Survey of accounting

Описание

iv Survey of Accounting
● SUCCESS HAPPENS FOR A REASON
This textbook emerged as a market leader within a short time frame because it provides
a more effective teaching methodology. Here is what sets us apart from our competitors.
● LINKING INDIVIDUAL ACCOUNTING EVENTS
WITH FINANCIAL STATEMENTS
A horizontal financial statements model replaces the accounting equation as the
predominant teaching platform in this text. The model arranges the balance sheet,
income statement and statement of cash flows horizontally across a single line of text
as shown below. The linkage between business events and financial statements is developed by having students record the effects of transaction data directly into the model.
The acquisition of cash from the issue of stock is shown as an example in the following
model (N/A indicates not affected; FA abbreviates financing activities):
Assets 5 Liabilities 1 Stockholders’ Equity Revenue 2 Expense 5 Net Inc. Cash Flow
1 N/A 1 N/A N/A N/A 1 FA
The statements model enables students to more clearly see how accounting relates to
real-world decision making. Under the traditional approach, students learn to journalize a
series of events and to present summarized information in financial statements. They
never see how individual transactions affect financial statements. When students record
transactions into a statements model, they see a direct link between business events
and financial statements. Most business people think, “if I take this particular action,
how will it affect my financials,” not “if I do these fifteen things how will they be journalized.” Accordingly, the statements model approach provides a learning experience that
is more intuitive and relevant than the one provided by traditional teaching methodology.
● BROAD BASED USER FOCUS
Individual event analysis also broadens the user focus to include internal as well as
external users. Typically, a user oriented approach focuses on external users such as
investors and creditors. Certainly, investors and creditors need to understand how events
affect financial statements. Anticipating future business events and their impact on financial performance is a major factor in evaluating investment opportunities and credit
worthiness. Since business executives (internal users) are dependent on investors and
creditors to provide funding for their operations, they too are interested in how events
affect financial statements. Indeed, executives make few decisions without considering
how those decisions affect “bottom line” financial performance measures. Accordingly,
focusing on how individual transactions affect financial statements encourages students
to develop an internal as well as external user focus.
● A UNIQUE APPROACH TO THE STATEMENT OF CASH FLOWS
We provide comprehensive coverage of the statement of cash flows. Cash flow coverage
starts in Chapter 1 and continues in every chapter throughout the text. With respect
to scope of coverage, this text places the statement of cash flows on parity with the income statement and balance sheet. While the statement of cash flows is critically important in the real world, coverage of the statement is often slighted and usually relegated to
“The alternative
approach to debits and
credits used in the text
to present transactions
the Horizontal Financial
Statement Model is
one that my students
can understand and
can work with in the
classroom and for
testing.”
ROBERT PATTERSON,
PENN STATE-ERIE
“I heartily applaud
the authors’ goal of
providing students
with a concepts-based
approach rather than
a strictly procedurebased approach to
be an important
contribution to
improving accounting
education, one that
appeals to both users
and preparers and
that enables students
to ‘read between
the lines.’”
MICHAEL R. DODGE,
COASTAL CAROLINA
COMMUNITY COLLEGE
“Well written and
easy to read text that
makes the study of
accounting attractive.
The layout of the text,
the colors used, the
additional information
and real-life examples
all increase the appeal
of this text.”
VIVIAN WINSTON,
INDIANA UNIVERSITY
NOTE FROM THE AUTHORS
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