- 6536789d04cb0d3a122ae1270be0917c.pdf
Financial Accounting
Ninth Edition
Walter T. Harrison Jr.
Baylor University
Charles T. Horngren
Stanford University
C. William (Bill) Thomas
Baylor University
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Library of Congress Cataloging-in-Publication Data
Harrison, Walter T.
Financial accounting / Walter T. Harrison Jr., Charles T. Horngren, C. William (Bill) Th omas. — 9th ed.
p. cm.
Includes index.
ISBN 978-0-13-275112-4 (casebound)
1. Accounting. I. Horngren, Charles T. II. Th omas, C. William. III. Title.
HF5636.H37 2013
657--dc23
Visual Walk-Through xviii
1 The Financial Statements 1
2 Transaction Analysis 59
3 Accrual Accounting & Income 135
4 Internal Control & Cash 230
5 Short-Term Investments & Receivables 283
6 Inventory & Cost of Goods Sold 337
7 Plant Assets, Natural Resources, & Intangibles 400
8 Long-Term Investments & the Time Value of Money 463
9 Liabilities 517
10 Stockholders’ Equity 581
11 The Income Statement, the Statement of Comprehensive Income, & the Statement
of Stockholders’ Equity 650
12 The Statement of Cash Flows 697
13 Financial Statement Analysis 771
Appendix A: Amazon.com 2010 Annual Report 847
Appendix B: RadioShack 2010 Annual Report 873
Appendix C: Typical Charts of Accounts for Diff erent Types of Businesses 891
Appendix D: Summary of Generally Accepted Accounting Principles (GAAP) 893
Appendix E: Summary of Differences Between U.S. GAAP and IFRS Cross Referenced
to Chapter 895
Company Index 899
Glindex 905
Chapter 1
The Financial Statements 1
Spotlight: RadioShack Corporation 1
Explain Why Accounting is the Language
of Business 3
Who Uses Accounting Information? 4
Two Kinds of Accounting: Financial Accounting
and Management Accounting 4
Organizing a Business 5
Explain and Apply Underlying Accounting Concepts,
Assumptions, and Principles 6
Th e Entity Assumption 8
Th e Continuity (Going-Concern) Assumption 8
Th e Historical Cost Principle 8
Th e Stable-Monetary-Unit Assumption 9
Apply the Accounting Equation to
Business Organizations 11
Assets and Liabilities 11
Owners’ Equity 12
Evaluate Business Operations Th rough
the Financial Statements 14
Th e Income Statement Measures Operating
Performance 14
Th e Statement of Retained Earnings Shows What a
Company Did with Its Net Income 16
Th e Balance Sheet Measures Financial Position 17
Th e Statement of Cash Flows Measures Cash Receipts and
Payments 20
Construct the Financial Statements and Analyze the
Relationships Among Th em 22
Evaluate Business Decisions Ethically 24
End-of-Chapter Summary Problem 27
Demo Doc 55
Chapter 2
Transaction Analysis 59
Spotlight: Apple, Inc. 59
Explain What a Transaction Is 60
Defi ne “Account,” and List and Diff erentiate Between
Diff erent Types of Accounts 61
Assets 61
Liabilities 61
Stockholders’ (Owners’) Equity 62
Show the Impact of Business Transactions on the
Accounting Equation 63
Example: Genie Car Wash, Inc. 63
Transactions and Financial Statements 68
Mid-Chapter Summary Problem 71
Analyze the Impact of Business Transactions on
Accounts 73
Th e T-Account 73
Increases and Decreases in the Accounts: Th e Rules of
Debit and Credit 73
Additional Stockholders’ Equity Accounts: Revenues and
Expenses 75
Record (Journalize and Post) Transactions in the
Books 76
Copying Information (Posting) from the Journal to the
Ledger 77
Th e Flow of Accounting Data 78
Accounts After Posting to the Ledger 82
Construct and Use a Trial Balance 83
Analyzing Accounts 84
Correcting Accounting Errors 84
Chart of Accounts 85
Th e Normal Balance of an Account 86
Account Formats 86
Analyzing Transactions Using Only T-Accounts 86
End-of-Chapter Summary Problem 89
Demo Doc 122
Chapter 3
Accrual Accounting & Income 135
Spotlight: Starbucks Corporation 135