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Intermediate Accounting, 4e

by Hanlon, Hodder, Nelson, Roulstone, Dragoo

| ISBN: 9781618536761 | Copyright 2026

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Welcome to the Fourth Edition of Intermediate Accounting

This product is the result of extensive market research that included both faculty and students. We created this learning system because, as educators, we didn’t feel that the existing textbooks in the intermediate market recognized how the study habits of today’s students have evolved, nor did we feel that existing textbooks fully embraced the power of technology in the learning process. This product is not so much a textbook as it is an integrated learning system. Although the print textbook can be used on its own, we created extensive digital resources that integrate with and complement the print book.

The emphasis in our approach is to provide students with a demonstration and review problem for each key learning objective. In this way, students see the application of concepts through a step-by-step illustration and then have the opportunity to immediately practice similar review problems electronically in myBusinessCourse (MBC), our online homework platform. In addition, MBC contains hundreds of instructional videos that were created by the authors. There are four general categories of videos: concept overviews, demonstration videos, worked-out review problems, and highlights & tips videos. With nearly 1,000 author-created videos, our text has broad appeal among the YouTube/TikTok generation as confirmed by our adopter feedback. The combination of textbook, videos, and online practice comprise an active learning system that recognizes and embraces how today’s students prefer to learn and provides students with the tools to master intermediate accounting.

Our approach steers away from dense text (which the average student is not reading) and moves to an active-learning approach where content is delivered in short bursts followed by immediate practice. Because each learning objective for every chapter is self-contained, faculty have the flexibility to pick and choose learning outcomes.

We note the need in the market for a direct incorporation of authoritative guidance. Although other intermediate accounting textbooks include some references to the FASB’s standards in a footnote to a chapter, direct citations are rarely included. In our approach, we provide succinct yet thorough, to-the-point explanations along with direct citations of the most relevant references from the Codification. Direct citations best prepare the intermediate accounting student, who will often reference and cite the authoritative standards in practice. This novel approach of combining active-learning with real-life authoritative guidance best prepares intermediate accounting students for life in practice.

Target Audience

As the title suggests, Intermediate Accounting is intended for use following the introductory financial accounting course at either the undergraduate or graduate level. This book supports an intermediate accounting series offered to accounting and finance majors, typically in a two-course sequence (three-course series in some cases). The topics in intermediate accounting are relevant to approximately 70% of the Financial Accounting Reporting (FAR) section of the current Uniform CPA Examination. In response to the recently updated CPA exam, we have provided the resources needed to prepare your students. We have mapped the learning objectives from each chapter to the learning objectives in the CPA Exam Blueprints. With this update, faculty and students will better understand how the topics in each chapter match up with the CPA exam learning objectives in the Financial Analysis and Reporting Section (FAR) and the Business Analysis and Reporting Section (BAR). This is useful for assessment purposes and will allow faculty and accounting departments the flexibility to separate FAR from BAR topics in the intermediate courses. Being current is important to our author team as we continually monitor updates to the CPA exam to provide the most up-to-date materials.

How Today's Accounting Students Learn

As we developed the concept for this Intermediate Accounting learning system, we conducted extensive research with accounting students and faculty to understand the changing learning and study behavior of accounting students. The findings of that research led to the development of the first three editions. We have continued to conduct research that focuses on how accounting students learn and how faculty teaching has evolved in the post-pandemic educational environment. In preparation for the 4th edition, we conducted 4 surveys of accounting students with over 5,000 student participants.

Findings of this research indicate that the vast majority of accounting students prefer:

  • Attempting homework assignments before reading the textbook or using other course resources
  • Watching videos that explain the accounting rather than reading the textbook
  • Digestible chunks of information as opposed to lengthy multi-topic explanations
  • Online learning system that they can access 24/7 from any type of device

Learning Style



Preferred Learning Materials



Students Value myBusinessCourse



We used these findings and others to create an intermediate accounting product that complements and facilitates how today’s students learn.


Author Amie Dragoo discusses some of the text's features below:

The active-learning approach:


The text is supported with over 800 author prepared videos!  


We include the accounting equation and T-accounts to help student understand the impact of the transactions and avoid rote memorization of Journal Entries.



We incorporate Data Analytics in response to the AACSB curriculum outline, the AICPA/NASBA evolution model curriculum, and the demands of employers.



We engage students through real examples that include topics of interest to them, including Environmental, Social, and Governance.



We provide direct citations of the most relevant references from the Codification. This best prepares the typical intermediate accounting student who will often reference and cite the authoritative standards in practice.



Often students don't appreciate the judgments made in accounting, so we include Management & Judgment discussions and assignments in each chapter.



We have partnered with Gleim CPA Prep to provide your students with a head start on their journey to the profession.



NEW: MBC Boost Study App to Sharpen Learning

The 4th edition of Intermediate Accounting is accompanied by a new Boost Study App available on mobile devices running on iOS and Android operating systems. Students using myBusinessCourse for their homework assignments can download the study app from the Apple App Store and Google Play Store. Students can learn on the go and access additional study tools using their Apple and Android phones and mobile devices.

The MBC Boost Study App includes:

  • Videos
  • Flashcards
  • Quizzing
  • Matching
  • Remediation path





Action Plan

To establish our active-learning approach and highlight its user friendly organization, each chapter opens with an Action Plan that identifies each learning objective for the chapter, the related page numbers, the demonstrations, the review applications, the assignments, and the learning objectives tied to the CPA Exam Blueprints. This table allows students and faculty to quickly grasp the chapter contents and to efficiently navigate to the desired topic.



Overview, Demo, and Review

We have adopted a straightforward, effective layout throughout every chapter of the book. We have included carefully crafted learning objectives that are not extraneous or all-encompassing. Each key learning objective is clearly identified with a distinct orange and blue banner and is followed by its own overview, demo, and review.



In fact, each learning objective represents a separate learning module, allowing students and faculty to break down complex topics into manageable subtopics. Our text is comprised of approximately 200 learning objectives and unlike other textbooks in the market, each learning objective is structured in the same way with a consistent layout and resources (in type and quality) associated with each learning objective. Students appreciate this style of learning uniquely adopted in Intermediate Accounting because of the current trend in learning preferences. Students prefer to learn by doing with convenient access to explanations and authoritative references for help in the process. For additional support, students have access to short videos for each Overview, Demo, and Review. The videos can be accessed in MBC.

To help students, we employ a 3-step process for each learning objective.


Market research indicates that students benefit from this consistent pedagogical approach to learning.



Following each learning objective is a brief explanation of the topic with visual references (diagrams) when helpful. We also include an overview box for each learning objective to provide students with a quick overview of key topics. For topics where relevant authoritative guidance is important, we included an excerpt from the Codification. This presentation of the accounting guidance minimizes authors’ biases and places both students and faculty in a unique authoritative position. Our approach incorporates ASC Glossary definitions whenever possible and terminology that is common in the Codification such as the terms recognition, measurement, derecognition, and disclosure. References to authoritative guidance are distinctly highlighted with black block text as shown below. While we take the text exactly as it is from the standard, we sometimes include only the main part of the standard and do not include more detailed portions in the interest of parsimony. Also, we include the most recently approved Codification references, even if the effective date is in the future.



The presentation of the Codification within the text makes our text unique within the marketplace. This aspect of the text is also relevant to students who are now expected to analyze sections of the Codification on the CPA exam so exposure to the Codification is critical to student success.



A presentation focused on demos inspires the contemporary college learner. Demos are included for each learning objective to illustrate the accounting concept discussed. We include color-coded solutions within the Demo (the blue text) because this is the student’s first exposure to the relevant topic. In older intermediate textbooks, it is common for an accounting concept or a variation to an accounting method to be explained in a page or more of text instead of through an illustration. In our approach, accounting concepts are predominantly demonstrated. The active learner can reconstruct the steps independently. In addition, each demo is accompanied by a short video clip (typically 3 minutes or less) that walks students through the solution to the demo.




At the conclusion of each learning objective, a review problem is provided with answers included at the end of the chapter. These review problems are presented to reinforce concepts presented in the section and to ensure student comprehension. By not providing the review solutions on the same page as the review, we are encouraging students to ‘learn by doing.’ The demo, along with the overview material, provides the foundation for students to complete the review problems. Students have the opportunity to practice the same problem online in myBusinessCourse. We believe that many students will take advantage of the opportunity to work through the problem online because they will gain instant feedback as to whether they completed the solution accurately—and frankly, a digital environment is more in line with how we all function every day. Further, each review is accompanied by a short video clip (typically 3 minutes or less) that walks students through the solution to the review. All reviews are included in MBC with algorithmic options, which means they can be assigned and auto-graded.


Integrated Videos in MBC   Author-created videos are an integral part of our learning system. Time and again, our market research on student preferences and study habits indicates today’s students like and rely heavily on video instruction as they learn and apply accounting concepts to homework assignments and projects. Our videos are available through MBC and can be accessed 24/7 by students. To facilitate students’ use of the instructional videos while doing their homework, we identify the appropriate video in the margin next to many assignments.


Accounting Equation and T-Accounts

We have received overwhelmingly positive feedback on the inclusion of the accounting equation and use of T-accounts. Faculty recognize the value of these tools in explaining the impact transactions have on accounts and financial statements. Students typically encounter the accounting equation and T-accounts in their introductory financial accounting course, and they appreciate the continuity between courses that these tools create. An additional benefit of using the accounting equation is that Finance majors, who are more focused on the impact of transactions than the recording of them, leave the course with a better understanding of the affect transactions have on financial statements.

In the 4th edition, we expand our use of the accounting equation and T-accounts. In the margin adjacent to the journal entries, we show the impact of the accounting equation and T-accounts to aid in student comprehension.



Abbreviated Account Names and Cash Flow Identifier

New to this edition, abbreviated accounts names have been added to the accounting equation to increase usefulness to students. When a transaction affects cash, we also use notation to indicate if it is an operating cash flow (C:o), or an investing cash flow (C:i) or a financing cash flow (C:f).



New Assignments Requiring Use of the Accounting Equation

To complement the accounting equations shown in the text, a number of assignments are now offered in the accounting equation format in addition to the journal entry format. Faculty will have the flexibility to assign the traditional journal entry approach and/or the accounting equation approach for this set of problems. These questions will be well received by finance majors interested in the financial statement impact of transactions


Excel Skills & Integrated Excel

Proficiency with Excel continues to be one of the most sought-after skills among employers. To facilitate Excel skill development, MBC now includes short videos that show students how to use various features and functions in Excel. The videos can be accessed within myBusinessCourse as part of your MBC course.

In addition, Cambridge Business Publishers has a new relationship with Microsoft that allows for a seamless integration of Excel within myBusinessCourse. Faculty can assign homework through MBC that requires students to use Excel. These assignments are auto-graded and scores are captured in the MBC gradebook.


Learning in Context

Real World

Students appreciate and become more engaged when they see the real-world relevance of the content they are learning in class. We include current, real-world examples of financial reporting throughout each chapter in Real World boxes.


Sustainability Reporting

Companies continue to expand disclosures on different aspects of sustainability. In the fourth edition, we have expanded our Real World coverage of recent 10-K disclosures with sustainability considerations and added other sustainability content where appropriate to describe current financial statement reporting requirements (primarily SEC guidance). Also new to this edition, we have added assignments requiring students to review and analyze recent sustainability disclosures. These new assignments are available in MBC.




Management Judgement

In each chapter, we emphasize how management judgment is required to apply the authoritative guidance. We feel it is important for students to understand that applying accounting rules is often subjective and requires professional judgment.


Expanding Your Knowledge

Expanding Your Knowledge sections extend the coverage of a learning objective to novel situations that are illustrated with excerpts and examples from practice. These topics can enhance classroom discussions or simply allow the curious student to go beyond the usual coverage. A representative sample follows.


Chapter Assessment

The challenge in intermediate accounting is applying the concepts to different scenarios. Our assignment material consists of a wide variety of formats, varying levels of complexity, a thorough coverage of learning objectives, and selections with real world data. The materials increase in complexity as you move through the different categories: Questions, Multiple-Choice, Brief Exercises, Exercises, and Problems. The questions in each end of chapter section are numbered sequentially from start to finish to avoid confusion for students. All learning objectives are represented in the end of chapter materials.

Each chapter contains Questions, Multiple-Choice, Brief Exercises, Exercises, and Problems. The Multiple-Choice section is new to this edition. At least one question is provided for each learning objective of the text. The computational questions are included in MBC with algorithmic options.

We prepared a grid plotting each chapter’s content across the best competing texts in the marketplace, arranged by learning objective, to ensure that our coverage exceeds the competition. Importantly, our assignments correspond with the listed learning objective to ensure that students have the necessary foundational material to complete the corresponding problems. The last section (Accounting Decisions and Judgments) includes more application-type problems, which are identified as follows.


New to this edition, Integrated Excel questions have been added to MBC which allows for the auto-grading of student Excel formulas.






Data Analytics and Data Visualizations

The world in which we live has changed dramatically in recent years. Technology is rapidly altering how accounting is performed and what can be done with the data once they are collected. In this edition, we have incorporated data analytic and data visualization assignments tailored to each chapter’s content. An Excel solution is provided for instructors and all assignments have been added to MBC for an auto-grading option. Additional assignments are available in Appendix A which also provides an overview of the topic of data analytics.




Chapter Organization—Updated This Edition

Chapters in this text are organized into two parts.

Part 1: Chapters 1 through 6 offer a review of introductory financial reporting. We begin with the accounting environment and the underlying conceptual framework. We review the accounting double-entry system, including the preparation and presentation of the four financial statements: income statement (including comprehensive income), balance sheet, statement of equity, and statement of cash flows. We also introduce the DuPont framework, which is useful for analysis and interpretation of accounting reports. The first part of the book concludes with a review of time value of money.

Part 2: The second part launches with the chapter on revenue recognition. This chapter is helpful to understanding the remaining chapters, including when revenue (and assets) are recognized, and when expenses (and liabilities) are recognized. Chapters 8 through 23 loosely follow the accounting equation. Specifically, we begin with the chapters covering assets—Chapters 8 through 14, followed by chapters generally covering liabilities or equity (with some asset implications)—Chapters 15 through 20. The last part of part 2 includes a new chapter to the fourth edition, Chapter 21 on Accounting Changes and Error Analysis. Previously offered as an Appendix, we now offer this content in a dedicated chapter with supporting resources. Next, Chapter 23 revisits the statement of cash flows (from Chapter 5), addressing the cash flows related to some special topics introduced in part 2. New to this edition, we moved the content on Pensions and Postretirement Benefits to the final chapter (Chapter 23) in recognition of its elimination from topical coverage on the CPA exam. Finally, Appendix A introduces Data Analytics and Appendix B (Online) describes key areas of differences between U.S. GAAP and IFRS.


Book-Wide Changes to This Edition

In addition to the chapter-specific changes listed below, we have made several enhancements that affect the entire book.

General Updates to the Text

  • Chapter organization was revised to now include a new chapter (Chapter 21) on Accounting Changes and Error Analysis and the chapter on pensions and postretirement benefits was moved to the end of the book (Chapter 23) to recognize its elimination on the CPA exam. (See the new flow of chapters from Chapter 19 to Chapter 23).
  • The CPA column of the Action Plan was updated to now reference sections of the CPA Exam Blueprints (2025) which can help instructors with curriculum assessment.
  • The balance sheet equation (BSE) included in the text margin next to each journal entry now includes abbreviated account name. One key benefit of incorporating the BSE with account names is that students can readily see the impact of each transaction on the financial statements.
  • New real world sustainability reporting examples were added throughout the text.
  • We have updated disclosures for real companies on the chapter opening pages, Real World boxes, and Management Judgment sections.

General Updates to End-of-Chapter Assignments and MBC

  • A new multiple-choice section was added to every chapter of the text. At least one question is offered for each learning objective of the text.
  • Many existing assignments are now offered in the balance sheet equation format in addition to the journal entry format.
  • Overall, we assessed the coverage of assignments for each learning objective and added additional assignments as needed.
  • A number of new assignments have been updated with current, real data.
  • Additional questions in the problems and AD&J sections were added to MBC.
  • New assignments asking students to analyze actual sustainability disclosures were added.
  • Faculty will have the option to turn on relevant demo and review video resources that match numerous end-of-chapter assignments. This allows students convenient access to videos while solving similar problems in myBusinessCourse.
  • Data Visualization assignments were added to the assignment offerings which allows students to analyze charts without creating them.
  • New Integrated Excel assignments were also added which test students on the Excel formulas entered. This new auto-graded offering is completed by students within MBC, not requiring students to have Excel on their computers.
  • Test Bank was updated to correspond with changes to the fourth edition and supplemented with additional questions.
  • Additional videos were created for each chapter to align with new edition updates.


Chapter Specific Changes to Thisc

CHAPTER 1—Accounting Environment and the Conceptual Framework

  • Updated assumptions and processes (some formerly called principles) to align with SFAC amendments.
  • Added a new section to introduce financial statements.
  • Moved a portion of the discussion on fair value from Chapter 4 to Chapter 1 for a more cohesive presentation.
  • Added 15 new assignments including multiple-choice, overview of financial statements, Codification, sustainability reporting, and more.

CHAPTER 2—Accounting Information System

  • Expanded introduction to revenue recognition, giving faculty the flexibility to cover Chapter 7 in a second course.
  • Revised Demos 2-4C, 2-4D and 2-8 to show the related journal entry in the following period.
  • Added new discussion on regulatory reporting and revised exhibits to show explanations for the change in cash in LO2-8.
  • Added 20 new assignments including multiple-choice, cash to accrual, introduction to revenue recognition, BSE, and more.

CHAPTER 3—Income Statement and Comprehensive Income

  • Expanded income statement presentation to show how unusual items can be shown as operating or nonoperating.
  • Added summary of disclosure requirements for disaggregation of expenses.
  • Added a Real World example of disclosure of balance sheet items in discontinued operations.
  • Separated single-step from multiple-step income statements questions in the assignment materials.
  • Added new sustainability reporting discussion on risk factors.
  • Simplified presentation on accounting changes and error analysis with more advanced topics moved to Chapter 21.
  • Added 20 new assignments including multiple-choice, accounting equation, multi-year income statement, and more.

CHAPTER 4—Balance Sheet and Financial Reporting

  • Updated chapter with recent Harley Davidson disclosures. 
  • Added 10-Q component content (included on CPA exam). 
  • Moved a portion of the fair value discussion to Chapter 1. 
  • Added discussion on SEC cybersecurity disclosures.
  • Updated LO4-5 for segment disclosure updates (ASC 280) and added a new exhibit.
  • Added 17 new or revised assignments including multiple-choice, comprehensive accounting cycle, sustainability reporting questions, separate single and multiple-step statement options, and more.

CHAPTER 5—Statement of Cash Flows and Financial Analysis

  • Updated graphic on page 5-7.
  • Added ASC 230-10-50-2A regarding disclosures of taxes paid.
  • Linked Demo 5-2 to the balance sheet equation.
  • Added new exhibit in Demo 5-8, reconciling the income statement to the direct method of cash flows.
  • Updated Review 5-8 to now include a full cash flow statement following the direct method in the operating activities section.
  • Added 17 new or revised assignments including multiple-choice, comprehensive problem with comparative statement of cash flows, reporting on environmental capital projects, direct method cash flow, and more.

CHAPTER 6—Time Value of Money

  • Expanded PV and FV graphics to show discounting and accretion by year.
  • Added 8 new multiple-choice questions.

CHAPTER 7—Revenue Recognition

  • Added Demo 7-5C on transaction price allocation with customer options.
  • Added 42 new assignments including multiple-choice, accounting equation, real world problems on revenue recognition, regulatory credits, and more.

CHAPTER 8—Cash and Receivables

  • Expanded coverage of notes receivable.
  • New content on SEC ruling on climate disclosure.
  • Added part b to Demo 8-5C on the proration of interest under the effective interest method.
  • Added Demo 8-5E on installment note receivable.
  • LO8-7 updated for ASU 2022-02 on troubled debt restructuring for creditors (content moved from Chapter 16).
  • Added or revised 48 assignments including multiple-choice, net and gross method, note
    receivable, accounting equation, sustainability reporting, debt restructuring, and more.

CHAPTER 9—Inventory: Measurement

  • Added 27 new assignments including multiple-choice, accounting equation, environmental credits recognized as inventory, and more.
  • Expanded discussion on accounting for renewable energy credits.

CHAPTER 10—Inventory: Additional Issues

  • Simplified presentation and updated demos on accounting changes with more advanced topics moved to Chapter 21.
  • Revised exhibit in Demo 10-7 to improve clarity for students.
  • Added 13 new assignments including multiple choice and accounting equation.

CHAPTER 11—Property, Plant & Equipment:  Acquisition & Disposition

  • Added new disclosure on capital expenditures with an environmental emphasis.
  • In Demo 11-3A, added entries for the note holder to mirror the entries of the note issuer.
  • Added 26 new assignments including multiple-choice, accounting equation, asset retirement obligation, and more.

CHAPTER 12—Depreciation, Impairments, and Depletion

  • Simplified presentation of LO12-4, 12-5, and 12-6 on accounting changes and error analysis with more advanced topics moved to Chapter 21.
  • Added 24 new assignments including multiple-choice, accounting equation, sustainability reporting, and more.

CHAPTER 13—Intangible Assets and Goodwill

  • Former LO13-7 (R&D and software development) was separated into two separate learning objectives and the content was expanded.   
  • Added environmental credits to Exhibit 13-1.   
  • Updated presentation of crypto assets for GAAP updates; added related new Demo 13-5A.   
  • Simplified presentation and updated demos on accounting estimates (LO13-4) with more advanced topics moved to Chapter 21.   
  • Added 19 new assignments including multiple-choice, accounting equation, sustainability disclosure on renewable energy credits recognized as intangible assets, and more.

CHAPTER 14—Investments in Debt and Equity Securities

  • The dual presentation on accounting for investments upon sale was changed from a side-by-side comparative approach to a separate LO presentation approach to improve the student learning experience. (The former accounting method one was moved to multiple appendices to the chapter.)
  • HTM examples for the bondholder (company names and dollar amounts) were updated to mirror examples in Chapter 16 for the bond issuer. This update more easily allows faculty to show each side of a bond transaction.    
  • Dropped prior appendix 14B on special purpose funds and life insurance, with some discussion items moved to Chapter 4.    
  • Updated Demo 14-1A to include bond retirement.    
  • Added reclassification disclosure to Demo 14-3A and simplified reconciliation presentation.    
  • Added sustainability reporting topic of ESG classification of investment funds in the European Union.    
  • Added 31 new assignments including multiple-choice, accounting equation, and more plus additional appendix assignments to support alternative method to account for investments upon a sale.

CHAPTER 15—Current Liabilities and Contingencies

  • Added Codification reference on commitment disclosures to LO15-6.  
  • Updated payroll rates in LO15-3.   
  • Added sustainability reporting content on environmental liabilities.  
  • Added 30 new assignments including multiple-choice, accounting equation, reporting of environmental liabilities, and more.

CHAPTER 16—Long-Term Liabilities

  • Bond examples for the bond issuer (company names and dollar amounts) were updated to mirror examples in Chapter 14 for the bondholder. A new side-by-side comparison exhibit is also included in Chapter 16.   
  • Updated amortization schedules to include a column for the unamortized discount or premium    
  • Moved creditor section on troubled debt to Chapter 8.   
  • Added sustainability content on the issuance of green bonds.   
  • Added new Codification disclosure of unused commitments in LO16-10. 
  • Revised the content of LO16-8 to reflect ASU 2024-04 on induced conversions.
    Added 33 new assignments including multiple choice, accounting equation, questions asking for debtor and investor entries, green bond issuance, and more.

CHAPTER 17—Accounting for Leases

  • Added new Demo 17-8C on unguaranteed residual value in sales-type lease.    
  • Added part 5 to Demo 17-1 to illustrate the fifth lease classification criterion.    
  • Added part k to Demo 17-6 to account for a lease where the lessor determines payments by the lessee are not probable.  
  • Added more clarity to the distinction between the terms net investment in lease and lease receivable for a sales-type lease (LO17-6, LO17-8, and LO17-10).    
  • Added 28 new assignments including multiple-choice, accounting equation, and more.

CHAPTER 18—Income Taxes

  • The tax chapter was revamped to improve the student experience. We now start with a broad introduction and then build on the example with more complexity in later learning objectives.
  • In this update, some content was reordered and revised in the chapter to improve the flow and presentation of topical content.
  • A number of demos and reviews were revised throughout the chapter.
  • Show that the term “permanent” difference is referenced as nontaxable, nondeductible, and other differences in the Codification.
  • Expanded examples of tax rate reconciliation disclosures under ASU 2023-09 showing nontaxable amounts, nondeductible amounts, and tax rate changes. Also discussed the effect on rate reconciliation for tax credits.
  • Moved LO18-10 to Chapter 21.

CHAPTER 19—Stockholders' Equity (Formerly Chapter 20)

  • Illustrated noncontrolling interest through Coca-Cola in LO19-1.   
  • Expanded LO19-7 to include the statement of stockholders’ equity.  
  • Added 27 new assignments including multiple-choice, accounting equation, diluted EPS, compensation expense, and more.

CHAPTER 20—Share-Based Compensation and Earnings per Share (Formerly Chapter 21)

  • Added new Codification reference on EPS disclosures in LO20-9.   
  • Added new sustainability Real World box on executive compensation.  
  • Added 32 new assignments including multiple-choice, accounting equation, diluted EPS, compensation expense, and more.

CHAPTER 21—Accounting Changes and Error Analysis Revisited (Formerly Appendix A)

  • Converted Appendix in prior edition to a new chapter complete with related chapter supplements.    
  • Includes a review of concepts covered in prior chapters along with expanded coverage.   
  • Significantly increased the number of end-of-chapter assignments.

CHAPTER 22—Statement of Cash Flows Revisited

  • Added new Codification reference in LO22-5 related to disclosures.
  • Moved pension references to Expanding Your Knowledge text box.
  • Added 10 new assignments including multiple-choice.

CHAPTER 23—Pensions and Postretirement Benefits (Formerly Chapter 19)

  • The pension chapter has been moved to later in the book in recognition of its elimination from topical coverage on the CPA exam.   
  • New teaching notes were added to suggest coverage and related assignments for faculty who wish to provide a brief topical overview of defined benefit plans.    
  • Included a new Expanding Your Knowledge box on pension fund financial statements (content included on BAR exam).   
  • Added 16 new assignments including multiple-choice and more.

APPENDIX A—Data Analytics

  • Expanded background discussion to include the analytics mindset and best practices in data visualization.   
  • Added additional assignments in Tableau and Excel.




Examples of the Action Plan & video features available for each chapter. Click on a Demo or Review link in the grid to preview the related video. 

Action Plan
LO Topic/Subtopic Page Demos Reviews Assignments CPA*

LO 8-1

Classify cash, cash equivalents, restricted cash, and compensating balances

Cash::Cash Equivalents::Restricted Cash::Compensating Balances::Balance Sheet Classification
8-3
17, 33, 34, 39, 59, 84, 85
CORE 
Mod 2: Topic 1: LO1

LO 8-2

Account for sales and collections on account including the impact of cash discounts

Gross Method::Net Method::Cash Discount::Discount Period
8-6
18, 19, 35, 36, 39, 59, 61, 62, 77, 80, 83, DA8-2
CORE 
Mod 2: Topic 1: LO4 
Mod 2: Topic 1: LO6 
Mod 2: Topic 1: LO7 
Mod 8: Topic 4: LO3 
BAR 
Mod 10: Topic 6: LO2

LO 8-3

Account for impact of sales returns and allowances

Sales Returns::Variable Consideration::Refund Liability::Estimated Returns Inventory
8-10
20, 37, 38, 59, 61, 85
CORE
Mod 2: Topic 1: LO4
Mod 2: Topic 1: LO6
Mod 2: Topic 1: LO7

LO 8-4

Measure and record accounts receivable at net amount expected to be collected

Allowance Method::CECL Model::Aging Schedule::Expected Credit Losses
8-12
21, 22, 23, 24, 39, 40, 41, 42, 43, 44, 45, 46, 59, 62, 63, 64, 65, 66, 75, 76, 79, 84, 85, DA8-1, DA8-3, DA8-4
CORE 
Mod 2: Topic 1: LO4 
Mod 2: Topic 1: LO6 
Mod 2: Topic 1: LO7 
Mod 4: Topic 1: LO3 
BAR 
Mod 2: Topic 1: LO2 
Mod 2: Topic 1: LO3 
Mod 10: Topic 3: LO6 
Mod 10: Topic 4: LO1 
Mod 10: Topic 6: LO2

LO 8-5

Measure and record notes receivable

Note Receivable::Face Value::Effective-Interest Method::Discount on Note Receivable
8-20
25, 26, 46, 47, 48, 49, 50, 51, 59, 67, 68, 69, 78, 85, 86
CORE
 Mod 2: Topic 1: LO4
 Mod 2: Topic 1: LO6
 Mod 2: Topic 1: LO7
 BAR
 Mod 1: Topic 1: LO3

LO 8-6

Account for the sale of receivables and use as collateral for borrowing

Secured Borrowing::Collateral::Sale with Recourse::Sale Without Recourse::Recourse Liability
8-26
27, 28, 29, 30, 31, 52, 53, 54, 55, 56, 57, 59, 60, 70, 71, 72, 73, 81, 84
CORE
Mod 2: Topic 1: LO5 

LO 8-7

Describe receivable disclosures and ratio analyses

Accounts Receivable Turnover::Average Days to Collect Receivables
8-32
32, 58, 59, 60, 74, 78, 79
CORE
 Mod 4: Topic 1: LO2
 Mod 4: Topic 1: LO3

LO 8-8

APPENDIX 8A

Apply cash controls

Cash Reconciliations::Bank Reconciliation::Accounting Controls
(Coming Soon)
8-35
59, 82, 91, 92, 93, 94, 95, 98, 99, 100, 101, 102, 105, 106, 107, 108
CORE
Mod 2: Topic 1: LO2
Mod 2: Topic 1: LO3

LO 8-9

APPENDIX 8B

Account for impairment of noncurrent receivables

Bad Debt Expense::Allowance for Doubtful Accounts::Effective-Interest Method::Expected Credit Losses
(Coming Soon)
8-41
96, 97, 103, 104, 109
CORE
Mod 2: Topic 1: LO4



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Financial Accounting Bootcamp

This interactive tutorial is intended for use in programs that either require or would like to offer a tutorial that can be used as a refresher of topics introduced in the first financial accounting course. It is designed as an asynchronous, interactive, self-paced experience for students. Available Learning Modules (You Select) follow.

  1. Introducing Financial Accounting (approximate completion time 2 hours)
  2. Constructing Financial Statements (approximate completion time 4 hours)
  3. Adjusting Entries and Completing the Accounting Cycle (approximate completion time 4 hours)
  4. Reporting and Analyzing Cash Flows (approximate completion time 3.5 hours)
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Guide to Intermediate Accounting Research

The Guide to Intermediate Accounting Research, Third Edition, by Shelby Collins, is intended to serve as a supplement to the materials used in an intermediate accounting course. It includes many opportunities to apply Codification guidance to related accounting topics (including, for example, leases, investment accounting, revenue recognition, and consolidation). Students will learn to confidently address and communicate accounting research issues, from start to finish. Students will not only take away the ability to identify the accounting problem (the “researchable question”) but will gain experience locating and applying guidance within the FASB Codification. This is a separate, saleable text (ISBN: 978-1-61853-316-6). Contact your sales representative to receive a desk copy or email customerservice@cambridgepub.com.




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About Our Team (pg. iii)
How Today’s Accounting Students Learn (pg. v)
Preface (pg. viii)
Brief Contents (pg. xxv)
Contents (pg. xxvi)
Chapter 1: Accounting Environment and the Conceptual Framework (pg. 1-1)
LO 1-1 Describe the objective of general-purpose financial reporting (pg. 1-3)
Financial Statement Overview (pg. 1-3)
Objective of Financial Reporting (pg. 1-4)
Reporting Entity (pg. 1-4)
General-Purpose Financial Reports (pg. 1-4)
Investors and Creditors (pg. 1-4)
Decisions on Resource Allocation (pg. 1-5)
Implications of Financial Reporting (pg. 1-5)
AICPA Pathways Commission (pg. 1-5)
CPA Evolution Initiative (pg. 1-6)
Demo 1-1 Analyzing the Objective of Financial Reporting (pg. 1-6)
Review 1-1 Objective of Financial Reporting (pg. 1-7)
LO 1-2 Identify key organizations that determine GAAP, how GAAP is used for accounting research, a (pg. 1-7)
Historical Development of GAAP (pg. 1-8)
Current Development of GAAP (pg. 1-8)
Codification (or ASC) Used in Accounting Research (pg. 1-10)
Applying Judgment When Using the Codification (pg. 1-12)
Due Process for New Standards (pg. 1-13)
International Accounting Standards (pg. 1-14)
Factors Driving High-Quality Application of GAAP (pg. 1-15)
Independent Auditors (pg. 1-15)
Ethics and Financial Reporting (pg. 1-16)
Sustainability Reporting (pg. 1-16)
Demo 1-2 Determinants of U.S. GAAP (pg. 1-17)
Review 1-2 Determinants of U.S. GAAP (pg. 1-17)
LO 1-3 Describe the qualitative characteristics of, and the constraint on, useful financial infor (pg. 1-17)
Fundamental Qualitative Characteristics (pg. 1-18)
Demo 1-3A Fundamental Qualitative Characteristics of Financial Reporting (pg. 1-20)
Review 1-3A Fundamental Qualitative Characteristics of Financial Reporting (pg. 1-20)
Enhancing Qualitative Characteristics (pg. 1-20)
Demo 1-3B Enhancing Qualitative Characteristics of Financial Reporting (pg. 1-21)
Review 1-3B Enhancing Qualitative Characteristics of Financial Reporting (pg. 1-22)
Cost Effectiveness Constraint (pg. 1-22)
Demo 1-3C Cost Effectiveness Constraint (pg. 1-23)
Review 1-3C Cost Effectiveness Constraint (pg. 1-23)
LO 1-4 Explain financial statement elements in the FASB conceptual framework (pg. 1-23)
Demo 1-4 Identification of Financial Statement Elements (pg. 1-24)
Review 1-4 Financial Statement Elements (pg. 1-25)
LO 1-5 Describe the four key accounting assumptions (pg. 1-25)
Demo 1-5 Identifying Accounting Assumptions (pg. 1-26)
Review 1-5 Accounting Assumptions (pg. 1-26)
LO 1-6 Describe four key accounting processes (pg. 1-27)
More on Recognition and Derecognition (pg. 1-28)
More on Measurement (pg. 1-28)
Impact of Data Analytics for Accounting (pg. 1-30)
Demo 1-6 Identifying Accounting Processes and Determining Fair Value (pg. 1-31)
Review 1-6 Accounting Processes (pg. 1-31)
Management Judgment (pg. 1-32)
Reporting Financial Statement Elements (pg. 1-32)
Questions (pg. 1-32)
Data Analytics (pg. 1-33)
Data Visualization (pg. 1-33)
Multiple Choice (pg. 1-34)
Brief Exercises (pg. 1-34)
Exercises (pg. 1-38)
Accounting Decisions and Judgments (pg. 1-43)
Answers to Review Exercises (pg. 1-47)
Chapter 2: Accounting Information System (pg. 2-1)
LO 2-1 Analyze the effects of economic transactions using the accounting equation (pg. 2-3)
Demo 2-1 Analysis of Transactions Using Accounting Equation (pg. 2-4)
Review 2-1 Analysis of Transactions Using Accounting Equation (pg. 2-5)
LO 2-2 Identify, record, and post transactions (pg. 2-5)
Normal Account Balances (pg. 2-5)
Demo 2-2A Identify Normal Account Balances (pg. 2-6)
The Accounting Cycle (pg. 2-7)
Step 1: Identify Transactions and Events to Be Recorded (pg. 2-7)
Step 2: Record Transactions and Events in a Journal (pg. 2-8)
Recognizing Revenue and Recording in a Journal (pg. 2-8)
Step 3: Post from Journal to Ledger (pg. 2-9)
Demo 2-2B Identify, Record, and Post Transactions (pg. 2-10)
Post Journal Entries to General Ledger (pg. 2-13)
Review 2-2 Identify, Record, and Post Transactions (pg. 2-13)
LO 2-3 Prepare an unadjusted trial balance (pg. 2-14)
Step 4: Prepare an Unadjusted Trial Balance (pg. 2-14)
Demo 2-3 Unadjusted Trial Balance (pg. 2-14)
Review 2-3 Unadjusted Trial Balance (pg. 2-15)
LO 2-4 Identify, record, and post adjusting journal entries (pg. 2-15)
Step 5: Identify, Record, and Post Adjusting Journal Entries (pg. 2-15)
Deferrals of Expense (pg. 2-16)
Demo 2-4A Adjusting Journal Entries—Deferrals of Expense (pg. 2-17)
Deferrals of Revenue (pg. 2-18)
Demo 2-4B Adjusting Journal Entries—Deferral of Revenue (pg. 2-19)
Accruals of Expense (pg. 2-20)
Demo 2-4C Adjusting Journal Entries—Accrual of Expense (pg. 2-20)
Accruals of Revenue (pg. 2-21)
Demo 2-4D Adjusting Journal Entries—Accrual of Revenue (pg. 2-22)
Summary of Deferral and Accrual Adjusting Entries (pg. 2-22)
Review 2-4 Adjusting Journal Entries (pg. 2-22)
LO 2-5 Prepare an adjusted trial balance (pg. 2-23)
Step 6: Prepare the Adjusted Trial Balance (pg. 2-23)
Demo 2-5 Adjusted Trial Balance (pg. 2-23)
Review 2-5 Adjusted Trial Balance (pg. 2-24)
LO 2-6 Prepare financial statements from an adjusted trial balance (pg. 2-24)
Step 7: Prepare Financial Statements (pg. 2-24)
Income Statement (pg. 2-24)
Statement of Stockholders’ Equity (pg. 2-24)
Balance Sheet (pg. 2-24)
Demo 2-6 Preparation of Financial Statements (pg. 2-25)
Review 2-6 Financial Statement Preparation (pg. 2-25)
LO 2-7 Record and post closing entries and prepare a post-closing trial balance (pg. 2-26)
Step 8: Prepare and Post Closing Entries (pg. 2-26)
Demo 2-7A Record and Post Closing Journal Entries (pg. 2-26)
Step 9: Prepare a Post-Closing Trial Balance (pg. 2-28)
Demo 2-7B Prepare a Post-Closing Trial Balance (pg. 2-28)
Review 2-7 Closing Entries and Post-Closing Trial Balance (pg. 2-28)
Management Judgment (pg. 2-29)
Management Judgment Required in the Accounting Cycle (pg. 2-29)
Management Judgment Required in Setup of Accounts (pg. 2-29)
Management Judgment Required in Analysis of Nonfinancial Information (pg. 2-29)
APPENDIX 2A LO 2-8 Describe the use of special purpose frameworks and the conversion from cash bas (pg. 2-29)
Special Purpose Frameworks (pg. 2-30)
Conversion of Receipts (Cash Basis) to Revenue (Accrual Basis) (pg. 2-31)
Conversion of Disbursements (Cash Basis) to Operating Expenses (Accrual Basis) (pg. 2-31)
Demo 2-8 Conversion from Cash Basis to Accrual Basis (pg. 2-31)
Review 2-8 Conversion from Cash Basis to Accrual Basis (pg. 2-32)
APPENDIX 2B LO 2-9 Prepare reversing journal entries (pg. 2-32)
Demo 2-9 Reversing Journal Entries (pg. 2-33)
Review 2-9 Reversing Journal Entries (pg. 2-34)
APPENDIX 2C LO 2-10 Utilize an accounting worksheet (pg. 2-34)
Demo 2-10 Preparation of an Accounting Worksheet (pg. 2-34)
Review 2-10 Accounting Worksheet (pg. 2-36)
Questions (pg. 2-36)
Data Analytics (pg. 2-37)
Data Visualization (pg. 2-37)
Multiple Choice (pg. 2-37)
Brief Exercises (pg. 2-39)
Exercises (pg. 2-43)
Problems (pg. 2-52)
Accounting Decisions and Judgments (pg. 2-57)
Appendices—Questions (pg. 2-59)
Appendices—Multiple Choice (pg. 2-59)
Appendices—Brief Exercises (pg. 2-60)
Appendices—Exercises (pg. 2-61)
Appendices—Problems (pg. 2-64)
Answers to Review Exercises (pg. 2-65)
Chapter 3: Income Statement and Comprehensive Income (pg. 3-1)
LO 3-1 Prepare an income statement using single-step and multiple-step formats, focusing on income (pg. 3-3)
Income Statement Formats (pg. 3-4)
Multiple-Step Income Statement Format (pg. 3-4)
Single-Step Income Statement Format (pg. 3-4)
Disaggregation of Income Statement Expenses (pg. 3-5)
Demo 3-1 Multiple-Step and Single-Step Income Statement Formats (pg. 3-6)
Review 3-1 Multiple-Step and Single-Step Income Statement Formats (pg. 3-6)
LO 3-2 Report the impact of unusual and infrequent items (pg. 3-7)
Demo 3-2 Reporting an Unusual and/or Infrequent Item (pg. 3-9)
Review 3-2 Reporting an Unusual and/or Infrequent Item (pg. 3-10)
LO 3-3 Prepare an income statement to include discontinued operations (pg. 3-10)
Demo 3-3A Discontinued Business Component Sold During Reporting Period (pg. 3-11)
Discontinued Business Component Sold After Reporting Period (pg. 3-12)
Demo 3-3B (pg. 3-13)
Demo 3-3B Discontinued Operations—Component Not Sold as of Financial Statement Date (pg. 3-13)
Disclosure of Discontinued Operations (pg. 3-14)
Review 3-3 Discontinued Operations (pg. 3-14)
LO 3-4 Disclose earnings per share on the income statement (pg. 3-15)
Demo 3-4A Earnings Per Share—With Continuing Operations Only (pg. 3-16)
Demo 3-4B Earnings Per Share—With Discontinued Operations (pg. 3-16)
Review 3-4 Earnings per Share (pg. 3-17)
LO 3-5 Report other comprehensive income (pg. 3-18)
Demo 3-5 Statement of Comprehensive Income Presentation (pg. 3-19)
Review 3-5 Statement of Comprehensive Income Presentation (pg. 3-20)
LO 3-6 Describe the statement of stockholders’ equity (pg. 3-20)
Demo 3-6 Statement of Stockholders’ Equity Presentation (pg. 3-21)
Review 3-6 Statement of Stockholders’ Equity (pg. 3-21)
LO 3-7 Report changes in accounting estimate, changes in accounting principle, and error correction (pg. 3-22)
Change in Accounting Estimate (pg. 3-22)
Demo 3-7A Change in Accounting Estimate (pg. 3-22)
Change in Accounting Principle (pg. 3-23)
Demo 3-7B Change in Accounting Principle (pg. 3-23)
Error Correction (pg. 3-24)
Demo 3-7C Error Correction (pg. 3-25)
Summary of Accounting Changes and Error Correction (pg. 3-25)
Review 3-7 Principle Change, Estimate Change, and Error Correction (pg. 3-26)
Management Judgment (pg. 3-26)
Income Statement Presentation and Reporting of Comprehensive Income (pg. 3-26)
Classification of a Disposal as Discontinued Operations (pg. 3-27)
Accounting for Change in Principle and for Error Correction (pg. 3-27)
APPENDIX 3A LO 3-8 Describe interim financial reporting (pg. 3-27)
APPENDIX 3A LO 3-8 Describe interim financial reporting (pg. 3-27)
Demo 3-8 Interim Financial Reporting (pg. 3-30)
Review 3-8 Interim Financial Reporting (pg. 3-30)
Questions (pg. 3-30)
Data Analytics (pg. 3-31)
Data Visualization (pg. 3-31)
Multiple Choice (pg. 3-31)
Brief Exercises (pg. 3-33)
Exercises (pg. 3-35)
Problems (pg. 3-41)
Accounting Decisions and Judgments (pg. 3-46)
Appendix—Multiple Choice (pg. 3-49)
Appendix—Brief Exercises (pg. 3-50)
Appendix—Exercises (pg. 3-50)
Appendix—Problems (pg. 3-51)
Answers to Review Exercises (pg. 3-52)
Chapter 4: Balance Sheet and Financial Reporting (pg. 4-1)
LO 4-1 Describe classification of asset, liability, and equity accounts on the balance sheet (pg. 4-3)
Current Asset Classification (pg. 4-4)
Current Asset Classification (pg. 4-5)
Demo 4-1A Classifying Assets on the Balance Sheet (pg. 4-7)
Current Liability Classification (pg. 4-7)
Noncurrent Liability Classification (pg. 4-8)
Demo 4-1B Classifying Liabilities on the Balance Sheet (pg. 4-9)
Stockholders’ Equity (pg. 4-9)
Demo 4-1C Stockholders’ Equity Balance Sheet Presentation (pg. 4-11)
Review 4-1 Balance Sheet Classification (pg. 4-12)
LO 4-2 Prepare a classified balance sheet (pg. 4-12)
Demo 4-2 Preparing a Classified Balance Sheet (pg. 4-13)
Review 4-2 Preparing a Classified Balance Sheet (pg. 4-14)
LO 4-3 Explain notes to financial statements (pg. 4-15)
Summary of Significant Accounting Policies (pg. 4-16)
Fair Value Measurements (pg. 4-16)
Related Party Transactions (pg. 4-18)
Subsequent Events (pg. 4-18)
Errors, Fraud, and Illegal Acts (pg. 4-19)
Deo 1-3 Financial Statement Disclosure (pg. 4-20)
Review 4-3 Financial Statement Disclosure (pg. 4-20)
LO 04-4 Describe SEC filings of publicly traded companies in the U.S. (pg. 4-21)
Selected Content of Form 10-K (pg. 4-22)
Management’s Discussion and Analysis—Item 7 (pg. 4-22)
Financial Statements and Supplementary Data—Item 8 (pg. 4-24)
Directors and Executive Officers and Corporate Governance—Item 10 (pg. 4-25)
Executive Compensation—Item 11 (pg. 4-26)
SEC Sustainability Reporting Requirements (pg. 4-26)
Selected Content of Form 10-Q (pg. 4-28)
Demo 4-4 Items on Form 10-K (pg. 4-29)
Review 4-4 Disclosures on Form 10-K (pg. 4-29)
Management Judgment (pg. 4-30)
Elements Reported in the Balance Sheet (pg. 4-30)
Items Reported in Note Disclosures (pg. 4-30)
APPENDIX 4A LO 4-5 Identify segment reporting requirements (pg. 4-31)
Quantitative Thresholds for Reporting Segments (pg. 4-31)
Revenue Test (pg. 4-31)
Operating Profit Test (pg. 4-31)
Identifiable Assets Test (pg. 4-31)
Combined Revenue Test (pg. 4-31)
Segment Disclosures (pg. 4-32)
Demo 4-5 Segment Reporting (pg. 4-33)
Review 4-5 Segment Reporting (pg. 4-33)
Questions (pg. 4-34)
Data Analytics (pg. 4-35)
Data Visualization Activities (pg. 4-35)
Multiple Choice (pg. 4-35)
Brief Exercises (pg. 4-36)
Exercises (pg. 4-40)
Problems (pg. 4-47)
Accounting Decisions and Judgments (pg. 4-56)
Appendix—Questions (pg. 4-58)
Appendix—Brief Exercises (pg. 4-59)
Appendix—Exercises (pg. 4-59)
Appendix—Problems (pg. 4-60)
Appendix—Accounting Decisions and Judgments (pg. 4-61)
Answers to Review Exercises (pg. 4-62)
Chapter 5: Statement of Cash Flows and Financial Analysis (pg. 5-1)
LO 5-1 Identify operating, investing, and financing activities (pg. 5-3)
Cash Flows from Operating Activities (pg. 5-3)
Cash Flows from Investing Activities (pg. 5-4)
Cash Flows from Financing Activities (pg. 5-4)
Demo 5-1 Classification of Cash Flows (pg. 5-5)
Review 5-1 Classification of Cash Flows (pg. 5-5)
LO 5-2 Prepare a statement of cash flows using the indirect method to present cash flows from opera (pg. 5-6)
Cash Flows from Operating Activities (pg. 5-6)
Noncash Revenue and Expense Adjustments (pg. 5-7)
Changes in Current Operating Assets and Current Operating Liabilities (pg. 5-7)
Cash Flows from Investing and Financing Activities (pg. 5-7)
Financial Statement Disclosures (pg. 5-7)
Demo 5-2 Preparing a Statement of Cash Flows (pg. 5-8)
Review 5-2 Statement of Cash Flows (pg. 5-11)
LO 5-3 Describe the interrelations of financial statements (pg. 5-12)
Demo 5-3A Applying Definitions of Financial Statement Elements (pg. 5-13)
Demo 5-3B Interrelations of Financial Statements (pg. 5-16)
Review 5-3 Interrelations of Financial Statements (pg. 5-16)
LO 5-4 Perform an investment analysis using the DuPont Framework (pg. 5-17)
Return on Equity and Its Interpretation using DuPont Model (pg. 5-17)
Demo 5-4A Component Analysis of DuPont Model (pg. 5-18)
Integration of DuPont Model Components (pg. 5-19)
Demo 5-4B Integration Analysis of DuPont Model Components (pg. 5-20)
Additional Layers of DuPont Model (pg. 5-20)
Demo 5-4C Additional Layer Analysis of DuPont Model (pg. 5-22)
Review 5-4 Investment Analysis Using DuPont Framework (pg. 5-23)
LO 5-5 Perform a credit analysis using key ratios (pg. 5-23)
Demo 5-5A Liquidity Ratios (pg. 5-25)
Demo 5-5B Solvency Ratios (pg. 5-25)
Review 5-5 Credit Analysis Using Key Ratios (pg. 5-26)
Summary of Financial Statement Ratios (pg. 5-27)
LO 5-6 Perform horizontal and vertical analyses (pg. 5-28)
Demo 5-6A Horizontal Analysis (pg. 5-28)
Demo 5-6B Vertical Analysis (pg. 5-29)
Review 5-6 Horizontal and Vertical Analyses (pg. 5-29)
LO 5-7 Recognize non-GAAP financial measures (pg. 5-30)
Examples of Non-GAAP Disclosures (pg. 5-30)
Disclosure Requirements of Non-GAAP Measures (pg. 5-31)
Demo 5-7 Non-GAAP Disclosures (pg. 5-32)
Review 5-7 Non-GAAP Disclosures (pg. 5-33)
Management Judgment (pg. 5-33)
Transactions That Directly Impact Net Cash Flows for a Period (pg. 5-33)
Classification of Cash Flows as Operating, Investing, or Financing (pg. 5-33)
Reporting of Non-GAAP Measures in Financial Reporting (pg. 5-34)
APPENDIX 5A LO 5-8 Prepare the operating activities section of the statement of cash flows using t (pg. 5-34)
Demo 5-8 Operating Activities Section—Direct Method (pg. 5-34)
Direct Method for Retailer or Manufacturer (pg. 5-36)
Review 5-8 Operating Activities Section—Direct Method (pg. 5-36)
Questions (pg. 5-37)
Data Analytics (pg. 5-37)
Data Visualization (pg. 5-38)
Multiple Choice (pg. 5-38)
Brief Exercises (pg. 5-39)
Exercises (pg. 5-41)
Problems (pg. 5-51)
Accounting Decisions and Judgments (pg. 5-59)
Appendix—Multiple Choice (pg. 5-61)
Appendix—Brief Exercises (pg. 5-61)
Appendix—Exercises (pg. 5-62)
Appendix—Problems (pg. 5-63)
Answers to Review Exercises (pg. 5-64)
Chapter 6: Time Value of Money (pg. 6-1)
LO 6-1 Explain the calculation of compound interest (pg. 6-3)
Annual Compounding (pg. 6-3)
Quarterly Compounding (pg. 6-3)
Compounding Options (pg. 6-4)
Demo 6-1 Compound Interest (pg. 6-4)
Review 6-1 Compound Interest (pg. 6-4)
LO 6-2 Apply future value concepts to a single amount (pg. 6-5)
Future Value of a Single Amount—Computation through Formula (pg. 6-6)
Future Value of a Single Amount—Computation through Excel (pg. 6-6)
Future Value of a Single Amount—Change in Values of Arguments (pg. 6-7)
Demo 6-2 Future Value of a Single Amount (pg. 6-7)
Review 6-2 Future Value of a Single Amount (pg. 6-7)
LO 6-3 Apply present value concepts to a single amount (pg. 6-8)
Present Value of a Single Amount—Computation through Formula (pg. 6-8)
Present Value of a Single Amount—Computation through Excel (pg. 6-8)
Present Value of a Single Amount—Change in Values of Arguments (pg. 6-9)
Demo 6-3A Present Value of a Single Amount (pg. 6-9)
Demo 6-3B Solving for Unknown Arguments (pg. 6-9)
Fair Value Measurement—Discount Rate Adjustment Technique and Expected Cash Flow Technique (pg. 6-10)
Demo 6-3C Fair Value Measurement—Expected Cash Flow Technique (pg. 6-11)
Review 6-3 Present Value (pg. 6-11)
LO 6-4 Apply future value concepts to an ordinary annuity and an annuity due (pg. 6-13)
Future Value of an Ordinary Annuity—Computation through Formula (pg. 6-13)
Future Value of an Ordinary Annuity—Computation through Excel (pg. 6-13)
Future Value of an Ordinary Annuity—Change in Values of Arguments (pg. 6-14)
Demo 6-4A Future Value of an Ordinary Annuity (pg. 6-14)
Future Value of an Annuity Due—Computation through Formula (pg. 6-14)
Future Value of an Annuity Due—Computation through Excel (pg. 6-15)
Demo 6-4B Future Value of an Annuity Due (pg. 6-15)
Future Value of a Deferred Annuity (pg. 6-15)
Demo 6-4C Future Value of a Deferred Annuity (pg. 6-15)
Review 6-4 Future Value of Annuities (pg. 6-16)
LO 6-5 Apply present value concepts to an ordinary annuity and an annuity due (pg. 6-16)
Present Value of an Ordinary Annuity—Computation through Formula (pg. 6-16)
Present Value of an Ordinary Annuity—Computation through Excel (pg. 6-17)
Present Value of an Ordinary Annuity—Change in Values of Arguments (pg. 6-17)
Demo 6-5A Present Value of an Ordinary Annuity (pg. 6-17)
Present Value of an Annuity Due—Computation through Formula (pg. 6-17)
Present Value of an Annuity Due—Computation through Excel (pg. 6-18)
Demo 6-5B Present Value of an Annuity Due (pg. 6-18)
Demo 6-5C Present Value of a Deferred Annuity (pg. 6-18)
Demo 6-5C (pg. 6-18)
Review 6-5 Present Value of Annuities (pg. 6-19)
LO 6-6 Apply time value of money concept to common accounting scenarios (pg. 6-19)
Bond Issuance Price (pg. 6-19)
Issuance of Bonds—Annual Interest (pg. 6-19)
Issuance of Bonds—Semiannual Interest (pg. 6-20)
Lease Payment (pg. 6-20)
Pension Obligations (pg. 6-20)
Lease or Buy (pg. 6-20)
Debt Retirement (pg. 6-21)
Demo 6-6 Application of Time Value of Money (pg. 6-21)
Review 6-6 Application of Time Value of Money (pg. 6-22)
Management Judgment (pg. 6-22)
Estimated Rate Requires Judgment (pg. 6-22)
Estimated Payment Requires Judgment (pg. 6-22)
Estimated Number of Periods Requires Judgment (pg. 6-22)
Discount Rate Adjustment Technique vs. Expected Cash Flow Technique (pg. 6-23)
APPENDIX 6A LO 6-7 Apply time value of money concept to bond discount amortization (pg. 6-23)
Effective Interest Method of Amortization (pg. 6-23)
Demo 6-7 Bond Discount Amortization (pg. 6-24)
Review 6-7 Note Discount Amortization Schedule (pg. 6-24)
APPENDIX 6B LO 6-8 Apply time value of money concept using a financial calculator and compound int (pg. 6-24)
Time Value of Money—Financial Calculator (pg. 6-25)
Demo 6-8A Time Value of Money—Financial Calculator (pg. 6-25)
Time Value of Money—Compound Interest Tables (pg. 6-25)
Future Value of a Single Amount—Computation through Table (pg. 6-25)
Present Value of a Single Amount—Computation through Table (pg. 6-26)
Determination of Interest Rate—Computation through Table with Interpolation (pg. 6-26)
Future Value of an Ordinary Annuity—Computation through Table (pg. 6-26)
Future Value of Annuity Due—Computation through Table (pg. 6-26)
Present Value of an Ordinary Annuity—Computation through Table (pg. 6-27)
Present Value of Annuity Due—Computation through Table (pg. 6-27)
Demo 6-8B Time Value of Money—Compound Interest Tables (pg. 6-27)
Review 6-8 Compound Interest Table (pg. 6-31)
Questions (pg. 6-31)
Data Analytics (pg. 6-32)
Data Visualization (pg. 6-32)
Multiple Choice (pg. 6-32)
Brief Exercises (pg. 6-33)
Exercises (pg. 6-35)
Problems (pg. 6-40)
Accounting Decisions and Judgments (pg. 6-45)
Appendices—Brief Exercises (pg. 6-47)
Appendices—Exercises (pg. 6-48)
Appendices—Problems (pg. 6-48)
Answers to Review Exercises (pg. 6-49)
Chapter 7: Revenue Recognition (pg. 7-1)
LO 7-1 Apply the five-step revenue recognition process (pg. 7-3)
Demo 7-1 Application of the Five-Step Revenue Recognition Process (pg. 7-4)
Review 7-1 Application of the Five-Step Revenue Recognition Process (pg. 7-5)
LO 7-2 Identify the contract with the customer—Step 1 (pg. 7-5)
Conditions of a Valid Contract (pg. 7-6)
Demo 7-2 Validity of a Contract (pg. 7-7)
Review 7-2 Validity of a Contract (pg. 7-8)
LO 7-3 Identify the performance obligations in the contract—Step 2 (pg. 7-9)
Identification of Separate Performance Obligation(s) (pg. 7-9)
Capable of Being Distinct (pg. 7-9)
Distinct within the Context of a Contract (pg. 7-10)
Materiality Threshold (pg. 7-10)
Licenses, Warranties, and Customer Options (pg. 7-10)
Demo 7-3 Identification of Separate Performance Obligation(s) (pg. 7-11)
Review 7-3 Identification of Separate Performance Obligation(s) (pg. 7-13)
Identification of Separate Performance Obligation(s) (pg. 7-13)
LO 7-4 Determine the transaction price—Step 3 (pg. 7-14)
Fixed Consideration (pg. 7-14)
Variable Consideration (pg. 7-14)
Demo 7-4A Estimating Transaction Price When It Includes Variable Consideration (pg. 7-15)
Consideration Payable to a Customer (pg. 7-16)
Demo 7-4B Reducing the Transaction Price for Consideration Payable (pg. 7-17)
Refund Liability—Sales with Right of Return (pg. 7-17)
Time Value of Money (pg. 7-17)
Noncash Consideration (pg. 7-18)
Review 7-4 Transaction Price (pg. 7-18)
LO 7-5 Allocate the transaction price to performance obligations in the contract—Step 4 (pg. 7-19)
Observable Selling Price? (pg. 7-19)
Estimated Selling Price? (pg. 7-19)
Demo 7-5A Transaction Price Allocation—Standalone Selling Prices Are Observable (pg. 7-20)
Demo 7-5B Transaction Price Allocation—Standalone Selling Prices Are Estimated (pg. 7-21)
Estimating Standalone Selling Price for Customer Options (pg. 7-22)
Demo 7-5C Transaction Price Allocation—Customer Options (pg. 7-22)
Review 7-5 Allocation of Transaction Price (pg. 7-23)
LO 7-6 Recognize revenue when (or as) the seller satisfies a performance obligation—Step 5 (pg. 7-24)
Recognition of Revenue Over Time (pg. 7-24)
Contract Liabilities and Contract Assets (pg. 7-25)
Recognition of Revenue at a Point in Time (pg. 7-25)
Demo 7-6A Recognition of Revenue at a Point in Time (pg. 7-26)
Demo 7-6B Recognition of Revenue Over Time (pg. 7-28)
Licenses (pg. 7-30)
Demo 7-6C Recognition of License Revenue (pg. 7-30)
Review 7-6 Revenue Recognition (pg. 7-31)
LO 7-7 Recognize revenue after a contract modification (pg. 7-32)
Demo 7-7 Revenue Recognition with a Contract Modification (pg. 7-33)
Review 7-7 Contract Modification (pg. 7-34)
LO 7-8 Recognize revenue in more complex revenue arrangements (pg. 7-34)
Bill-and-Hold Arrangement (pg. 7-34)
Demo 7-8A Transfer of Control under a Bill-and-Hold Arrangement (pg. 7-35)
Consignment Arrangement (pg. 7-35)
Demo 7-8B Transfer of Control under a Consignment Arrangement (pg. 7-36)
Repurchase Arrangement (pg. 7-36)
Forward Arrangement and Call Option (pg. 7-36)
Put Option (pg. 7-37)
Demo 7-8C Transfer of Control under Repurchase Arrangement (pg. 7-37)
Principal/Agent Arrangement (pg. 7-38)
Demo 7-8D Estimating Revenue for Principal and Agent (pg. 7-38)
Review 7-8 Complex Revenue Arrangements (pg. 7-40)
LO 7-9 Describe accounting for contract costs and disclosure requirements for revenue recognition (pg. 7-40)
Contract Costs (pg. 7-41)
Accounting for and Reporting of Contract Costs (pg. 7-42)
Demo 7-9 (pg. 7-42)
Financial Reporting (pg. 7-42)
Financial Statement Disclosures (pg. 7-43)
Contract Costs and Revenue Disclosures (pg. 7-44)
Review 7-9 (pg. 7-44)
Management Judgment (pg. 7-44)
APPENDIX 7A LO 7-10 Apply the revenue recognition process to long-term contracts expected to be (pg. 7-45)
Demo 7-10A Long-Term Contract: Revenue Recognized Over Time—Cost-to-Cost Basis (pg. 7-46)
Review 7-10 Long-Term Profitable Construction Project (pg. 7-49)
Overall Loss on an Unprofitable Contract (pg. 7-50)
APPENDIX 7B LO 7-11 Apply the revenue recognition process to long-term contracts expected to be u (pg. 7-50)
Demo 7-11A Overall Loss on an Unprofitable Contract (pg. 7-50)
Demo 7-11B Current Period Loss on Overall Profitable Contract (pg. 7-52)
Review 7-11 Unprofitable Construction Project (pg. 7-53)
Questions (pg. 7-53)
Data Analysis (pg. 7-53)
Data Visualization (pg. 7-54)
Multiple Choice (pg. 7-54)
Brief Exercises (pg. 7-56)
Exercises (pg. 7-61)
Problems (pg. 7-71)
Accounting Decisions and Judgments (pg. 7-74)
Appendices—Questions (pg. 7-78)
Appendices—Multiple Choice (pg. 7-78)
Appendices—Brief Exercises (pg. 7-79)
Appendices—Exercises (pg. 7-79)
Appendices—Problems (pg. 7-81)
Answers to Review Exercises (pg. 7-83)
Chapter 8: Cash and Receivables (pg. 8-1)
LO 8-1 Classify cash, cash equivalents, restricted cash, and compensating balances (pg. 8-3)
Demo 8-1 Reporting Cash, Cash Equivalents, and Other Current Assets (pg. 8-4)
Review 8-1 Classification of Cash-Related Items (pg. 8-5)
LO 8-2 Account for sales and collections on account including the impact of cash discounts (pg. 8-6)
Demo 8-2A Accounting for Sales and Collections under the Gross Method (pg. 8-7)
Demo 8-2B Accounting for Sales and Collections under the Net Method (pg. 8-8)
Comparing the Gross and Net Methods of Accounting for Discounts (pg. 8-9)
Review 8-2 Gross Method versus Net Method in Recording Cash Discounts (pg. 8-10)
LO 8-3 Account for the impact of sales returns and allowances (pg. 8-10)
Demo 8-3 Accounting for Sales Returns (pg. 8-11)
Review 8-3 Accounting for Sales Returns (pg. 8-12)
LO 8-4 Measure and record accounts receivable at net amount expected to be collected (pg. 8-12)
Allowance Method (pg. 8-12)
Demo 8-4A Entries Under the Allowance Method (pg. 8-13)
Estimating Expected Credit Losses (pg. 8-15)
Reflect Expected Credit Losses Over the Receivable’s Life (pg. 8-15)
Consider Relevant Available Information (pg. 8-15)
Consider Receivables as a Pool When Risks Are Similar (pg. 8-16)
Recognize Credit Loss Even if Remote (pg. 8-16)
Demo 8-4B Adjusting Accounts Receivable to Net Amount Expected to Be Collected (pg. 8-17)
Review 8-4 Measuring and Recording Receivables at Net Amount Expected to Be Collected (pg. 8-19)
Measuring and Recording Receivables at Net Amount Expected to Be Collected (pg. 8-19)
LO 8-5 Measure and record notes receivable (pg. 8-20)
Note Received in Exchange for Cash (pg. 8-20)
Demo 8-5A Noncurrent Note Receivable [Stated Rate = 10%; Market Rate = 10%] (pg. 8-20)
Note Received in Exchange for Noncash Item (pg. 8-21)
Demo 8-5B Noncurrent Note Receivable [Stated Rate = 3%; Market Rate = 10%] (pg. 8-22)
Review 8-5 Measuring of Note Receivable and Interest (pg. 8-27)
LO 8-6 Account for the sale of receivables and use as collateral for borrowing (pg. 8-28)
Using Accounts Receivable as Collateral for Borrowing (pg. 8-28)
Demo 8-6A Using Receivables as Collateral for Borrowing (pg. 8-29)
Sale of Accounts Receivable Without Recourse (pg. 8-29)
Demo 8-6B Sale of Receivables Without Recourse (pg. 8-30)
Sale of Accounts Receivable with Recourse (pg. 8-30)
Demo 8-6C Sale of Receivables with Recourse (pg. 8-31)
Discounting a Note Receivable (pg. 8-31)
Demo 8-6D Discounting a Note Receivable (pg. 8-32)
Review 8-6 Secured Borrowings and Sales of Receivables (pg. 8-33)
LO 8-7 Describe receivables disclosures and ratio analyses (pg. 8-33)
Receivable Disclosures (pg. 8-33)
Concentration of Credit Risk (pg. 8-33)
Accounts Receivable Ratios (pg. 8-34)
Demo 8-7 Accounts Receivable Ratios (pg. 8-34)
Review 8-7 Accounts Receivable Ratios (pg. 8-35)
Management Judgment (pg. 8-36)
Accounting for Receivables (pg. 8-36)
Guidance for Management Judgment (pg. 8-36)
APPENDIX 8A LO 8-8 Apply cash controls (pg. 8-36)
Cash Reconciliations (pg. 8-37)
Demo 8-8A Cash Reconciliations (pg. 8-37)
Bank Reconciliation (pg. 8-38)
Demo 8-8B Bank Reconciliation (pg. 8-38)
Review 8-8 Cash Controls (pg. 8-41)
APPENDIX 8B LO 8-9 Account for impairment and restructuring of noncurrent receivables (pg. 8-42)
Impairment of Noncurrent Receivable (pg. 8-42)
Demo 8-9A Recording Impairment of a Note Receivable (pg. 8-43)
Settlement or Modification of Noncurrent Receivable (pg. 8-44)
Demo 8-9B Recording Impairment of a Note Receivable (pg. 8-43)
Demo 8-9B Creditor Restructures Receivable Due to Debtor Financial Distress (pg. 8-45)
Review 8-9 Impairment of a Note Receivable (pg. 8-47)
Questions (pg. 8-47)
Data Analytics (pg. 8-48)
Data Visualization (pg. 8-48)
Multiple Choice (pg. 8-48)
Brief Exercises (pg. 8-50)
Exercises (pg. 8-54)
Problems (pg. 8-62)
Accounting Decisions and Judgments (pg. 8-68)
Appendices—Questions (pg. 8-72)
Appendices—Brief Exercises (pg. 8-72)
Appendices—Exercises (pg. 8-73)
Appendices—Problems (pg. 8-76)
Answers to Review Exercises (pg. 8-78)
Chapter 9: Inventory: Measurement (pg. 9-1)
LO 9-1 Determine the initial recognition and measurement of inventory (pg. 9-3)
Recognition of Inventory (pg. 9-3)
Initial Measurement of Inventory (pg. 9-4)
Demo 9-1 Recognition and Measurement of Inventory (pg. 9-5)
Review 9-1 Measurement of Ending Inventory (pg. 9-6)
LO 9-2 Demonstrate accounting in a periodic inventory system (pg. 9-7)
Demo 9-2A Periodic Inventory System—Gross Method (pg. 9-8)
Demo 9-2B Periodic Inventory System—Net Method (pg. 9-9)
Review 9-2 Periodic Inventory System (pg. 9-10)
LO 9-3 Demonstrate specific identification, average cost, FIFO, and LIFO in a periodic inventory sy (pg. 9-10)
Inventory Cost-Flow Assumptions in a Periodic Inventory System (pg. 9-10)
Demo 9-3A Specific Identification Method—Periodic Inventory System (pg. 9-11)
Demo 9-3B Average Cost Method-Periodic Inventory System (pg. 9-12)
Demo 9-3C FIFO Method—Periodic Inventory System (pg. 9-13)
Demo 9-3D LIFO Method—Periodic Inventory System (pg. 9-13)
Comparing Inventory Methods (pg. 9-14)
Review 9-3 Inventory Methods under the Periodic Inventory System (pg. 9-15)
LO 9-4 Demonstrate accounting in a perpetual inventory system (pg. 9-16)
Demo 9-4A Perpetual Inventory System—Gross Method (pg. 9-16)
Demo 9-4B Perpetual Inventory System—Net Method (pg. 9-18)
Review 9-4 Perpetual Inventory System (pg. 9-18)
LO 9-5 Demonstrate moving average, FIFO, and LIFO in a perpetual inventory system (pg. 9-18)
Demo 9-5A Moving Average Method—Perpetual Inventory System (pg. 9-19)
Demo 9-5B FIFO Method—Perpetual Inventory System (pg. 9-20)
Demo 9-5C LIFO Method—Perpetual Inventory System (pg. 9-20)
Review 9-5 Inventory Methods under a Perpetual Inventory System (pg. 9-21)
LO 9-6 Explain and compute a LIFO reserve (pg. 9-22)
Demo 9-6 LIFO Reserve (pg. 9-22)
Review 9-6 LIFO Reserve (pg. 9-23)
LO 9-7 Describe and compute the effect of LIFO liquidation (pg. 9-23)
Demo 9-7 Computation of LIFO Liquidation (pg. 9-24)
Review 9-7 LIFO Liquidation (pg. 9-24)
LO 9-8 Apply the dollar-value LIFO method (pg. 9-25)
Demo 9-8 Dollar-Value LIFO Method (pg. 9-26)
Review 9-8 Dollar-Value LIFO Method (pg. 9-27)
LO 9-9 Perform inventory ratio analysis and interpretation (pg. 9-27)
Inventory Ratios (pg. 9-27)
Demo 9-9 Inventory Ratio Analysis and Interpretation (pg. 9-28)
Review 9-9 Inventory Ratio Analysis (pg. 9-29)
Management Judgment (pg. 9-29)
Management Choice of Inventory Method? (pg. 9-29)
Disclosure of Inventory Method (pg. 9-30)
Management Decisions in Measuring Inventory (pg. 9-30)
Questions (pg. 9-30)
Data Analytics (pg. 9-31)
Data Visualization (pg. 9-32)
Multiple Choice (pg. 9-32)
Brief Exercises (pg. 9-34)
Exercises (pg. 9-37)
Problems (pg. 9-45)
Accounting Decisions and Judgments (pg. 9-52)
Answers to Review Exercises (pg. 9-56)
Chapter 10: Inventory: Additional Issues (pg. 10-1)
LO 10-1 Apply lower of cost or net realizable value rule to inventory (pg. 10-3)
Lower of Cost or Net Realizable Value Rule (pg. 10-3)
Application of the Lower of Cost or Net Realizable Rule (pg. 10-4)
Recognition of Inventory Losses (pg. 10-4)
Demo 10-1 Lower of Cost or Net Realizable Value Rule (pg. 10-5)
Review 10-1 Application of Lower of Cost or Net Realizable Value Rule (pg. 10-6)
LO 10-2 Apply lower of cost or market rule to inventory (pg. 10-7)
Inconsistency in Applying the Inventory Adjustment Rules? (pg. 10-7)
Demo 10-2 Lower of Cost or Market Rule (pg. 10-8)
Review 10-2 Application of Lower of Cost or Market Rule (pg. 10-9)
LO 10-3 Demonstrate the relative sales value method to allocate costs to inventory (pg. 10-9)
Demo 10-3 Relative Sales Value Method (pg. 10-9)
Review 10-3 Relative Sales Value Method (pg. 10-10)
LO 10-4 Demonstrate the gross profit method to estimate inventory (pg. 10-11)
Gross Profit Method—Uses and Limitations (pg. 10-11)
Demo 10-4 Estimate Inventory Using Gross Profit Method (pg. 10-12)
Review 10-4 Gross Profit Method (pg. 10-12)
LO 10-5 Demonstrate accounting for purchase commitments (pg. 10-12)
Demo 10-5 Purchase Commitment (pg. 10-13)
Review 10-5 Purchase Commitment (pg. 10-14)
LO 10-6 Describe the accounting treatment for changes in inventory methods (pg. 10-14)
Demo 10-6A Change in Inventory Method—Retrospective Approach (pg. 10-15)
Demo 10-6B Change in Inventory Method—Prospective Approach (pg. 10-16)
Review 10-6 Change in Inventory Method (pg. 10-16)
LO 10-7 Describe accounting treatment of inventory errors (pg. 10-16)
Demo 10-7 Inventory Errors (pg. 10-17)
Review 10-7 Inventory Errors (pg. 10-18)
LO 10-8 Estimate ending inventory using the average cost and conventional retail methods (pg. 10-19)
Retail Inventory Methods—Average Cost and Conventional (pg. 10-19)
Demo 10-8A Retail Inventory Method—Average Cost (pg. 10-20)
Demo 10-8B Retail Inventory Method—Conventional (pg. 10-21)
Complicating Factors for Retail Inventory Methods (pg. 10-21)
Demo 10-8C Retail Inventory Method—Conventional with Complications (pg. 10-22)
Review 10-8 Retail Inventory Method—Conventional with Complications (pg. 10-23)
Management Judgment (pg. 10-24)
Lower of Cost or Net Realizable Value (or Market) Rule (pg. 10-24)
Retail Inventory Methods (pg. 10-24)
Purchase Commitments (pg. 10-24)
Gross Profit Method (pg. 10-24)
APPENDIX 10A LO 10 Estimate ending inventory using LIFO retail and dollar-value LIFO retail method (pg. 10-25)
LIFO Retail Method (pg. 10-25)
Demo 10-9A LIFO Retail Method (pg. 10-25)
Dollar-Value LIFO Retail Method (pg. 10-26)
Demo 10-9B Dollar-Value LIFO Retail Method (pg. 10-26)
Review 10-9 LIFO Retail and Dollar-Value LIFO Retail Methods (pg. 10-29)
Questions (pg. 10-29)
Data Analytics (pg. 10-30)
Data Visualization (pg. 10-30)
Multiple Choice (pg. 10-30)
Brief Exercises (pg. 10-31)
Exercises (pg. 10-34)
Problems (pg. 10-41)
Accounting Decisions and Judgments (pg. 10-46)
Appendix—Questions (pg. 10-47)
Appendix—Brief Exercises (pg. 10-47)
Appendix—Exercises (pg. 10-48)
Appendix—Problems (pg. 10-49)
Answers to Review Exercises (pg. 10-50)
Chapter 11: Property, Plant, and Equipment: Acquisition and Disposition (pg. 11-1)
LO 11-1 Determine costs to capitalize for land, land improvements, equipment, buildings, and constr (pg. 11-3)
Categories of Fixed Assets (pg. 11-3)
Demo 11-1A Acquisition Costs Classified as Property, Plant, and Equipment (pg. 11-5)
Self-Constructed Assets (pg. 11-6)
Demo 11-1B Initial Recording of Self-Constructed Assets (pg. 11-6)
Review 11-1 Property, Plant, and Equipment Cost Classification (pg. 11-7)
LO 11-2 Determine costs to capitalize for lump-sum purchases of property, plant, and equipment (pg. 11-7)
Demo 11-2 Lump-Sum Purchase (pg. 11-8)
Review 11-2 Lump-Sum Purchase (pg. 11-8)
LO 11-3 Account for acquisition of property, plant, and equipment through debt and equity issuances (pg. 11-9)
Acquisition of Property, Plant, and Equipment Using Debt (pg. 11-9)
Demo 11-3A Acquisition of Equipment Using a Note Payable (pg. 11-9)
Acquisition of Property, Plant, and Equipment Using Equity (pg. 11-11)
Demo 11-3B Acquisition of Equipment Using Common Stock (pg. 11-11)
Review 11-3 Acquisition of Property, Plant, and Equipment Using Debt and Equity (pg. 11-12)
LO 11-4 Calculate capitalized interest (pg. 11-12)
Actual Interest (pg. 11-13)
Avoidable Interest (pg. 11-13)
Interest Capitalization (pg. 11-14)
Demo 11-4 (pg. 11-14)
Interest Capitalization (pg. 11-16)
Review 11-4 (pg. 11-16)
Calculation of Capitalized Interest (pg. 11-12)
LO 11-5 Account for asset retirement obligations (pg. 11-17)
Demo 11-5 Asset Retirement Obligation (pg. 11-18)
Review 11-5 Asset Retirement Obligation (pg. 11-19)
LO 11-6 Account for property, plant, and equipment related costs after acquisition (pg. 11-19)
Demo 11-6 Accounting for Costs Subsequent to Acquisition (pg. 11-20)
Review 11-6 Accounting for Costs Subsequent to Acquisition (pg. 11-21)
LO 11-7 Account for disposal of property, plant, and equipment (pg. 11-22)
Demo 11-7 Disposal of Property, Plant, and Equipment (pg. 11-22)
Review 11-7 Disposal of Property, Plant, and Equipment (pg. 11-23)
LO 11-8 Account for contributed property, plant, and equipment (pg. 11-23)
Demo 11-8 Accounting for Receipt of a Donated Building (pg. 11-24)
Review 11-8 Receipt of a Donated Building (pg. 11-24)
LO 11-9 Account for exchange of property, plant, and equipment (pg. 11-25)
Demo 11-9A Exchange of Equipment—Full Gain and Loss Recognized (pg. 11-25)
Demo 11-9B Exchange of Equipment—Partial or No Gain Recognized (pg. 11-27)
Review 11-9 Exchange of Assets (pg. 11-28)
Management Judgment (pg. 11-28)
Capitalizing Fixed Assets (pg. 11-28)
Questions (pg. 11-29)
Data Analytics (pg. 11-30)
Data Visualization (pg. 11-30)
Multiple Choice (pg. 11-30)
Brief Exercises (pg. 11-31)
Exercises (pg. 11-34)
Problems (pg. 11-42)
Accounting Decisions and Judgments (pg. 11-48)
Answers to Review Exercises (pg. 11-52)
Chaper 12: Depreciation, Impairments, and Depletion (pg. 12-1)
LO 12-1 Calculate depreciation using straight-line, sum-of-the-years’-digits, declining-balance, a (pg. 12-3)
Calculation of Depreciation Expense (pg. 12-4)
Straight-Line Depreciation Method (pg. 12-4)
Demo 12-1A Straight-Line Depreciation Method (pg. 12-4)
Sum-of-the-Years’-Digits Depreciation Method (pg. 12-5)
Demo 12-1B Sum-of-the-Years’-Digits Depreciation Method (pg. 12-6)
Declining-Balance Depreciation Method (pg. 12-6)
Demo 12-1C Double-Declining-Balance Depreciation Method (pg. 12-7)
Units-of-Production Method (pg. 12-8)
Demo 12-1D Units-of-Production Depreciation Method (pg. 12-8)
Comparison of Depreciation Methods (pg. 12-9)
Depreciation Methods (pg. 12-10)
Review 12-1 Depreciation Methods (pg. 12-10)
LO 12-2 Account for depreciation in partial periods (pg. 12-11)
Demo 12-2A Depreciation Prorated for Partial Period (pg. 12-11)
Demo 12-2B Policy Convention Applied to Partial Period (pg. 12-13)
Review 12-2 Partial Period Depreciation (pg. 12-13)
LO 12-3 Calculate depreciation using group and composite depreciation methods (pg. 12-14)
Demo 12-3 Composite Depreciation Method (pg. 12-15)
Review 12-3 Composite Depreciation Method (pg. 12-16)
LO 12-4 Account for changes in estimate as they relate to depreciation (pg. 12-16)
Demo 12-4 Change in Accounting Estimate (pg. 12-17)
Review 12-4 Change in Accounting Estimate (pg. 12-17)
LO 12-5 Account for changes in depreciation methods (pg. 12-18)
Demo 12-5 Change in Depreciation Method (pg. 12-18)
Review 12-5 Change in Depreciation Method (pg. 12-19)
LO 12-6 Account for errors in reporting property, plant, and equipment (pg. 12-19)
Demo 12-6 Correction of Error (pg. 12-19)
Review 12-6 Correction of Depreciation Error (pg. 12-20)
LO 12-7 Account for impairment of property, plant, and equipment (pg. 12-20)
Identification of Asset Impairment (pg. 12-20)
Indicators of Impairment (pg. 12-20)
Step 1—Asset Recoverability Test (pg. 12-21)
Step 2—Impairment Test (pg. 12-21)
Demo 12-7 Impairment of Fixed Assets (pg. 12-22)
Review 12-7 Impairment of Fixed Assets (pg. 12-23)
LO 12-8 Account for assets held for sale (pg. 12-23)
Demo 12-8 Asset Held for Sale (pg. 12-24)
Review 12-8 Assets Held for Sale (pg. 12-25)
LO 12-9 Describe property, plant, and equipment disclosures and ratio analyses (pg. 12-25)
Disclosures (pg. 12-25)
Ratio Analysis (pg. 12-25)
Relation between Depreciation Method and Return on Assets (pg. 12-25)
Demo 12-9 Ratio Analysis (pg. 12-26)
Review 12-9 Ratio Analysis (pg. 12-27)
LO 12-10 Record acquisition and depletion of natural resources (pg. 12-27)
Demo 12-10A Natural Resource Acquisition, Depletion, and Sale (pg. 12-28)
Exploration Costs in Oil and Gas (pg. 12-29)
Demo 12-10B Depletion of Exploration Costs in Oil and Gas (pg. 12-30)
Review 12-10 Accounting for Natural Resources (pg. 12-30)
Management Judgment (pg. 12-31)
Grouping Assets for Impairment Testing (pg. 12-31)
Applying Impairment Testing (pg. 12-31)
Management Judgment Highlighted in Financial Reporting (pg. 12-31)
APPENDIX 12A LO 12-11 Calculate MACRS (tax) depreciation (pg. 12-32)
Demo 12-11 MACRS Depreciation Calculation (pg. 12-32)
Review 12-11 MACRS Depreciation (pg. 12-33)
Questions (pg. 12-33)
Data Analytics (pg. 12-34)
Data Visualization (pg. 12-34)
Multiple Choice (pg. 12-34)
Brief Exercises (pg. 12-35)
Exercises (pg. 12-38)
Problems (pg. 12-46)
Accounting Decisions and Judgments (pg. 12-51)
Appendix—Questions (pg. 12-55)
Appendix—Brief Exercises (pg. 12-56)
Appendix—Exercises (pg. 12-56)
Appendix—Problem (pg. 12-56)
Answers to Review Exercises (pg. 12-56)
Chapter 13: Intangible Assets and Goodwill (pg. 13-1)
LO 13-1 Identify and classify intangible items (pg. 13-3)
Identification of Assets: Intangible Assets and Goodwill (pg. 13-3)
Recognition of Expenses: Internally Generated Intangible Assets and Goodwill (pg. 13-6)
Demo 13-1 Classification of Intangible Items (pg. 13-7)
Review 13-1 Classification of Intangible Items (pg. 13-8)
LO 13-2 Determine the initial and subsequent measurement of finite life intangible assets (pg. 13-8)
Initial Measurement of Finite Life Intangible Assets (pg. 13-8)
Subsequent Measurement of Finite Life Intangible Assets (pg. 13-9)
Demo 13-2 Initial and Subsequent Measurement of Intangible Asset (pg. 13-9)
Review 13-2 Subsequent Measurement of Finite Life Intangible Assets (pg. 13-11)
LO 13-3 Account for impairment and derecognition of finite life intangible assets (pg. 13-11)
Impairment of Finite Life Intangible Assets (pg. 13-11)
Demo 13-3A Impairment of Finite Life Intangible Asset—Patent (pg. 13-12)
Derecognition of Finite Life Intangible Assets (pg. 13-12)
Demo 13-3B Derecognition of Intangible Asset—Patent (pg. 13-13)
Review 13-3 Impairment and Derecognition of a Patent (pg. 13-13)
LO 13-4 Account for change in estimate in finite life intangible assets (pg. 13-13)
Demo 13-4 Change in Estimate—Intangible Asset (pg. 13-13)
Review 13-4 Change in Estimate—Patent (pg. 13-14)
LO 13-5 Determine the initial and subsequent measurement of indefinite life intangible assets and go (pg. 13-14)
Indefinite Life Intangible Assets Other than Goodwill (pg. 13-14)
Crypto Asset (pg. 13-14)
Demo 13-5A Adjusting the Carrying Value of Crypto Asset (pg. 13-14)
Goodwill (pg. 13-15)
Demo 13-5B Recording of Goodwill (pg. 13-16)
Review 13-5 Recording of Goodwill (pg. 13-18)
LO 13-6 Account for impairment of indefinite life intangible assets and goodwill (pg. 13-18)
Impairment of Indefinite Life Intangible Assets (pg. 13-19)
Demo 13-6A Impairment of Indefinite Life Intangible Asset—Trade Name (pg. 13-19)
Impairment of Goodwill (pg. 13-20)
Demo 13-6B Impairment of Goodwill (pg. 13-20)
Private Company Council Alternative for Subsequent Measurement of Goodwill (pg. 13-21)
Derecognition of Indefinite Life Intangible Assets (pg. 13-22)
Review 13-6 Impairment of Indefinite Life Goodwill (pg. 13-22)
LO 13-7 Account for research and development costs (pg. 13-22)
Identifying Research and Development Expense (pg. 13-23)
Demo 13-7 Identification of Research and Development Expense (pg. 13-24)
Review 13-7 Research and Development Costs (pg. 13-24)
LO 13-8 Account for Software Costs and Cloud Computing Arrangements (pg. 13-25)
Software developed internally and sold or leased to third party? (pg. 13-25)
Demo 13-8 Accounting for Software Research and Development Costs (pg. 13-26)
Internal-Use Software Either Purchased or Developed Internally (pg. 13-27)
Review 13-8 Accounting for Internally Developed Software Costs (pg. 13-27)
Cloud Computing Arrangement (pg. 13-27)
Management Judgment (pg. 13-29)
Identification of Research and Development Costs (pg. 13-29)
Useful Life (pg. 13-29)
Impairment Testing (pg. 13-29)
Identification of Research and Development Costs (pg. 13-29)
Software Development (pg. 13-29)
Questions (pg. 13-30)
Data Analytics (pg. 13-30)
Data Visualization (pg. 13-30)
Multiple Choice (pg. 13-30)
Brief Exercises (pg. 13-32)
Exercises (pg. 13-35)
Problems (pg. 13-42)
Accounting Decisions and Judgments (pg. 13-46)
Answers to Review Exercises (pg. 13-48)
Chapter 14: Investments in Debt and Equity Securities (pg. 14-1)
Expanded Chapter Preview (pg. 14-3)
LO 14-1 Account for debt securities measured at amortized cost (pg. 14-4)
Held-to-Maturity Securities (pg. 14-4)
Measurement of HTM Securities (pg. 14-5)
HTM Investment Purchased at Face Value (pg. 14-6)
Demo 14-1A Investment in HTM Purchased at Face Value (pg. 14-6)
Investment in HTM Purchased at a Discount—Effective Interest Method (pg. 14-7)
Demo 14-1B Investment in HTM Purchased at a Discount (Effective Interest) (pg. 14-7)
HTM Investment Purchased at a Premium—Effective Interest Method (pg. 14-9)
Demo 14-1C Investment in HTM Purchased at a Premium (Effective Interest) (pg. 14-9)
HTM Investment—Straight-Line Interest Method (pg. 14-11)
Demo 14-1D Investment in HTM Purchased at a Discount (Straight-Line Interest) (pg. 14-11)
Demo 14-1E Investment in HTM Purchased at a Premium (Straight-Line Interest) (pg. 14-12)
Interest Revenue: Straight-line versus Effective Interest Method (pg. 14-12)
Review 14-1 Investment in HTM Securities (pg. 14-13)
LO 14-2 Account for debt securities measured at FV?NI with fair value adjustments at sale date and (pg. 14-13)
Trading Securities (pg. 14-13)
Demo 14-2A Investment in Trading Securities (pg. 14-14)
Fair Value Option—Debt Securities (pg. 14-16)
Demo 14-2B Investment Using the Fair Value Option (pg. 14-16)
Review 14-2 Investment in Trading Securities (pg. 14-17)
LO 14-3 Account for debt securities measured at FV-OCI with fair value adjustments at sale date and (pg. 14-17)
Available-for-Sale Securities (pg. 14-17)
Demo 14-3A Investment in Available-for-Sale Securities (pg. 14-18)
Demo 14-3B Portfolio of Available-for-Sale Securities (pg. 14-21)
Review 14-3 Investment in Available-for-Sale Securities (pg. 14-22)
Review of Accounting for Debt Securities (pg. 14-23)
Financial Presentation and Disclosure Requirements for Debt Securities (pg. 14-23)
LO 14-4 Account for equity securities measured at FV?NI with fair value adjustments at sale date and (pg. 14-24)
Equity investments measured at FV-NI (pg. 14-24)
Demo 14-4 Investment in Equity Securities Measured at FV?NI (pg. 14-25)
Review 14-4 Investment in Equity Securities Measured at FV?NI (pg. 14-27)
LO 14-5 Account for equity securities following the equity method (pg. 14-27)
Demo 14-5 Investment in Equity Securities Using the Equity Method (pg. 14-29)
Fair Value Option (pg. 14-30)
Review 14-5 Investment in Equity Securities Using the Equity Method (pg. 14-30)
Review of Accounting for Equity Securities (pg. 14-31)
Financial Presentation and Disclosure Requirements (pg. 14-31)
LO 14-6 Adjust debt and equity securities for impairment (pg. 14-32)
Held-to-Maturity Debt Investment (pg. 14-32)
Available-for-Sale Debt Investment (pg. 14-32)
Equity Method Investment (pg. 14-33)
Demo 14-6 Loss on Impairment of Investments (pg. 14-33)
Review 14-6 Accounting for Impairment Loss on AFS Investments (pg. 14-35)
Management Judgment (pg. 14-35)
Classification of Debt Securities (pg. 14-35)
Classification of Equity Securities (pg. 14-35)
Estimating Fair Value (pg. 14-35)
Impairment of Certain Securities (pg. 14-35)
APPENDIX 14A LO 14-7 Account for debt securities measured at FV?NI with fair value adjustments onl (pg. 14-36)
Trading Securities (pg. 14-36)
Demo 14-7A Investment in Trading Securities (pg. 14-37)
Fair Value Option—Debt Securities (pg. 14-39)
Demo 14-7B Investment Using the Fair Value Option (pg. 14-39)
Review 14-7 Investment in Trading Securities (pg. 14-39)
Investment in Trading Securities (pg. 14-39)
APPENDIX 14B LO 14-8 Account for debt securities measured at FV-OCI with fair value adjustments on (pg. 14-39)
Available-for-Sale Securities (pg. 14-39)
Demo 14-8A Investment in Available-for-Sale Securities (pg. 14-41)
Demo 14-8B Portfolio of Available-for-Sale Securities (pg. 14-43)
Review 14-8 Investment in Available-for-Sale Securities (pg. 14-45)
Review of Accounting for Debt Securities (pg. 14-45)
Financial Presentation and Disclosure Requirements for Debt Securities (pg. 14-45)
APPENDIX 14C LO 14-9 Account for equity securities measured at FV?NI with fair value adjustments on (pg. 14-46)
Equity investments measured at FV-NI (pg. 14-47)
Demo 14-9 Investment in Equity Securities Measured at FV?NI (pg. 14-47)
Review 14-9 Investment in Equity Securities Measured at FV?NI (pg. 14-49)
APPENDIX 14D LO 14-10 Explain the accounting for transfers of investments (pg. 14-50)
Demo 14-10 Accounting for Transfer of Investment (pg. 14-51)
Review 14-10 Accounting for Transfer of Investment (pg. 14-51)
APPENDIX 14E LO 14-11 Describe and account for derivatives (pg. 14-51)
Speculative Derivative Instrument—Call Option on Stock (pg. 14-52)
Demo 14-11A Call Option as a Speculative Investment— Underlying Is Fair Value of Stock (pg. 14-53)
Hedging Derivative Instrument—Put Option as a Fair Value Hedge (pg. 14-53)
Demo 14-11B Put Option as a Fair Value Hedge—Underlying Is an Asset (pg. 14-55)
Hedging Derivative Instrument—Interest Rate Swap as a Fair Value Hedge (pg. 14-56)
Demo 14-11C Interest Rate Swap as a Fair Value Hedge—Underlying Is a Liability (pg. 14-56)
Hedging Derivative Instrument—Cash Flow Hedge (pg. 14-57)
Demo 14-11D Futures Contract as a Cash Flow Hedge—Underlying Is the Market Price of a Purchase (pg. 14-58)
Summary of Derivative Instruments (pg. 14-60)
Review 14-11 Accounting for Derivatives (pg. 14-60)
Questions (pg. 14-61)
Data Analytics (pg. 14-62)
Data Visualization (pg. 14-62)
Multiple Choice (pg. 14-62)
Brief Exercises (pg. 14-64)
Exercises (pg. 14-68)
Problems (pg. 14-76)
Accounting Decisions and Judgments (pg. 14-83)
Appendices—Multiple Choice (pg. 14-86)
Appendices—Brief Exercises (pg. 14-87)
Appendices—Exercises (pg. 14-90)
Appendices—Problems (pg. 14-93)
Appendices—Accounting Decisions and Judgments (pg. 14-96)
Answers to Review Exercises (pg. 14-99)
Chapter 15: Current Liabilities and Contingencies (pg. 15-1)
LO 15-1 Record accounts payable and sales taxes payable (pg. 15-3)
Accounts Payable (pg. 15-3)
Demo 15-1A Accounting for Accounts Payable (pg. 15-4)
Sales Taxes Payable (pg. 15-4)
Demo 15-1B Accounting for Sales Taxes Payable (pg. 15-4)
Review 15-1 Recording Accounts Payable and Sales Taxes Payable (pg. 15-6)
LO 15-2 Record customer deposits and advances (pg. 15-6)
Customer Returnable Deposits (pg. 15-6)
Demo 15-2A Accounting for Returnable Deposits (pg. 15-7)
Customer Advance Payments (pg. 15-8)
Demo 15-2B Accounting for Customer Advance Payments (pg. 15-8)
Review 15-2 Recording Customer Deposits and Advances (pg. 15-10)
LO 15-3 Record accruals for payroll, compensated absences, bonuses, and defined contribution plans (pg. 15-11)
Withholdings from Employee Payroll (pg. 15-11)
Demo 15-3A Recording Employee Payroll Withholdings (pg. 15-11)
Accrual for Employer Payroll Taxes (pg. 15-12)
Demo 15-3B Recording Employer Payroll Taxes (pg. 15-12)
Accrual for Compensated Absences (pg. 15-12)
Demo 15-3C Recording Compensated Absences (pg. 15-13)
Accrual for Bonus Agreements (pg. 15-13)
Demo 15-3D Recording Bonus Accruals (pg. 15-14)
Obligation for Defined Contribution Retirement Plans (pg. 15-14)
Review 15-3 Payroll Withholding and Taxes, Compensated Absences, Bonuses, Pension Payments (pg. 15-15)
LO 15-4 Account for short-term debt and classify debt on the balance sheet (pg. 15-15)
Short-Term Note Payable—Interest-Bearing (pg. 15-16)
Demo 15-4A Short-Term Note Payable—Interest-Bearing (pg. 15-17)
Short-Term Note Payable—Noninterest-Bearing (pg. 15-17)
Demo 15-4B Short-Term Note Payable—Noninterest-Bearing (pg. 15-18)
Balance Sheet Classification of Debt (pg. 15-18)
[1] Criteria to Evaluate Callable Long-Term Debt Obligations (pg. 15-19)
[2] Criteria to Evaluate Debt to be Refinanced (pg. 15-19)
Demo 15-4C Balance Sheet Classification of Debt (pg. 15-20)
Review 15-4 Accounting for and Reporting Debt (pg. 15-21)
LO 15-5 Describe accounting for subsequent events and contingencies including litigation, warranties (pg. 15-22)
Loss Contingencies (pg. 15-23)
Demo 15-5A Accounting for Loss Contingencies (pg. 15-24)
Subsequent Events (pg. 15-25)
Demo 15-5B Accounting for Subsequent Events (pg. 15-27)
Special Loss Contingencies (pg. 15-28)
Demo 15-5C Accounting for Warranty Loss Contingencies (pg. 15-30)
Gain Contingencies (pg. 15-32)
Demo 15-5D Accounting for a Gain Contingency (pg. 15-32)
Review 15-5 Reporting of Contingencies and Subsequent Events (pg. 15-32)
LO 15-6 Explain liability, commitment and contingency disclosures and analyses using liquidity ratio (pg. 15-33)
Disclosure of Current Liabilities, Commitments, and Contingencies (pg. 15-33)
Liquidity Ratios and Analyses (pg. 15-36)
Liquidity Ratios (pg. 15-36)
Demo 15-6 Liquidity Ratios (pg. 15-36)
Review 15-6 Calculating Liquidity Ratios (pg. 15-37)
Management Judgment (pg. 15-37)
Accounting for Contingencies (pg. 15-37)
Ratio Analysis (pg. 15-37)
Questions (pg. 15-38)
Data Analytics (pg. 15-38)
Data Visualization (pg. 15-38)
Multiple Choice (pg. 15-39)
Brief Exercises (pg. 15-40)
Exercises (pg. 15-45)
Problems (pg. 15-53)
Accounting Decisions and Judgments (pg. 15-57)
Answers to Review Exercises (pg. 15-63)
Chapter 16: Long-Term Liabilities (pg. 16-1)
LO 16-1 Identify types and features of bonds (pg. 16-3)
Bond Types (pg. 16-4)
Demo 16-1A Bond Types (pg. 16-4)
Bond Features (pg. 16-4)
Demo 16-1B Bond Features (pg. 16-5)
Review 16-1 Bond Types and Features (pg. 16-6)
LO 16-2 Measure and record bonds at issuance (pg. 16-6)
Bond Selling Price at Issuance (pg. 16-6)
Accrued Interest at Bond Issuance (pg. 16-7)
Demo 16-2 Determining Selling Price of Bonds at Issuance (pg. 16-8)
Review 16-2 Pricing Bonds at Issuance (pg. 16-10)
LO 16-3 Account for bonds issued at face value (pg. 16-10)
Demo 16-3 Account for Bonds Issued at Face Value (pg. 16-11)
Review 16-3 Account for Bonds Issued at Face Value (pg. 16-11)
LO 16-4 Account for bonds issued at a discount (pg. 16-11)
Demo 16-4A Account for Bonds Issued at a Discount [Effective Interest Method] (pg. 16-12)
Debt Issuance Costs (pg. 16-15)
Account for Debt Issuance Costs (pg. 16-16)
Demo 16-4C Account for Debt Issuance Costs (pg. 16-16)
Review 16-4 Account for Bonds Issued at a Discount (pg. 16-17)
LO 16-5 Account for bonds issued at a premium (pg. 16-17)
Demo 16-5A Account for Bonds Issued at a Premium [Effective Interest Method] (pg. 16-18)
Demo 16-5B Account for Bonds Issued at a Premium [Straight-Line Interest Method] (pg. 16-20)
Comparing Debtor and Investor Transactions (pg. 16-21)
Review 16-5 Account for Bonds Issued at a Premium (pg. 16-22)
LO 16-6 Measure and record notes at issuance and after issuance (pg. 16-22)
Notes Payable Issued for Cash (pg. 16-22)
Demo 16-6A Note Payable Issued for Cash (pg. 16-23)
Notes Payable Issued for Noncash Consideration (pg. 16-25)
Demo 16-6B Note Payable Issued for Noncash Consideration (pg. 16-26)
Review 16-6 Accounting for Notes Payable (pg. 16-29)
LO 16-7 Account for extinguishment of debt (pg. 16-29)
Demo 16-7 Extinguishment of Debt (pg. 16-30)
Review 16-7 Accounting for Extinguishment of Debt (pg. 16-32)
LO 16-8 Account for conversion of debt into equity (pg. 16-32)
Demo 16-8 Accounting for Convertible Debt (pg. 16-33)
Review 16-8 Accounting for Conversion of Debt (pg. 16-34)
LO 16-9 Apply the fair value option for liabilities (pg. 16-34)
Demo 16-9 Fair Value Option Accounting for Liabilities (pg. 16-36)
Review 16-9 Accounting for Debt Using the Fair Value Option (pg. 16-36)
LO 16-10 Describe financing disclosures and analyses using leverage ratios (pg. 16-37)
Debt Disclosures with Financial Statements (pg. 16-37)
Demo 16-10A Disclosure of Five-Year Debt Maturities (pg. 16-38)
Financial Leverage Ratios (pg. 16-39)
Demo 16-10B Calculating Financial Leverage Ratios (pg. 16-39)
Review 16-10 Calculating Financial Leverage Ratios (pg. 16-40)
LO 16-11 Account for bonds with stock warrants (pg. 16-40)
Demo 16-11 Accounting for Bonds with Stock Warrants (pg. 16-41)
Review 16-11 Accounting for Bonds with Stock Warrants (pg. 16-42)
Management Judgment (pg. 16-43)
APPENDIX 16A LO 16-12 Account for debt settlement and restructuring (pg. 16-43)
Troubled Debt Restructure—Debtor (pg. 16-44)
Demo 16-12 Debt Restructuring and Debt Settlement—Debtor Perspective (pg. 16-45)
Review 16-12 Debtor’s Accounting for Debt Settlement and Debt Restructuring (pg. 16-47)
Questions (pg. 16-48)
Data Analytics (pg. 16-49)
Data Visualization (pg. 16-49)
Multiple Choice (pg. 16-49)
Brief Exercises (pg. 16-51)
Exercises (pg. 16-54)
Problems (pg. 16-63)
Accounting Decisions and Judgments (pg. 16-67)
Appendix—Questions (pg. 16-74)
Appendix—Brief Exercises (pg. 16-74)
Appendix—Exercises (pg. 16-74)
Answers to Review Exercises (pg. 16-75)
Appendix—Problems (pg. 16-75)
Chapter 17: Accounting for Leases (pg. 17-1)
LO 17-1 Identify a lease, determine lease types for lessee, and classify leases using lease criteria (pg. 17-3)
Determining Whether a Contract Contains a Lease (pg. 17-3)
Right to Control the Use of an Identified Asset (pg. 17-4)
Consideration (pg. 17-4)
Lease Classification Criteria (pg. 17-5)
1. Ownership Transfer (pg. 17-5)
2. Purchase Option (pg. 17-5)
3. Lease Term Length (pg. 17-5)
4. Present Value (PV) of Lease Payments (pg. 17-6)
5. No Alternative Use (pg. 17-7)
Lease Classification (pg. 17-7)
Demo 17-1 Analysis of Lease Classification Criteria (pg. 17-7)
Review 17-1 Determine Lease Classification (pg. 17-8)
LO 17-2 Account for a basic finance lease for a lessee (pg. 17-9)
Demo 17-2 Lessee—Basic Finance Lease (pg. 17-10)
Review 17-2 Accounting for a Basic Finance Lease by a Lessee (pg. 17-13)
LO 17-3 Account for a basic operating lease for a lessee (pg. 17-13)
Demo 17-3 Lessee—Basic Operating Lease (pg. 17-14)
Review 17-3 Accounting for a Basic Operating Lease by a Lessee (pg. 17-16)
LO 17-4 Account for complex finance leases for a lessee (pg. 17-17)
Lease Classification Criterion No. 4 Revisited (pg. 17-17)
Accounting for a Complex Finance Lease (pg. 17-19)
Demo 17-4A Lessee—Finance Lease with Initial Direct Cost, Lease Incentive (pg. 17-21)
Demo 17-4B Lessee—Finance Lease with Guaranteed Residual Value (pg. 17-24)
Demo 17-4C Lessee—Finance Lease with Purchase Option Expected to Exercise (pg. 17-27)
Review 17-4 Finance Lease by Lessee with a Guaranteed Residual Value (pg. 17-28)
LO 17-5 Account for Complex Operating Leases for a Lessee (pg. 17-29)
Demo 17-5 Lessee—Operating Lease with Initial Direct Cost, Incentive, Prepayment (pg. 17-29)
Review 17-5 Operating Lease by Lessee with Renewal Option and Initial Direct Costs (pg. 17-34)
LO 17-6 Determine lease type and account for a basic sales-type lease for a lessor (pg. 17-34)
Lessor Lease Classification?If a lease meets at least one of the five lease classification criteria in Exhibit 17-1 and payments from the lessee are probable, the lessor accounts for the lease as a sales-type lease. If, however, the lessor determines that (pg. 17-34)
Accounting for a Basic Sales-Type Lease?In a sales-type lease, the lessor effectively transfers ownership of the underlying asset to the lessee. We illustrate the accounting for a basic sales-type lease with no residual value in Demo 17-6. A summary of th (pg. 17-35)
Demo 17-6 Lessor—Basic Sales-Type Lease (pg. 17-35)
Review 17-6 Accounting for a Basic Sales-Type Lease for a Lessor (pg. 17-39)
LO 17-7 Account for an operating lease for a lessor (pg. 17-39)
Demo 17-7 Lessor—Operating Lease with Initial Direct Cost (pg. 17-39)
Review 17-7 Operating Lease by Lessor with Initial Direct Costs (pg. 17-42)
LO 17-8 Account for complex sales-type leases for a lessor (pg. 17-42)
Net Investment in Lease (pg. 17-42)
Initial Direct Costs? (pg. 17-43)
Demo 17-8A Lessor—Sales-Type Lease with Initial Direct Costs (pg. 17-43)
Demo 17-8B Lessor—Sales-Type Lease with a Guaranteed Residual Value (pg. 17-43)
Unguaranteed Residual Value (pg. 17-46)
Demo 17-8C Lessor—Sales-Type Lease with an Unguaranteed Residual Value (pg. 17-46)
Review 17-8 Sales-Type Lease by Lessor with a Guaranteed Residual Value (pg. 17-48)
LO 17-9 Explain the accounting policy election for short-term leases and other lease disclosures (pg. 17-49)
Short-Term Leases (pg. 17-49)
Demo 17-9 Short-Term Leases (pg. 17-49)
Financial Statement Reporting of Leases (pg. 17-49)
Review 17-9 Accounting for a Short-Term Lease (pg. 17-51)
Management Judgment (pg. 17-51)
Identifying a Lease (pg. 17-51)
Classifying a Lease (pg. 17-52)
Accounting for a Lease (pg. 17-52)
APPENDIX 17A LO 17-10 Account for direct financing leases by the lessor (pg. 17-52)
Demo 17-10 Lessor—Direct Financing Lease (pg. 17-53)
Review 17-10 Accounting for Direct Financing Leases (pg. 17-55)
APPENDIX 17B LO 17-11 Explain lease modifications and lease remeasurements (pg. 17-56)
Lease Modifications (pg. 17-56)
Additional Cases of Lease Classification Reassessment and Lease Remeasurement (pg. 17-56)
Demo 17-11 Lease Modifications and Lease Remeasurements (pg. 17-57)
Review 17-11 Lease Modifications and Lease Remeasurements (pg. 17-58)
APPENDIX 17C LO 17-12 Describe the difference in accounting for a sale-leaseback versus a failed s (pg. 17-59)
Demo 17-12 Sale-Leaseback and Failed Sale (pg. 17-60)
Review 17-12 Accounting for Sale-Leaseback (pg. 17-62)
Questions (pg. 17-62)
Data Analytics (pg. 17-63)
Data Visualization (pg. 17-63)
Multiple Choice (pg. 17-63)
Brief Exercises (pg. 17-64)
Exercises (pg. 17-69)
Problems (pg. 17-80)
Accounting Decisions and Judgments (pg. 17-84)
Appendices—Multiple Choice (pg. 17-88)
Appendices—Brief Exercises (pg. 17-89)
Appendices—Exercises (pg. 17-89)
Answers to Review Exercises (pg. 17-91)
Appendices—Problem (pg. 17-91)
Chapter 18: Income Taxes (pg. 18-1)
LO 18-1 Differentiate among taxable temporary, deductible temporary, and permanent differences (pg. 18-3)
Why Is There a Difference between Pretax GAAP Income and Taxable Income? (pg. 18-3)
Demo 18-1A Differentiating Pretax GAAP Income from Taxable Income (pg. 18-3)
How Are Differences between GAAP Income and Taxable Income Classified? (pg. 18-4)
Temporary Differences (pg. 18-4)
Permanent Differences (pg. 18-5)
Demo 18-1B Comparing Pretax GAAP Income to Taxable Income (pg. 18-5)
Review 18-1 Classifying Differences as Temporary or Permanent (pg. 18-6)
LO 18-2 Recognize deferred tax liabilities attributable to taxable temporary differences (pg. 18-6)
Deferred Tax Liability (pg. 18-8)
Demo 18-2 Taxable Temporary Difference Leading to Deferred Tax Liability (pg. 18-8)
Review 18-2 Taxable Temporary Difference Leading to Deferred Tax Liability (pg. 18-9)
LO 18-3 Recognize deferred tax assets attributable to deductible temporary differences (pg. 18-10)
Deferred Tax Asset (pg. 18-11)
Demo 18-3 Deductible Temporary Differences Leading to a Deferred Tax Asset (pg. 18-11)
Review 18-3 Deductible Temporary Difference Leading to Deferred Tax Asset (pg. 18-12)
LO 18-4 Account for Multiple Tax Differences and Prepare a Tax Reconciliation Disclosure (pg. 18-13)
Permanent Differences (pg. 18-13)
Nontaxable Items (pg. 18-13)
Nondeductible Items (pg. 18-13)
Other Permanent Differences (pg. 18-13)
Demo 18-4A Multiple Book-Tax Differences (pg. 18-14)
Rate Reconciliation Disclosure (pg. 18-15)
Demo 18-4B Rate Reconciliation (pg. 18-16)
Review 18-4 Multiple Temporary and Permanent Differences (pg. 18-17)
LO 18-5 Explain how to record a valuation allowance and report deferred taxes (pg. 18-18)
Valuation Allowance (pg. 18-18)
Demo 18-5A Account for Deferred Tax Asset Valuation Allowance (pg. 18-19)
Balance Sheet Presentation of Deferred Tax Accounts (pg. 18-20)
Balance Sheet Classification of Deferred Tax Accounts (pg. 18-20)
Demo 18-5B Balance Sheet Classification of Deferred Tax Accounts (pg. 18-20)
Review 18-5 Tax Asset Valuation Allowance and Reporting of Deferred Tax Accounts (pg. 18-21)
LO 18-6 Explain how a change in tax rates impacts deferred taxes (pg. 18-21)
Demo 18-6 Change in Enacted Tax Rate (pg. 18-22)
Review 18-6 Change in Enacted Tax Rate (pg. 18-25)
LO 18-7 Describe accounting for net operating loss carryforwards and loss carryback|carryforwards (pg. 18-25)
Net Operating Loss Carryforwards (pg. 18-26)
Net Operating Loss Carryback|Carryforward (pg. 18-26)
Demo 18-7A Net Operating Loss Carryforward (pg. 18-26)
Review 18-7 Net Operating Loss Carryforward (pg. 18-28)
LO 18-8 Explain and demonstrate accounting for uncertainty in income tax decisions (pg. 18-29)
Demo 18-8 Uncertain Tax Positions (pg. 18-30)
Review 18-8 Uncertain Tax Positions (pg. 18-32)
Disclosure Requirements for Income Tax (pg. 18-32)
Management Judgment (pg. 18-33)
Deferred Tax Asset Valuation Allowance (pg. 18-33)
Uncertain Tax Position (pg. 18-34)
APPENDIX 18A LO 18-9 Apply intraperiod tax allocation (pg. 18-34)
Demo 18-9 Intraperiod Tax Allocation (pg. 18-34)
Review 18-9 Intraperiod Tax Allocation (pg. 18-35)
Questions (pg. 18-35)
Data Analytics (pg. 18-36)
Data Visualization (pg. 18-36)
Multiple Choice (pg. 18-36)
Brief Exercises (pg. 18-38)
Exercises (pg. 18-43)
Problems (pg. 18-55)
Accounting Decisions and Judgments (pg. 18-59)
Appendices—Brief Exercises (pg. 18-63)
Appendices—Exercises (pg. 18-63)
Appendices—Problems (pg. 18-64)
Answers to Review Exercises (pg. 18-64)
Chapter 19: Stockholders’ Equity (pg. 19-1)
LO 19-1 Describe and report key components of stockholders’ equity (pg. 19-3)
Key Components of Stockholders’ Equity (pg. 19-3)
Paid-In Capital (pg. 19-3)
Retained Earnings (pg. 19-5)
Accumulated Other Comprehensive Income (pg. 19-5)
Noncontrolling Interest (pg. 19-5)
Demo 19-1 Key Components of Stockholders’ Equity (pg. 19-6)
Review 19-1 Components of Stockholders’ Equity (pg. 19-6)
LO 19-2 Account for common stock issuance, including par and no-par, cash and noncash, and issue cos (pg. 19-8)
Par Value Common Stock (pg. 19-8)
Demo 19-2A Par Value Stock Issuance (pg. 19-8)
No-Par and Stated Value Common Stock (pg. 19-9)
Demo 19-2B No-Par Common Stock Issuance (pg. 19-9)
Common Stock Issued for Noncash Consideration (pg. 19-9)
Demo 19-2C Common Stock Issuance for Noncash Consideration (pg. 19-10)
Multiple Securities Issuance (pg. 19-10)
Demo 19-2D Multiple Securities Issuance (pg. 19-10)
Stock Issue Costs (pg. 19-11)
Demo 19-2E Common Stock Issue Costs (pg. 19-11)
Accounting for Common Stock Issuance (pg. 19-12)
Review 19-2 Accounting for Common Stock Issuance (pg. 19-12)
LO 19-3 Account for reacquisition of common stock (pg. 19-12)
Treasury Stock (pg. 19-12)
Demo 19-3A Reacquisition of Common Stock—Treasury Stock (pg. 19-13)
Direct Retirement of Stock (pg. 19-14)
Demo 19-3B Reacquisition of Common Stock—Direct Retirement (pg. 19-14)
Review 19-3 Reacquisition of Common Stock (pg. 19-15)
LO 19-4 Describe and account for preferred stock (pg. 19-15)
Initial Recognition of Preferred Stock (pg. 19-16)
Subsequent Recognition of Preferred Stock (pg. 19-16)
Demo 19-4 Accounting for Preferred Stock (pg. 19-17)
Review 19-4 Accounting for Preferred Stock (pg. 19-18)
LO 19-5 Record dividend distributions, including cash, property, and liquidating (pg. 19-18)
Cash Dividend (pg. 19-19)
Demo 19-5A Cash Dividend Distributions (pg. 19-19)
Property Dividend (pg. 19-21)
Demo 19-5B Property Dividend Distributions (pg. 19-21)
Liquidating Dividend (pg. 19-21)
Demo 19-5C Liquidating Dividend Distributions (pg. 19-22)
Review 19-5 Recording Dividend Distributions (pg. 19-22)
LO 19-6 Account for stock dividends and stock splits (pg. 19-23)
Stock Dividends (pg. 19-23)
Small Stock Dividends (pg. 19-24)
Demo 19-6A Accounting for Small Stock Dividends (pg. 19-24)
Stock Split Effected in the Form of a Dividend (Large Stock Dividend) (pg. 19-25)
Demo 19-6B Accounting for a Stock Split Effected in the Form of a Dividend (pg. 19-26)
Stock Splits (pg. 19-26)
Impact of Dividends and Stock Splits (pg. 19-26)
Demo 19-6C Accounting for Stock Splits (pg. 19-27)
Review 19-6 Account for Stock Dividends and Stock Splits (pg. 19-27)
LO 19-7 Describe the components of comprehensive income and prepare a statement of comprehensive inc (pg. 19-28)
Demo 19-7 Reporting of Comprehensive Income and Accumulated OCI (pg. 19-28)
Review 19-7 Comprehensive Income and Accumulated OCI (pg. 19-30)
LO 19-8 Explain stockholders’ equity disclosures and key ratios (pg. 19-30)
Equity Disclosures (pg. 19-30)
Equity Ratios (pg. 19-31)
Book Value per Share (pg. 19-31)
Payout Ratio (pg. 19-31)
Return on Equity (pg. 19-31)
Price-to-Earnings Ratio (pg. 19-31)
Demo 19-8 Equity Ratios (pg. 19-31)
Review 19-8 Computing Equity Ratios (pg. 19-32)
Management Judgment (pg. 19-33)
Questions (pg. 19-33)
Data Analytics (pg. 19-34)
Data Visualization (pg. 19-34)
Multiple Choice (pg. 19-34)
Brief Exercises (pg. 19-36)
Exercises (pg. 19-41)
Problems (pg. 19-49)
Accounting Decisions and Judgments (pg. 19-54)
Answers to Review Exercises (pg. 19-64)
Capter 20: Share-Based Compensation and Earnings per Share (pg. 20-1)
LO 20-1 Account for restricted stock plans (pg. 20-3)
Restricted Stock Awards (pg. 20-3)
Restricted Stock Units (pg. 20-4)
Forfeitures of Stock Awards or Stock Units (pg. 20-4)
Accounting for Restricted Stock Awards (pg. 20-4)
Demo 20-1A Accounting for Restricted Stock Awards (pg. 20-4)
Review 20-1 Accounting for Restricted Stock Plans (pg. 20-7)
LO 20-2 Account for stock options (pg. 20-8)
Demo 20-2 Accounting for Stock Options (pg. 20-10)
Review 20-2 Accounting for Stock Options (pg. 20-12)
LO 20-3 Account for employee stock purchase plans (pg. 20-12)
Demo 20-3 Accounting for Employee Share Purchase Plans (pg. 20-13)
Review 20-3 Accounting for Employee Stock Purchase Plans (pg. 20-14)
LO 20-4 Compute earnings per share (EPS) with a simple capital structure (pg. 20-14)
Demo 20-4 Earnings per Share Calculation—Simple Capital Structure (pg. 20-14)
Review 20-4 Calculation of Basic EPS (pg. 20-15)
LO 20-5 Compute EPS given share issuances, buybacks, dividends, ­and splits (pg. 20-15)
Preferred Stock Dividends (pg. 20-15)
Share Issuances and Buybacks (pg. 20-16)
Stock Dividends and Stock Splits (pg. 20-16)
Demo 20-5 EPS Calculations—Simple Capital Structure (pg. 20-16)
Review 20-5 Calculation of Basic EPS (pg. 20-19)
LO 20-6 Compute EPS using if-converted method for convertible securities (pg. 20-19)
Convertible Debt and Convertible Preferred Stock (pg. 20-19)
Convertible Debt (pg. 20-20)
Demo 20-6A EPS Calculations—Convertible Bonds (pg. 20-21)
Convertible Preferred Stock (pg. 20-22)
Demo 20-6B EPS Calculations—Convertible Preferred Stock (pg. 20-23)
Review 20-6 Calculation of EPS—Convertible Bonds and Convertible Preferred Stock (pg. 20-24)
LO 20-7 Compute EPS using treasury stock method for options, warrants, and restricted stock (pg. 20-24)
Stock Options and Warrants (pg. 20-24)
Demo 20-7A EPS Calculations—Stock Options (pg. 20-25)
Demo 20-7B EPS Calculations—Restricted Stock (pg. 20-27)
Review 20-7 EPS Calculations—Options and Restricted Stock (pg. 20-28)
LO 20-8 Compute EPS given contingently issuable shares (pg. 20-29)
Demo 20-8 Compute EPS Given Contingently Issuable Shares (pg. 20-29)
Review 20-8 Calculation of EPS Given Contingently Issuable Shares (pg. 20-30)
LO 20-9 Compute EPS given multiple securities and describe EPS financial statement presentation (pg. 20-30)
Demo 20-9 Compute EPS Given Multiple Securities (pg. 20-30)
Presentation and Disclosure of EPS (pg. 20-31)
Review 20-9 Calculation of EPS—Multiple Securities (pg. 20-33)
Management Judgment (pg. 20-33)
Share-Based Compensation (pg. 20-33)
EPS Calculations (pg. 20-34)
APPENDIX 20A LO 20-10 Describe accounting for stock appreciation rights (pg. 20-34)
Recording SARs as Equity (pg. 20-34)
Recording SARs as Liabilities (pg. 20-34)
Demo 20-10 Stock Appreciation Rights (pg. 20-35)
Review 20-10 Accounting for Stock Appreciation Rights (pg. 20-36)
Questions (pg. 20-37)
Data Analytics (pg. 20-38)
Data Visualization (pg. 20-38)
Multiple Choice (pg. 20-38)
Brief Exercises (pg. 20-39)
Exercises (pg. 20-43)
Problems (pg. 20-50)
Accounting Decisions and Judgments (pg. 20-54)
Appendix—Brief Exercises (pg. 20-60)
Appendix—Exercises (pg. 20-60)
Answers to Review Exercises (pg. 20-61)
Appendix—Problems (pg. 20-61)
Chapter 21: Accounting Changes and Error Analysis (pg. 21-1)
Expanded Chapter Overview (pg. 21-3)
LO 21-1 Demonstrate accounting for change in accounting estimate including a change in accounting es (pg. 21-4)
Change in Estimate (pg. 21-4)
Demo 21-1A Change in Accounting Estimate (pg. 21-4)
Disclosure Requirements (pg. 21-6)
Demo 21-1B Change in Accounting Estimate Effected by a Change in Accounting Principle (pg. 21-6)
Review 21-1 Change in Accounting Estimate (pg. 21-7)
LO 21-2 Demonstrate accounting for change in accounting principle (pg. 21-8)
Voluntary Change in Accounting Principle (pg. 21-8)
Retrospective Approach (pg. 21-9)
Demo 21-2A Change in Inventory Method—Retrospective Application (pg. 21-10)
Change in Accounting Principle-Prospective Approach (pg. 21-13)
Demo 21-2B Change in Inventory Method—Prospective Application (pg. 21-14)
Required Change in Accounting Principle Due to a Codification Update (pg. 21-14)
Review 21-2 Change in Inventory Method (pg. 21-16)
LO 21-3 Describe the accounting for a change in reporting entity (pg. 21-16)
Demo 21-3 Identification of a Change in Reporting Entity (pg. 21-17)
Review 21-3 Change in Reporting Entity (pg. 21-18)
LO 21-4 Demonstrate the accounting for an error correction (pg. 21-18)
Examples of Errors (pg. 21-18)
Determining Whether an Error is Material (pg. 21-19)
Correction of a Material Error Discovered in Subsequent Period (pg. 21-19)
Demo 21-4A Recording Prior Period Adjustments (pg. 21-21)
Inventory Errors (pg. 21-22)
Demo 21-4B Recording Correcting Entries for Inventory Errors (pg. 21-23)
Disclosure Requirements (pg. 21-24)
Review 21-4 Correcting Errors and Reporting Error Corrections (pg. 21-25)
LO 21-5 Apply tax effects to changes in accounting principle and error corrections (pg. 21-25)
Change in Accounting Principle (pg. 21-25)
Demo 21-5A Applying Tax Effects to Change in Accounting Principle (pg. 21-25)
Error Correction (pg. 21-26)
Demo 21-5B Applying Tax Effects to Error Correction (pg. 21-26)
Review 21-5 Change in Accounting Principle and Error Correction (pg. 21-27)
Management Judgment (pg. 21-27)
Questions (pg. 21-27)
Data Visualization and Data Analytics (pg. 21-28)
Multiple Choice (pg. 21-28)
Brief Exercises (pg. 21-29)
Exercises (pg. 21-33)
Problems (pg. 21-45)
Accounting Decisions and Judgments (pg. 21-50)
Answers to Review Exercises (pg. 21-53)
Chapter 22: Statement of Cash Flows Revisited (pg. 22-1)
LO 22-1 Identify operating, investing, and financing activities, and the statement of cash flows fo (pg. 22-3)
Cash Flows from Operating Activities (pg. 22-3)
Cash Flows from Investing Activities (pg. 22-4)
Cash Flows from Financing Activities (pg. 22-4)
Format of Statement of Cash Flows (pg. 22-5)
Identify Operating, Investing, and Financing Activities (pg. 22-6)
Demo 22-1 Identify Operating, Investing, and Financing Activities (pg. 22-6)
Review 22-1 Identify Operating, Investing, and Financing Activities (pg. 22-6)
LO 22-2 Prepare the operating activities cash flow section of the statement of cash flows using the (pg. 22-7)
Operating Activities Cash Flow Section—Indirect Method (pg. 22-7)
Noncash Revenue/Gain and Expense/Loss Adjustments (pg. 22-8)
Changes in Operating Assets (Other than Cash) and Operating Liabilities (pg. 22-8)
Demo 22-2 Net Cash Flows from Operating Activities (pg. 22-9)
Other Items Affecting Cash Flows from Operating Activities (pg. 22-12)
Noncash Expense Adjustment-Compensation Expense for Share-Based Compensation Plans (pg. 22-12)
Noncash Adjustment-Net Unrealized Gain or Loss-Income (pg. 22-12)
Net Unrealized Gain or Loss-OCI (pg. 22-12)
Noncash Revenue Adjustment under the Equity Method (pg. 22-13)
Noncash Income Tax Expense Adjustment Related to Changes in Deferred Tax Assets and Liabilities (pg. 22-13)
Review 22-2 Prepare the Operating Activities Section (pg. 22-14)
LO 22-3 Prepare the investing activities section of the statement of cash flows (pg. 22-15)
Demo 22-3 Net Cash Flows from Investing Activities (pg. 22-16)
Other Items Affecting Cash Flows from Investing Activities (pg. 22-16)
Review 22-3 Prepare the Investing Activities Section (pg. 22-17)
LO 22-4 Prepare the financing activities section of the statement of cash flows (pg. 22-17)
Demo 22-4 Net Cash Flows from Financing Activities (pg. 22-18)
Other Financing Activities (pg. 22-20)
Review 22-4 Prepare the Financing Activities Section (pg. 22-21)
LO 22-5 Describe required disclosures including that for noncash transactions (pg. 22-22)
Cash Flow Reporting (pg. 22-22)
Noncash Transactions (pg. 22-23)
Demo 22-5 Disclosure of Noncash Transactions (pg. 22-23)
Review 22-5 Disclosure of Noncash Transactions (pg. 22-24)
LO 22-6 Utilize a worksheet to prepare the statement of cash flows (pg. 22-25)
Demo 22-6 Cash Flow Worksheet (pg. 22-25)
Review 22-6 Preparing Cash Flow Worksheet Entries (pg. 22-28)
LO 22-7 Prepare the operating cash flow section of the statement of cash flows using the direct meth (pg. 22-28)
Demo 22-7 Cash Flows from Operating Activities under Direct Method (pg. 22-29)
Reconciliation of Net Income to Operating Cash Flows (pg. 22-32)
Bond Interest-Direct and Indirect Method Presentation (pg. 22-33)
Review 22-7 Cash Flows from Operating Activities Using the Direct Method (pg. 22-34)
Management Judgment (pg. 22-34)
Classification of Cash Flows (pg. 22-34)
Transactions Affecting Cash Flow Presentation (pg. 22-35)
APPENDIX 22A LO 22-8 Prepare a statement of cash flows using the cash T?account approach (pg. 22-35)
Demo 22-8 Cash T?Account Approach (pg. 22-36)
Review 22-8 Cash T?Account Approach (pg. 22-38)
Questions (pg. 22-38)
Data Analytics (pg. 22-39)
Data Visualization (pg. 22-39)
Multiple Choice (pg. 22-39)
Brief Exercises (pg. 22-41)
Exercises (pg. 22-43)
Problems (pg. 22-55)
Accounting Decisions and Judgments (pg. 22-65)
Appendix—Exercise (pg. 22-70)
Appendix—Problem (pg. 22-70)
Answers to Review Exercises (pg. 22-70)
Chapter 23: Pensions and Postretirement Benefits (pg. 23-1)
Expanded Chapter Preview (pg. 23-3)
LO 23-1 Describe defined benefit plans and the measurement of related pension obligations (pg. 23-4)
Defined Benefit Plan Vs. Defined Contribution Plan (pg. 23-4)
Measuring the Liability for Pension Benefits (pg. 23-5)
Demo 23-1 Estimating Pension Obligations (pg. 23-6)
Review 23-1 Obligations under Defined Benefit Pension Plans (pg. 23-7)
LO 23-2 Determine the five components of change in projected benefit obligation (pg. 23-7)
Component Changes in the Projected Benefit Obligation (pg. 23-7)
Service Cost (pg. 23-8)
Interest Cost (pg. 23-8)
Prior Service Cost Adjustment (pg. 23-8)
Actuarial Gain/Loss on PBO (pg. 23-8)
Benefit Payments (pg. 23-8)
Demo 23-2 Recognizing Changes in the Projected Benefit Obligation (pg. 23-9)
Review 23-2 Determine Changes in the Components of PBO (pg. 23-9)
LO 23-3 Reconcile pension plan assets and determine funded status (pg. 23-10)
Reconciliation of Plan Assets (pg. 23-10)
Actual Return on Plan Assets (pg. 23-10)
Employer Contributions (pg. 23-10)
Benefit Payments (pg. 23-10)
Demo 23-3A Reconcile Pension Plan Assets (pg. 23-10)
Financial Statement Reporting of Funded Status (pg. 23-11)
Demo 23-3B Determination of Funded Status (pg. 23-11)
Review 23-3 Reconciliation of Plan Assets and Determination of Funded Status (pg. 23-13)
LO 23-4 Determine the five components of pension expense (pg. 23-13)
Service Cost (pg. 23-13)
Interest Cost (pg. 23-13)
Expected Return on Plan Assets (pg. 23-14)
Amortization of Prior Service Cost (pg. 23-14)
Amortization of Pension Gain/Loss (pg. 23-14)
Demo 23-4 Components of Pension Expense (pg. 23-16)
Review 23-4 Components of Pension Expense (pg. 23-17)
LO 23-5 Record prior service cost amendment, pension expense, gains and losses, funding, and benefit (pg. 23-18)
Recording Prior Service Cost Amendment (pg. 23-18)
Recording Pension Expense (pg. 23-18)
Recording Deferral of Pension Gains and Losses (pg. 23-18)
Recording Employer Contributions (pg. 23-18)
Recording Benefits Paid (pg. 23-18)
Demo 23-5 Recording the Impact of Defined Benefit Plan (pg. 23-19)
Review 23-5 Recording the Impact of a Defined Benefit Plan (pg. 23-21)
LO 23-6 Describe the reporting of pensions in financial statements (pg. 23-21)
Income Statement (pg. 23-21)
Statement of Comprehensive Income and Statement of Stockholders’ Equity (pg. 23-21)
Balance Sheet (pg. 23-22)
Demo 23-6 Pension Plan Reporting (pg. 23-22)
Disclosure Requirements (pg. 23-23)
Review 23-6 Reporting a Defined Benefit Pension Plan (pg. 23-24)
LO 23-7 Use a pension worksheet to record pension journal entries (pg. 23-24)
Demo 23-7 Preparation of a Pension Worksheet (pg. 23-24)
Review 23-7 Record Pension Entries Using a Pension Worksheet (pg. 23-25)
Management Judgment (pg. 23-26)
APPENDIX 23A LO 23-8 Explain postretirement benefit plans and differences from pensions plans (pg. 23-27)
Disclosure (pg. 23-28)
Demo 23-8 Determining Obligations for Postretirement Benefit Plan (pg. 23-28)
Review 23-8 Determining Obligations for Postretirement Benefit Plan (pg. 23-29)
APPENDIX 23B LO 23-9 Record postretirement benefit expense, gains and losses, funding, and benefit (pg. 23-30)
Demo 23-9 Recording Entries for Postretirement Benefit Plan (pg. 23-30)
Review 23-9 Recording Entries for Postretirement Benefit Plan (pg. 23-32)
APPENDIX 23C LO 23-10 Allocate prior service cost using the service method (pg. 23-33)
Demo 23-10 Allocation of Prior Service Cost (pg. 23-33)
Review 23-10 Allocation of Prior Service Costs (pg. 23-34)
Questions (pg. 23-34)
Data Analytics (pg. 23-34)
Data Visualization (pg. 23-35)
Multiple Choice (pg. 23-35)
Brief Exercises (pg. 23-36)
Exercises (pg. 23-39)
Problems (pg. 23-47)
Accounting Decisions and Judgments (pg. 23-52)
Appendices—Brief Exercises (pg. 23-58)
Appendices—Exercises (pg. 23-59)
Appendices—Problems (pg. 23-61)
Answers to Review Exercises (pg. 23-62)
Appendix A: Data Analytics and Visualizations (pg. A-1)
LO A-1 Define Big Data and describe its four attributes. (pg. A-2)
Big Data (pg. A-2)
LO A-2 Identify and define the four types of data analytics. (pg. A-2)
LO A-3 Describe the use of data analytics for financial statement analysis. (pg. A-3)
LO A-4 Describe the analytics mindset.1 (pg. A-4)
Data Analytic Tools (pg. A-5)
LO A-5 Describe data visualization best practices. (pg. A-6)
LO A-6 Blockchain Technology (pg. A-10)
Video Resources For Tableau and Excel (pg. A-12)
Data Visualization and Data Analytics (pg. A-12)
Appendix B: IFRS (pg. B-1)
IFRS LO 1-7: Compare international accounting standards and standard setters to the U.S. accounting (pg. B-4)
Setting International Standards (pg. B-4)
Impact of International Standards (pg. B-4)
Aims of International Standards (pg. B-4)
Sources and Development of International Standards (pg. B-4)
Demo 1-7A: Comparing U.S. Standard Setters vs. International Standard Setters (pg. B-5)
IASB Conceptual Framework (pg. B-5)
Future Convergence of U.S. GAAP and IFRS? (pg. B-6)
Motivation to Understand IFRS (pg. B-6)
Demo 1-7B: U.S. GAAP vs. IFRS (pg. B-6)
Review 1-7: Accounting Standards and Accounting Standard Setters (pg. B-7)
IFRS LO 2-11: Describe the process of initial adoption of IFRS (pg. B-7)
Requirements in Adopting IFRS (pg. B-7)
Demo 2-11: Initial Adoption of IFRS (pg. B-8)
Review 2-11: Determinants of U.S. GAAP (pg. B-8)
IFRS LO 3-9: Compare the income statement and the statement of comprehensive income presentation be (pg. B-8)
Income Statement (pg. B-8)
Statement of Comprehensive Income (pg. B-9)
Demo 3-9: Income Statement and the Statement of Comprehensive Income under U.S. GAAP vs. IFRS (pg. B-10)
Review 3-9: U.S. GAAP vs. IFRS in Income Statement and Comprehensive Income Reporting (pg. B-10)
IFRS LO 4-6: Compare balance sheet presentations between U.S. GAAP and IFRS (pg. B-11)
Demo 4-6: Balance Sheet Presentation under U.S. GAAP vs. IFRS (pg. B-12)
Review 4-6: GAAP vs. IFRS Balance Sheet Reporting (pg. B-12)
IFRS LO 5-9: Compare the statement of cash flow presentation between U.S. GAAP and IFRS (pg. B-12)
Demo 5-9: IFRS—Statement of Cash Flows (pg. B-13)
Review 5-9: Statement of Cash Flows—IFRS (pg. B-13)
IFRS LO 7-12: Describe differences in accounting for revenue between U.S. GAAP and IFRS (pg. B-14)
Collectibility Threshold of a Valid Contract (pg. B-14)
Licenses (pg. B-14)
Shipping and Handling (pg. B-14)
Performance Obligations-Immaterial Goods and Services (pg. B-14)
Noncash Consideration (pg. B-14)
Onerous Contracts (pg. B-14)
Reversal of Impairment Losses on Contract Costs (pg. B-15)
Sales Tax Presentation (pg. B-15)
Disclosure of Remaining Performance Obligation (pg. B-15)
Demo 7-12: Compare Revenue Recognition between U.S. GAAP and IFRS (pg. B-15)
Review 7-12: Compare Revenue Recognition between U.S. GAAP and IFRS (pg. B-15)
IFRS LO 8-10: Describe differences in accounting for cash and receivables between U.S. GAAP and IFR (pg. B-16)
Bank Overdrafts (pg. B-16)
Estimate of Credit Losses on Receivables (pg. B-16)
Classification of Receivables (pg. B-16)
Transfer of Receivables (pg. B-16)
Fair Value Option (pg. B-16)
Demo 8-10: Cash and Receivables under U.S. GAAP vs. IFRS (pg. B-16)
Review 8-10: U.S. GAAP vs. IFRS in Reporting Cash and Receivables (pg. B-17)
IFRS LO 10-10: Compare accounting for inventory between U.S. GAAP and IFRS (pg. B-17)
Inventory Methods (pg. B-17)
Lower-of-Cost-or-Net Realizable Value (pg. B-17)
Reversals of Inventory Write-Downs (pg. B-17)
Demo 10-10: Inventories under U.S. GAAP vs. IFRS (pg. B-17)
Review 10-10: U.S. GAAP vs. IFRS in Reporting Inventorie (pg. B-18)
IFRS LO 11-10: Compare accounting for property, plant, and equipment between U.S. GAAP and IFRS (pg. B-18)
Property, Plant, and Equipment (pg. B-18)
Interest Capitalization (pg. B-18)
Donation by Government Grant (pg. B-18)
Major Replacements of Fixed Assets (pg. B-18)
Biological Assets (pg. B-18)
Demo 11-10: Property, Plant, and Equipment under U.S. GAAP vs. IFRS (pg. B-19)
Review 11-10: U.S. GAAP vs. IFRS in Reporting Property, Plant, and Equipment (pg. B-19)
IFRS LO 12-12: Compare accounting for depreciation and impairment of property, plant, and equipment (pg. B-19)
Depreciation by Component (pg. B-19)
Depreciation Estimates (pg. B-20)
Analyzing Impairment on Fixed Assets Held for Use (pg. B-20)
Reversal of Impairment Losses on Fixed Assets Held for Use (pg. B-20)
Demo 12-12: Depreciation and Impairment under U.S. GAAP vs. IFRS (pg. B-20)
Review 12-12: U.S. GAAP vs. IFRS in Reporting Property, Plant, and Equipment (pg. B-20)
IFRS LO 13-7: Compare accounting for intangible assets between U.S. GAAP and IFRS (pg. B-21)
Accounting for Research and Development Costs (pg. B-21)
Revaluation of Finite Life Intangible Assets (pg. B-21)
Impairment of Finite Life Intangible Asset (pg. B-21)
Impairment of Goodwill and Other Indefinite Life Intangible Assets (pg. B-21)
Reversal of Impairment Losses (pg. B-21)
Subsequent Litigation Costs (pg. B-21)
Demo 13-7: Accounting for Intangible Assets under U.S. GAAP vs. IFRS (pg. B-22)
Review 13-7: U.S. GAAP vs. IFRS in Reporting Intangibles (pg. B-22)
IFRS LO 14-10: Compare accounting for investment assets between U.S. GAAP and IFRS (pg. B-23)
Accounting for Classifications of Debt Investments (pg. B-23)
Transfer among Debt Investment Categories (pg. B-23)
Fair Value Option (pg. B-23)
Impairment (pg. B-23)
Accounting for Classifications of Equity Investments (pg. B-23)
Transfer of Equity Securities (pg. B-24)
Equity Method (pg. B-24)
Demo 14-10: Accounting for Investments under U.S. GAAP vs. IFRS (pg. B-24)
Review 14-10: U.S. GAAP vs. IFRS in Reporting Investments (pg. B-24)
IFRS LO 15-7: Describe differences in accounting for current liabilities and contingencies between U (pg. B-25)
Contingency Terminology (pg. B-25)
Measurement of a Contingency (pg. B-25)
Present Value of Provisions (pg. B-25)
Gain Contingencies (pg. B-25)
Compensated Absences (pg. B-25)
Refinancing of Debt (pg. B-25)
Demo 15-7: Contingencies and Current Liabilities under U.S. GAAP vs. IFRS (pg. B-26)
Review 15-7: U.S. GAAP vs. IFRS in Reporting Contingencies and Current Liabilities (pg. B-26)
IFRS LO 16-13: Describe differences in accounting for noncurrent liabilities between U.S. GAAP and I (pg. B-26)
Net Method (pg. B-26)
Amortization of Discounts and Premiums (pg. B-26)
Debt Covenant Violations and Refinancing (pg. B-26)
Extinguishment of Debt (pg. B-27)
Convertible Debt (pg. B-27)
Demo 16-13: Noncurrent Liabilities under U.S. GAAP vs. IFRS (pg. B-27)
Review 16-13: U.S. GAAP vs. IFRS in Reporting Noncurrent Liabilities (pg. B-27)
IFRS LO 17-10: Compare accounting for leases between U.S. GAAP and IFRS (pg. B-27)
Lessee Lease Classification (pg. B-27)
Exceptions for Accounting under Lease Standards (pg. B-27)
Direct Financing Leases (pg. B-28)
Remeasurement (pg. B-28)
Sale-Leaseback (pg. B-28)
Demo 17-10: Accounting for Leases under U.S. GAAP vs. IFRS (pg. B-28)
Review 17-10: U.S. GAAP vs. IFRS in Reporting Leases (pg. B-28)
IFRS LO 18-11: Compare accounting for income taxes between U.S. GAAP and IFRS (pg. B-29)
Deferred Tax Asset Valuation Allowance (pg. B-29)
Exclusions for the Recognition of Deferred Tax Assets and Liabilities (pg. B-29)
Uncertain Tax Positions (pg. B-29)
Enacted Tax Rates (pg. B-29)
Demo 18-11: Accounting for Income Taxes under U.S. GAAP vs. IFRS (pg. B-29)
Review 18-11: U.S. GAAP vs. IFRS in Reporting Income Taxes (pg. B-30)
IFRS LO 19-11: Compare accounting for pensions between U.S. GAAP and IFRS (pg. B-30)
Calculation of Interest Expense and Expected Return (pg. B-30)
Gains and Losses in Accumulated Other Comprehensive Income (pg. B-30)
Prior Service Cost (pg. B-30)
Reporting of Pension Expense (pg. B-30)
Ceiling on Plan Assets (pg. B-30)
Demo 19-11: Accounting for Pensions under U.S. GAAP vs. IFRS (pg. B-31)
Review 19-11: Determine Pension Costs under IFRS (pg. B-31)
IFRS LO 20-9: Compare accounting for stockholders’ equity between U.S. GAAP and IFRS (pg. B-31)
Stockholders’ Equity Terminology (pg. B-31)
Treatment of Preferred Stock (pg. B-32)
Hybrid Securities (pg. B-32)
Demo 20-9: Accounting for Stockholders’ Equity under U.S. GAAP vs. IFRS (pg. B-32)
Review 20-9: Determine Preferred Stock Classification under IFRS (pg. B-32)
IFRS LO 21-11: Compare accounting for share-based compensation and earnings per share between U.S. G (pg. B-32)
Forfeitures of Employee Share-Based Awards (pg. B-32)
Earnings per Share (pg. B-33)
Stock Options with Graded Vesting (pg. B-33)
Demo 21-11: Accounting for Share-Based Compensation and EPS under U.S. GAAP vs. IFRS (pg. B-33)
Review 21-11: Share-Based Compensation and EPS under IFRS (pg. B-33)
IFRS LO 22-9: Compare presentations of the statement of cash flows between U.S. GAAP and IFRS (pg. B-33)
Classification of Cash Flow Items (pg. B-33)
Starting Point of Indirect Method-Cash Flows from Operating Activities (pg. B-34)
Bank Overdrafts (pg. B-34)
Investment Classification (pg. B-34)
Presentation of Noncash Investing and Financing Activities (pg. B-34)
Disclosure in the Statement of Cash Flows (pg. B-34)
Presentation of Restricted Cash (pg. B-34)
Demo 22-9: Presenting Cash Flows under U.S. GAAP vs. IFRS (pg. B-34)
Review 22-9: Presenting Cash Flows under U.S. GAAP vs. IFRS (pg. B-34)
IFRS-Questions (pg. B-35)
IFRS-Brief Exercises (pg. B-35)
IFRS-Exercises (pg. B-41)
Answers to Review Exercises (pg. B-53)
Index (pg. I-1)
Michelle L. Hanlon

Michelle L. Hanlon

Michelle L. Hanlon is the Howard W. Johnson Professor at the MIT Sloan School of Management. She earned her doctorate at the University of Washington.

Prior to joining MIT, she was a faculty member at the University of Michigan. Professor Hanlon has taught financial accounting to undergraduates, MBA students, executive MBA students, and Masters of Finance students. Professor Hanlon also teaches Taxes and Business Strategy to MBA students. She is the winner of the 2013 Jamieson Prize for Excellence in Teaching at MIT Sloan.

Professor Hanlon’s research focuses primarily on the intersection of taxation and financial accounting. Her recent work examines the capital market effects of the accounting for income tax, the reputational effects of corporate tax avoidance, and the economic consequences of U.S. international tax policies for multinational corporations. She has published research studies in the Journal of Accounting and Economics, the Journal of Accounting Research, The Accounting Review, the Review of Accounting Studies, the Journal of Finance, the Journal of Financial Economics, the Journal of Public Economics, and others. She has won several awards for her research and has presented her work at numerous universities and conferences. Professor Hanlon has served on several editorial boards and currently serves as an editor at the Journal of Accounting and Economics. 

Professor Hanlon has testified in front of the U.S. Senate Committee on Finance and the U.S. House of Representatives Committee on Ways and Means about the interaction of financial accounting and tax policy. She served as a U.S. delegate to the American-Swiss Young Leaders Conference in 2010 and worked as an Academic Fellow at the U.S. House Ways and Means Committee in 2015.

Leslie Hodder

Leslie Hodder

Professor and the Dean’s Faculty Fellow at Indiana University’s Kelley School of Business

Professor Hodder received her B.B.A and M.B.A./M.Acc from the University of New Mexico and her Ph.D. from the University of Texas at Austin. Prior to obtaining her Ph.D., Professor Hodder was Chief Financial Officer of a publicly traded commercial bank holding company in southern California. Professor Hodder was on faculty at Stanford University before joining the Indiana University faculty in 2003. Her research has appeared in top accounting journals, including The Accounting Review, Review of Accounting Studies, Contemporary Accounting Research, and Accounting Organizations and Society. She is the past winner of the American Accounting Association’s Wildman Award, is a past and present Editor at The Accounting Review, and is currently on the Executive Board of the American Accounting Association. Professor Hodder teaches financial-accounting-related topics in the undergraduate, master, and doctoral programs. Over her teaching career, she has developed or co-developed six courses in financial accounting, including Intermediate Financial Accounting I and II, Applied Audit and Accounting Research, and Detecting Earnings Management with a focus on data analytics. Professor Hodder currently teaches intermediate accounting to undergraduates.

Karen K. Nelson

Karen K. Nelson

M.J. Neeley Professor of Accounting at TCU. Former Harmon Whittington Professor of Accounting and past Accounting Area Coordinator at the Jones Graduate School of Business at Rice University.

Karen previously served on the faculty at Rice University, the Stanford University Graduate School of Business, and as a visiting professor at the University of Michigan. She earned her Ph.D. at the University of Michigan and a bachelor’s degree (summa cum laude) from the University of Colorado. She also holds a CPA license from the state of Colorado. Professor Nelson’s research focuses on financial reporting and disclosure issues, including the role of regulators, auditors, and private securities litigation in monitoring financial reporting quality. She has held research seminars at over 50 leading business schools in the U.S. and abroad, and published in a variety of leading academic journals including The Accounting Review, Journal of Accounting and Economics, Journal of Accounting, and Review of Accounting Studies. Her research has been featured in the financial press in publications such as The Wall Street Journal, Business Week, and Forbes. She is an active member of the American Accounting Association and serves on the Editorial Board of The Accounting Review. She has taught financial accounting at all levels, and her students have honored her with numerous awards for teaching excellence. She currently teaches intermediate accounting to undergraduates and financial accounting to MBAs. She is a member of the Standing Advisory Group of the Public Company Accounting Oversight Board.
Darren Roulstone

Darren Roulstone

Distinguished Professor of Accounting at the Ohio State University’s Fisher College of Business.

Professor Roulstone earned his doctorate at the University of Michigan’s Ross School of Business and BS and MAcc degrees from Brigham Young University’s Marriott School of Management. Professor Roulstone currently directs the Ph.D. program in Accounting and Management Information Systems at Fisher. He teaches a seminar on capital markets research and the core course in financial reporting in Fisher’s Master of Accounting program. He has extensive experience teaching intermediate accounting at both the undergraduate and graduate levels. Prior to joining Fisher, he was on the faculty at the University of Chicago’s Booth School of Business where he taught financial accounting and financial statement analysis in the full-time, evening, and weekend MBA programs. Professor Roulstone’s research focuses on information intermediaries, information acquisition by investors, and textual analysis of corporate disclosure. He serves on the editorial boards of several accounting journals and is currently an associate editor at Management Science. His research has been published in a variety of leading academic journals including The Accounting Review, Journal of Accounting and Economics, Journal of Accounting Research, Management Science, and Review of Accounting Studies. He is a past president of the American Accounting Association’s Financial Accounting and Reporting Section.

Amie L. Dragoo

Amie L. Dragoo

Professor of Accounting and Educational Consultant

Former Accounting Department Chair at Edgewood College, Professor Dragoo earned her BA and MBA from Michigan State University, and her doctorate from Edgewood College. She holds a CPA license, and for nearly 15 years has been a Becker Professional Education faculty instructor. Prior to her experiences in higher education, Professor Dragoo was a senior business assurance associate with PricewaterhouseCoopers LLP (formerly Coopers & Lybrand L.L.P.). Professor Dragoo has extensive teaching experiences, including courses in Intermediate Accounting I and II, Cost Accounting, Advanced Cost Management, Strategic Financial Management, and other advanced courses in financial and managerial accounting. She has received a number of teaching awards including the School of Business Outstanding Faculty Award and the Estervig-Beaubien Excellence in Teaching and Mentoring Award. She has also worked as an independent consultant, including projects in higher education, and has worked with several corporate clients. Professor Dragoo’s research has been published in the Journal of Education for Business and the Journal of Continuing Higher Education and she has contributed to numerous articles published by organizations affiliated with the AICPA. She has been involved in many community-oriented programs including the Volunteer Income Tax Assistance (VITA) program.

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