Accounting in Business
5th Edition
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Description
Accounting in Business, Fifth Edition provides a concise discussion of accounting concepts and integrates accounting theories to applications. The book is comprised of 20 chapters that are organized into four parts. The text first presents the scope and environment of business accounting, and then proceeds to covering the theories and practice of financial accounting. The coverage of the book includes bookkeeping; the valuation and depreciation of fixed assets; and capital structure and financial reporting. Next, the title reviews the planning and control aspects of finance, which include budgets and budgetary control; management of working capital; and performance analysis. The last part deals with the relationship between accounting and society. The book will be of great use to undergraduate students and professionals of accounting.
Table of Contents
I The Accounting Environment
1 The Scope and Environment of Business Accounting
The Scope of Business Accounting
The Nature and Place of Accounting Theory
Accounting in Historical Perspective
Further Reading
Questions for Discussion
II Financial Accounting Theory and Practice
2 The Balance Sheet
The Accounting Environment
The Environmental Postulates
Business Entity
The Balance Sheet
The Nature of Assets
The Valuation of Assets
The Nature of Outside Liabilities
The Balance Sheet Equation
Further Reading
Questions for Discussion
3 Income Measurement—Expense
The Nature of Profit
The Accrual Postulate
The Accounting Period
Definitions
The Relationship between Cost and Expense
The Accounting Equation
Recording Transactions in the Quadrant
The Income Statement and Balance Sheet
Further Reading
Questions for Discussion
4 Income Measurement—Revenue
The Nature of Revenue
The Realization Postulate
'Revenue' and 'Receipts'
Debtors, Bad Debts and Doubtful Debts
Gross and Net Profit
The Trading, Profit and Loss Account
Accounting and Economic Profit
The Assumptions and Conventions of Accounting
Appendix—The Effect of Revenue Recognition on Reported Profit
Further Reading
Questions for Discussion
5 Accounting Records—An Introduction to Bookkeeping
Analysis of Transactions using the Quadrant
Debit and Credit
The Account
Analysis of Transactions using Accounts
The Trial Balance
The Trading, Profit and Loss Account
The Position of Stock
Asset and Liability Accounts
The Balance Sheet
Accruals and Prepayments
Provisions
The Journal and Day Books
The Accounting Process
The Sources of Financial Data
Further Reading
Questions for Discussion
6 Income Measurement—The Valuation and Depreciation of Fixed Assets
The Nature of Depreciation
The Cost of the Asset
The Useful Life of the Asset
The Salvage (Residual) Value of the Asset
The Method of Depreciation
Accounting for Depreciation
Accounting for the Disposal of Fixed Assets
Valuation of Fixed Assets
Further Reading
Questions for Discussion
7 Income Measurement—The Valuation of Current Assets
The Valuation of Stock
The Nature of Stock
The Bases of Stock Valuation
Accounting and Stock Valuation
Historic Cost
Historic Cost—Comparison of Methods
The Valuation of Debtors
Further Reading
Questions for Discussion
8 Further Aspects of Financial Records
Incomplete Records
Control Accounts
Verification of the Bank Account
Matrix Accounting
Further Reading
Questions for Discussion
9 The Partnership
The Nature of Partnership
The Proprietary Theory
The Partnership Agreement
The Final Accounts
Capital and Current Accounts
The Admission of New Partners—the Valuation of Goodwill
The Admission of New Partners—the Treatment of Goodwill
Partnership Dissolution
Further Reading
Questions for Discussion
10 The Public Limited Company—Capital Structure and Financial Reporting
The Public Limited Company, Partnership and Sole Trader—A Comparison
Memorandum and Articles
Shares and Share Capital
Par Value and Market Value
Share Premium
Debentures
Capitalization
Capital Gearing
Reserves—Their Purpose
Types of Reserve
Dividends
Accounting Records and the Capital Structure
Valuation of Shares
The Final Accounts of Public Limited Companies
Disclosure in Company Accounts
Statutory Requirements and Published Accounts
Further Reading
Questions for Discussion
11 The Limited Company—Changes in Capital Structure and Groups of Companies
Changes in Capital Structure
Groups of Companies
Further Reading
Questions for Discussion
12 Value and Income Measurement
Concepts of Value
Value to the Business
The Nature of Income—An Economic View
Income Measurement in Accounting
Income Measurement and Inflation
The Nature of Price Changes
Partial Solutions to Changing Price Levels
Adjustments for General Price Changes
Current Cost Accounting—The Sandilands Proposals and ED 18
SSAP 16—Current Cost Accounting
SSAP 16—Practice and Criticism
Further Reading
Questions for Discussion
III Financial Planning and Control
13 Elements of Cost Accounting
The Meaning of Cost
The Elements of Cost
Financial Records and Cost Flow
Income Statements for Manufacturing Businesses
Responsibility Accounting
Accounting for Materials
Accounting for Labor
Accounting for Overhead
Absorption Costing
Marginal Costing
Cost Accounting Systems—Job Costing
Cost Accounting Systems—Process Costing
Absorption and Marginal Costing Compared
Further Reading
Questions for Discussion
14 Budgets and Budgetary Control
Planning and Control
The Management Process
The Nature of Budgets
Budgets—Objectives and Benefits
Budgets and Behavior
The Framework and Construction of Budgets
Profit Budgets—The Sales Budget
Profit Budgets—The Production Budget
Profit Budgets—Administration, Finance and Selling Budgets
Budgeted Income Statement
Flexible Budgets
Resource Budgets
Budget Review
Budgetary Models
Further Reading
Questions for Discussion
15 Standard Costs and Variance Analysis
Nature and Purpose of Standard Costs
The Setting of Standards
Variance Computation and Analysis
Material Variances
Labor Variances
Overhead Variances
Sales Variances
Summary of Variance Formula
Recording Standard Costs
Standards and Probability
Further Reading
Questions for Discussion
16 Accounting for Business Decisions—The Capital Investment Decision
Business Objectives
The Decision-Making Process
Capital Investment Decisions
Net Present Value and Yield Methods Compared
The Cost of Capital
Taxation and the Investment Proposal
Capital Investment and Risk
Further Reading
Questions for Discussion
17 Accounting for Business Decisions—Short-term Decisions
Costs and Decision-Making
'Make or Buy' Decisions
'Continue or Abandon' Decisions
'Pricing' Decisions
Limiting Factors
Break-Even Analysis
Operational Research
Further Reading
Questions for Discussion
18 The Management of Working Capital
The Working Capital Cycle
The Investment in Stock
The Investment in Debtors
Types of Debtors
The Determinants of Investment in Debtors
The Need for Cash
Further Reading
Questions for Discussion
19 Performance Analysis
Business Objectives
The Tools of Performance Analysis
Tests of Profitability
Profitability and Capital Structure
Tests of Liquidity
Investment Ratios
Cash Flow Analysis
Bases for Comparison
Problems of Analysis and Comparison
Summary
Further Reading
Questions for Discussion
IV Accounting and Society
20 Accounting and Society
The Accounting Environment
The 'Quality of Life'
The Extent of Social Responsibility in Business
Accounting and Social Responsibility
Developments in Accounting Practice
Further Reading
Questions for Discussion
Suggested Solutions to Numerical Questions
Index
Details
- No. of pages:
- 566
- Language:
- English
- Copyright:
- © Butterworth-Heinemann 1984
- Published:
- 1st January 1968
- Imprint:
- Butterworth-Heinemann
- eBook ISBN:
- 9781483105741
About the Author
R. J. Bull
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