This bestselling book has helped countless readers advance in their careers by gaining a practical set of skills and the confidence needed to use those skills effectively in making business decisions. The fifth edition begins by presenting a macro view of accounting information, taking readers through real financial statements. They'll quickly discover how these statements communicate the financing, investing, and operating activities of a business to users of accounting information. Kimmel, Weygandt, and Kieso also arm readers with a Decision Toolkit consisting of a finite set of tools necessary to make intelligent business decisions based on financial information. The integration of this toolkit and the use of financial statements for decision-making makes this one of the most user-oriented books available today.

Financial Accounting, 5^thEditionprovides students with an understanding of fundamental concepts necessary to use accounting effectively. Starting with a “macro” view of accounting information, the authors present real financial statements. They establish how a financial statement communicates the financing, investing, and operating activities of a business to users of accounting information. Kimmel, Weygandt and Kieso motivate students by grounding the discussion in the real world, showing them the relevance of the topics covered to their future.

Paul D. Kimmel, PhD, CPA,received his bachelor’s degree from the University of Minnesota and his Ph.D. from the Univ. of Wisconsin. He is an Associate Professor at the Univ. of Wisconsin—Milwaukee, and has public accounting experience with Deloitte & Touche (Minneapolis). He was the recipient of the UWM School of Business Advisory Council Teaching Award and the Reggie Taite Excellence in Teaching Award, and is a 3-time winner of the Outstanding Teaching Assisting Award at the Univ. of Wisconsin. He is also a recipient of the Elijah Watts Sells Award. He is a member of the American Accounting Association and has published articles in Accounting Review, Accounting Horizons, Advances in Management Accounting, Managerial Finance, Issues in Accounting Education, Journal of Accounting Educationand more.

CHAPTER 1: INTRODUCTION TO FINANCIAL STATEMENTS.

Knowing the Numbers.

Forms of Business Organization.

Users and Uses of Financial Information.

Business Activities.

Communicating with Users.

A Quick Look at Tootsie Roll’s Financial Statements.

CHAPTER 2: A FURTHER LOOK AT FINANCIAL STATEMENTS.Just Fooling Around?

The Classified Balance Sheet.

Using the Financial Statements.

Keeping an Eye on Cash.

Financial Reporting Concepts.

CHAPTER 3: THE ACCOUNTING INFORMATION SYSTEM.

Accidents Happen.

The Accounting Information System.

Accounting Transactions.

The Account.

Steps in the Recording Process.

The Recording Process Illustrated.

The Trial Balance.

Keeping an Eye on Cash.

CHAPTER 4: ACCRUAL ACCOUNTING CONCEPTS.

What Was Your Profit?

Timing Issues.

The Basics of Adjusting Entries.

The Adjusted Trial Balance and Financial Statements.

Closing the Books.

Quality of Earnings.

Appendix: Adjusting Entries in an Automated World—Using a Worksheet.

CHAPTER 5: MERCHANDISING OPERATIONS AND THE MULTIPLE-STEP INCOME STATEMENT.

Who Doesn’t Shop at Wal-Mart?

Merchandising Operations.

Recording Purchases of Merchandise.

Recording Sales of Merchandise.

Income Statement Presentation.

Evaluating Profitability.

Keeping an Eye on Cash.

Appendix: Periodic Inventory System.

Recording Merchandise Transactions.

Recording Purchases of Merchandise.

Recording Sales of Merchandise.

Comparison of Entries—Perpetual vs. Periodic.

CHAPTER 6: REPORTING AND ANALYZING INVENTORY.

Where Is That Spare Bulldozer Blade?

Classifying Inventory.

Determining Inventory Quantities.

Inventory Costing.

Keeping an Eye on Cash.

Analysis of Inventory.

Appendix 6AInventory Cost Flow Methods in Perpetual Inventory Systems.

First-In, First-Out (FIFO).

Last-In, First-Out (LIFO).

Average Cost.

Appendix 6B Inventory Errors.

Income Statement Effects.

Balance Sheet Effects.

CHAPTER 7: FRAUD, INTERNAL CONTROL, AND CASH.

Minding the Money in Moose Jaw.

Fraud and Internal Control.

Cash Controls.

Control Features: Use of a Bank.

Reporting Cash.

Managing and Monitoring Cash.

Keeping an Eye on Cash.

Appendix Operation of the Petty Cash Fund.

Establishing the Petty Cash Fund.

Making Payments from Petty Cash.

Replenishing the Petty Cash Fund.

CHAPTER 8: REPORTING AND ANALYZING RECEIVABLES.

A Dose of Careful Management Keeps Receivables Healthy.

Types of Receivables.

Accounts Receivable.

Notes Receivable.

Financial Statement Presentation of Receivables.

Managing Receivables.

Keeping an Eye on Cash.

CHAPTER 9: REPORTING AND ANALYZING LONG-LIVED ASSETS.

A Tale of Two Airlines.

Section 1 Plant Assets.

Determining the Cost of Plant Assets.

Accounting for Plant Assets.

Analyzing Plant Assets.

Section 2 Intangible Assets.

Accounting for Intangible Assets.

Types of Intangible Assets.

Financial Statement Presentation of Long-Lived Assets.

Keeping an Eye on Cash.

Appendix: Calculation of Depreciation Using Other Methods.

Declining-Balance.

Units-of-Activity.

CHAPTER 10: REPORTING AND ANALYZING LIABILITIES.

And Then There Were Two.

Current Liabilities.

Bonds: Long-Term Liabilities.

Accounting for Bond Issues.

Accounting for Bond Retirements.

Financial Statement Presentation and Analysis.

Keeping an Eye on Cash.

Analysis.

Off-Balance-Sheet Financing.

Appendix 10A:Straight-Line Amortization.

Amortizing Bond Discount.

Amortizing Bond Premium.

Appendix 10B:Effective-Interest Amortization.

Amortizing Bond Discount.

Amortizing Bond Premium.

Appendix 10C: Accounting for Long-Term Notes Payable.

CHAPTER 11: REPORTING AND ANALYZING STOCKHOLDERS’ EQUITY.

What’s Cooking?

The Corporate Form of Organization.

Stock Issue Considerations.

Accounting for Treasury Stock.

Preferred Stock.

Dividends.

Retained Earnings.

Financial Statement Presentation of Stockholders’ Equity.

Keeping an Eye on Cash.

Measuring Corporate Performance.

Appendix: Entries for Stock Dividends.

CHAPTER 12: STATEMENT OF CASH FLOWS.

Got Cash?

The Statement of Cash Flows: Usefulness and Format.

Preparation of the Statement of Cash Flows—Indirect Method.

Using Cash Flows to Evaluate a Company.

Keeping an Eye on Cash.

Appendix: Statement of Cash Flows—Direct Method.

Step 1: Operating Activities.

Step 2: Investing and Financing Activities.

Step 3: Net Change in Cash.

CHAPTER 13: FINANCIAL ANALYSIS: THE BIG PICTURE.

Making the Numbers.

Sustainable Income.

Comparative Analysis.

Ratio Analysis.

Quality of Earnings.

Appendix: Comprehensive Illustration of Ratio Analysis.

Liquidity Ratios.

Solvency Ratios.

Profitability Ratios.

APPENDIX A: Specimen Financial Statements: Tootsie Roll Industries, Inc.

APPENDIX B: Specimen Financial Statements: Hershey Foods Corporation.

APPENDIX C: Time Value of Money.

APPENDIX D: Reporting and Analyzing Investments.