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Charles Horngren
Edmund W. Littlefield Professor of Accounting, Emeritus, at Stanford University. A graduate of Marquette University, he received his M.B.A. from Harvard University and his Ph.D. from the University of Chicago. He is also the recipient of honorary doctorates from Marquette University and DePaul University.A Certified Public Accountant, Horngren served on the Accounting Principles Board for six years, the Financial Accounting Standards Board Advisory Council for five years, and the Council of the American Institute of Certified Public Accountants for three years. For six years, he served as a trustee of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board and the Government Accounting Standards Board. Horngren is a member of the Accounting Hall of Fame. A member of the American Accounting Association, Horngren has been its President and its Director of Research. He received its first annual Outstanding Accounting Educator Award. The California Certified Public Accountants Foundation gave Horngren its Faculty Excellence Award and its Distinguished Professor Award. He is the first person
to have received both awards. The American Institute of Certified Public Accountants presented its first Outstanding Educator Award to Horngren. Horngren was named Accountant of the Year, Education, by the national professional accounting fraternity, Beta Alpha Psi. Professor Horngren is also a member of the Institute of Management Accountants, from whom he has received its Distinguished Service Award. He was a member of the Institute’s Board of Regents, which administers the Certified Management Accountant examinations.
Tom Harrison
Professor Emeritus of Accounting at the Hankamer School of Business, Baylor University. He received his B.B.A. degree from Baylor University, his M.S. from Oklahoma State University, and his Ph.D. from Michigan State University. Professor Harrison, recipient of numerous teaching awards from student groups as well as from university administrators, has also taught at Cleveland State Community College, Michigan State University, the University of Texas, and Stanford University. A member of the American Accounting Association and the American Institute of Certified Public Accountants, Professor Harrison has served as Chairman of the Financial Accounting Standards Committee of the American Accounting Association, on the Teaching/Curriculum Development Award Committee, on the Program Advisory Committee for Accounting Education and Teaching, and on the Notable Contributions to Accounting Literature Committee. Professor Harrison has lectured in several foreign countries and published articles in numerous journals, including Journal of Accounting Research, Journal of Accountancy, Journal of Accounting and Public Policy, Economic Consequences of Financial AccountingStandards, Accounting Horizons, Issues in Accounting Education, and Journal of Lawand Commerce. Professor Harrison has received scholarships, fellowships, and research grants or awards from PriceWaterhouse Coopers, Deloitte & Touche, the Ernst & Young Foundation, and the KPMG Foundation
M Suzanne Oliver
M. Suzanne Oliver is an assistant professor of accounting at Northwest Florida State College in Niceville, Florida. She received her B.A in Accounting Information Systems and her Masters in Accountancy from the University of West Florida.
Professor Oliver began her career in accounting in the tax department of a regional accounting firm, specializing in benefit plan administration. She has served as a software analyst for a national software development firm (CPASoftware) and as the Oracle Fixed Assets Analyst for Spirit Energy, formerly part of Union Oil of California.(Unocal). A Certified Public Accountant, Oliver is a member of the Florida Institute of Certified Public Accountants.
Professor Oliver has taught Financial Accounting, Managerial Accounting, Intermediate Accounting, Tax Accounting, Accounting Software Applications, Payroll Accounting, Auditing, Accounting Systems, Advanced Accounting, Managerial Finance, Business Math, and Supervision. She has also taught Pension continuing education classes for CPAs and has developed and instructed online courses using myaccountinglab.com, WebCT, and other proprietary software.
Professor Oliver lives in Niceville where she is a member if the First United Methodist Church with her husband Greg and son C.J.. '
Financial and Managerial Accounting - Financial, Volume I Chapter 1-13 1/e
Horngren/Harrison/Braun
Table of Contents
1) Accounting and the Business Environment
· Describe the modern business environment and the role of information in that environment.
· Define accounting and its role in creating financial information.
· Describe the corporate form of business.
· Describe basic accounting principles and concepts
· Describe the fundamental accounting equation and its components.
· Use the fundamental accounting equation to record and summarize transactions.
· Develop an income statement, statement of retained earnings, statement of cash flows and a balance sheet from the summary of transactions.
2) Recording Business Transactions
· Describe the basic tools of an accounting system, the account, the ledger, and the journal.
· Describe the double-entry system and define debits and credits.
· Explain the flow of information through an accounting system by use of journals and ledgers.
· Explain the purpose and use of source documentation in the accounting system.
· Prepare trial balances and explain their use and limitations
3) The Adjusting Process
· Define accrual accounting and distinguish between accrual and cash-based accounting.
· Describe the basic concepts underpinning accrual accounting, including the time-period concept, revenue recognition rules and the matching principle.
· Define and distinguish between prepaid expenses and accrued expenses.
· Describe and utilize the process of adjusting account balances.
· Prepare an adjusted trial balance.
· Use an adjusted trial balance to prepare financial statements.
4) Completing the Accounting Cycle
· Identify the principles of accounting system design.
· Describe the sequence of the accounting cycle.
· Describe the purpose of closing entries and record those entries.
· Prepare a post-closing trial balance.
· Use a post-closing trial balance to develop a classified balance sheet, distinguishing between current and long-term assets, current and long-term liabilities, contributed capital and retained earnings.
· Use a classified balance sheet to evaluate liquidity and leverage of a corporation.
5) Merchandising Operations
· Distinguish between a merchandising business and a service business.
· Describe the flow of inventory through a merchandising business.
· Record transactions involving the purchase and sale of inventory using a perpetual inventory system.
· Prepare a merchandiser’s multi-step income statement.
· Evaluate the performance of merchandiser by calculating gross profit margin, net profit margin and inventory turnover.
· Appendix – Periodic inventory systems.
6) Merchandise Inventory
· Define inventory costs and distinguish between cost flow and goods flow.
· Describe different inventory valuation methods and their impact on financial statements and cash flow.
· Use FIFO, LIFO, Average-cost and Specific Identification methods to value inventory, calculate cost of goods sold, and determine net income.
· Use the lower of cost or market rules to value inventory.
· Estimate the value of inventories using different methods.
7) Internal Control and Cash
· Define cash and describe internal control procedures involving cash.
· Describe the modern banking environment and the use of electronic payment and disbursement processes.
· Describe the accounting procedures for electronic payment systems.
· Describe the bank reconciliation process and reconcile cash accounts to banking statements.
· Describe other internal control and auditing standards and procedures.
8) Receivables
· Describe internal control procedure for receivables.
· Explain the concept and use of the allowance method to account for uncollectible accounts.
· Explain the concept and use of the direct write-off method to account for uncollectible accounts.
· Describe the process of accounting for credit-card, bankcard and debit-card sales.
· Define notes receivable and explain the process of accounting for notes receivable.
· Understand the process and impact of discounting notes receivable.
· Understand how to use accounting information, including the acid test (quick) ratio and the days’ sales in receivables, to make critical business decisions. Evaluate liquidity using quick ratios, receivable turnover, accounts receivable aging and days’ sales outstanding.
9) Plant Assets and Intangibles
· Account for the costs of plant assets.
· Define depreciation, journalize an adjusting entry to record depreciation, and compute depreciation expense, using the straight-line, declining balance, and production methods.
· Apply the matching rule to the allocation of costs for capital and revenue expenditures. Calculate the impact of changes in depreciation estimates.
· Record transactions for the disposal, sale and exchange of plant assets.
· Record transactions for the costs and allocation of costs for intangible assets.
· Appendix - Record transactions for the costs and allocation of costs for natural resources.
10) Current Liabilities and Payroll
· Describe current liabilities and reporting requirements for current and long-term liabilities. Define the current portion of long-term liabilities.
· Record transactions for accounts payable and accrued expenses
· Record transactions for sales taxes and payroll taxes.
· Record transactions for notes payable and interest expense.
· Record transactions for estimated liabilities and expenses.
· Describe contingent liabilities and the full disclosure principle
11) Corporations: Paid-In Capital and the Balance Sheet
· Define a corporation and describe the characteristics of corporations.
· Identify the components of stockholders' equity.
· Record transactions for the issuance of common stock and preferred stock.
· Record transactions for dividends paid to holders of common and preferred stock.
· Record transactions for purchase and resale of treasury stock.
· Define and compute book value of common stock.
· Compare book value to market value of common stock.
· Evaluate financial performance using return on assets and return on equity.
12) Corporations: Retained Earnings and the Income Statement
· Identify the issues related to evaluating the quality of a company's earnings.
· Calculate earnings per share and a price/earnings ratio.
· Define and explain prior period adjustments and comprehensive income.
· Account for stock dividends and stock splits.
· Prepare a statement of stockholders' equity.
· Evaluate the effects of stock splits, stock and cash dividends, treasury stock transactions, and the acquisition of assets on a corporation’s financial statements and performance measures
13) Long-Term Liabilities
· Explain the purpose and use of using long-term liabilities to finance investment in long-term assets.
· Evaluate financial leverage using different measures.
· Calculate payments, debt reduction and interest expense for installment notes and mortgages.
· Record transactions involving installment notes and mortgages.
· Describe the major characteristics of bonds payable. Utilize various sources to identify types, prices and credit ratings of various types of bonds.
· Record transactions for the issuance of bonds at face value, at a discount, and at a premium.
· Record transactions for the recording of bond interest expense using the straight-line method.
· Record transactions for the retirement of bonds and the conversion of bonds into stock.