComputerized Accounting SystemsAdvantages of Double EntryTHE DOUBLE ENTRY SYSTEM IIIPeriodic Accounting ReportsPeriodic AccountsAdjustments To The Trial BalanceStocks (Inventories)DepreciationDisposal of Fixed AssetsPrepayments and AccrualsBad DebtsThe Adjusted Trial BalanceASSET VALUATION, PROFIT MEASUREMENT AND THE UNDERLYING ACCOUNTING CONCEPTSAsset Valuation and Profit MeasurementTangible Fixed AssetsIntangible Fixed AssetsStock Valuation MethodsAccounting ConceptsPARTNERSHIPSIntroductionThe Partnership AgreementThe Creation of A PartnershipThe Division of ProfitCapital and Current AccountsChanges in MembershipChange in Profit-Sharing RatioDissolution of PartnershipsCOMPANY ACCOUNTSFormation of Registered CompaniesThe Annual ReportOther Sources of InformationShare CapitalShare Premium AccountShare ForfeitureThe Rights IssueLoan Capital and DebenturesThe Appropriation AccountRevaluation ReserveRedemption of DebenturesBonus (Capitalization, Scrip) Issue of SharesReporting Financial Performance (FRS 3)Groups of CompaniesGoodwill and Intangible Assets (FRS 10)Research and Development (SSAP 13)Limitations of Company AccountsINTERPRETATION OF ACCOUNTSThe Cash Flow StatementIntroductionFormatStatement ConstructionSome Complexities of The Cash Flow StatementInterpretation using The Cash Flow StatementINTERPRETATION OF ACCOUNTSRatio AnalysisThe Need for Profit and CashPrinciples of Ratio AnalysisClassification of Accounting RatiosReturn on Capital EmployedProfit RatiosSolvency RatiosAsset Turnover RatiosRelationship Between Accounting RatiosGearing (or Leverage)Cash Flow Statement RatiosLimitations of Accounting RatiosLinking Together Cash Flow Analysis and Ratio AnalysisDECISION-MAKINGIntroductionCost BehaviourTotal Costing and Overhead Recovery RatesInvestment AppraisalForecast ResultsSTANDARD COSTING AND BUDGETARY CONTROLIntroductionBudgetary ControlPreparation of BudgetsStandard CostingCalculation of VariancesEnd of chapter questions (After each chapter)Solutions to activities (After each chapter)