Transaction Analysis Template

A major innovation in this text is that, unlike traditional introductory financial accounting textbooks, we do not focus on debits and credits. Because our objective is to help students understand how to read and interpret financial statements, we do not emphasize financial statement preparation, which requires knowledge of the system of debits and credits. While we describe debits and credits in Appendix C (The Language of Accountants: Debits and Credits), the book does not require students to learn the system of debits and credits. Dropping the emphasis on debits and credits frees up time for instructors to focus on teaching students to understand how to interpret and analyze financial reports. This contrasts sharply with traditional introductory textbooks which focus primarily on teaching students how to prepare financial statements.

In place of debits and credits, the book uses a creative new tool that is designed to teach students how economic transactions translate into the financial reports. This tool is called the “Transaction Analysis Template” (or TAT, for short). The TAT is an abbreviated version of a horizontal worksheet and provides students with a "shorthand" way of understanding and interpreting accounting reports. Once students learn the basic structure of a balance sheet and income statement, the TAT becomes a simple and highly intuitive technique for learning financial accounting,

Appendix C

For faculty who want students to be conversant in the mechanics of accounting, debits and credits are discussed in Appendix C, The Language of Accountants: Debits and Credits.

Real Companies' Financial Statements

A feature that really brings accounting alive for students is seeing the accounting practices and reports of companies with which they are familiar. To this end, each chapter incorporates examples using real companies that students know. For example, we discuss accounting issues related to Google, Apple, Microsoft, Amazon, Target, Krispy Kreme, MGM Resorts, and many others.

Real Data and Examples

Each chapter includes an assignment called Beyond the Numbers that requires students to use year-end financial statements of Columbia Sportswear and Under Armour.

Accounting in Practice

Boxed inserts are included throughout the text to help bridge the gap between the classroom and what students encounter in the real world. Accounting In Practice illustrations document situations a reader is likely to encounter and present the choices that companies make in reporting financial results.

Forensic Accounting

These boxed inserts help students understand how financial accounting knowledge can be used to aid in the prevention and detection of accounting errors and fraud.

Corporate Social Responsibility

Increasingly, companies have found that “doing good” leads to a more successful, profitable enterprise. These boxed inserts help students understand how corporate social responsibility is being embraced by forward-thinking enterprises as part of their long-term business models.

Organized for Student Success

To help students succeed in the course, we include many features that provide direction to students and require them to recall and apply the financial accounting techniques and concepts described in each chapter. 

Putting Each Chapter in Context

Often students lose sight of the big picture. The Past/Present/Future feature provides students with an overview of where the chapter fits within the whole course.

Mapping Each Chapter

Each chapter begins with a Road Map highlighting the chapter's learning objectives and corresponding eLecture videos, Guided Example videos, and assignments. The Chapter Organization provides an overview that visually depicts the layout of the chapter.

Rview

Review boxes are integrated throughout each chapter as a means of reinforcing the material just presented. Solutions are provided at the end of the chapter so students can check their work. Each Review has a corresponding Guided Example video created by the author, walking through how to solve the problem for students.

A.K.A. Notations

A.K.A., Also Known As, Notations inform students of commonly used alternative terms that they may encounter. 

Takeaways

These in-chapter summaries ensure that students grasp key concepts before proceeding to the next topic.

Ethics

In today's post-Sarbanes-Oxley world, ethical decision-making has never been more pertinent to business and students studying accounting. We discuss ethics where appropriate in the text, and we have included at least one assignment in each chapter that raises an ethical issue. Assignments involving ethics are identified by the icon in the margin.

International Financial Reporting Standards (IFRS)

IFRS Alerts

Most public companies outside of the U.S. use International Financial Reporting Standards in preparing their financial reports, including many companies that list on U.S. stock exchanges. Thus, it is important to provide students with a basic understanding of the similarities and differences in the current reporting requirements and methods under U.S. GAAP and IFRS. Consequently, we incorporate discussions that examine these similarities and differences where appropriate throughout the book in IFRS Alert! boxes. 

Thinking Globally

In addition to IFRS Alert! boxes, these Thinking Globally inserts emphasize the similarities and differences between the United States and other countries that are not necessarily related to reporting standards. 

• myBusinessCourse: Our online learning and assessment program intended to complement textbook and faculty instruction. See below for more information about myBusinessCourse (MBC).
• Chapter 1 has been updated and streamlined: Due to the increased interest in Big Data and Block Chain technology, a new section has been added that describes and discusses these topics. In order to eliminate redundancies the Conceptual Framework appendix has been removed from this chapter and much of that discussion is now included in Chapter 4.
• Transaction analysis template revision: The template, first introduced in chapter 2, has been updated to better reflect the separation of the balance sheet and income statement. The stockholders’ equity section has been refined and now clearly distinguishes contributed capital from retained earnings.
• Revenue recognition principle: This discussion has been updated and expanded to reflect the new revenue recognition standards.
• Chapter 5 has been updated and streamlined: Discussion about SOX has been expanded and the discussion on COSO Control Activities has been streamlined and condensed.
• Chapter 7 has been updated: To reflect changes in accounting standards, the discussion of lower of cost or market (LCM) has been replaced with a discussion of lower of cost or net realizable value (LCNRV). Additionally, the section on errors in inventory count has been expanded to include a discussion of a bloated balance sheet.
• Chapter 8 has been streamlined: Discussions of Depreciation Method Changes and Impairment Losses have been streamlined and the section on Package Purchases has been deleted.
• Chapter 9 has been updated and streamlined: Accounting for Leases has been updated to reflect recent rule changes, including the capitalization of virtually all leases and the “right to use” terminology. Discussions and examples of Sales and Excise Taxes Payable and Payroll-related Liabilities have been removed for a more concise discussion of current liabilities. Also deleted are discussions of the issuance of bonds between interest dates and the retirement of bonds before maturity.
• Appendix C Financial Statements for Tesco PLC have been deleted: The discussion of IFRS has been streamlined throughout the text. IFRS Alerts are still included where applicable.
• Appendix F has moved to Appendix C: The debits and credits appendix has been expanded to include the entire accounting cycle.

myBusinessCourse: A web-based learning and assessment program intended to complement your textbook and classroom instruction. This easy-to-use course management system grades homework automatically and provides students with eLecture and Guided Example videos to assist them in mastering the material.  In addition, detailed diagnostic tools assess class and individual performance. myBusinessCourse is ideal for online courses or traditional face-to-face courses for which you want to offer students more resources to succeed. MBC integrates with Canvas, BlackBoard, D2L, Sakai, and other LMS platforms.

Solutions Manual: Created by the author, the Solutions Manual contains complete solutions to all the assignment material in the text.

Test Bank/Computerized Test Bank: The test bank includes multiple-choice items, matching questions, short-essay questions, and problems.  The computerized version of the test bank enables an instructor to add and edit questions; create up to 99 versions of each test; attach graphic files to questions; import and export AsCii files; and select questions based on type or learning objective.  It provides password protection for saved tests and question databases and is able to run on a network.

PowerPoint: Created by the author, the PowerPoint slides outline key elements of each chapter.