Includes index.

Decision Making and Information -- The Decision-Making Process -- A Familiar Decision -- Steps to a Decision -- Decisions in a Market Economy -- Capital Markets -- Professional Management -- Organizations in the U.S. Economy -- The Role of Information in Decision Making -- The Nature of Accounting Information -- Decision Oriented -- Quantitative and Financial Nature -- Accounting Entity -- Information and the Accounting Process -- Identification -- Measurement -- Classification and Accumulation -- Summarization -- Communication -- Obtaining Accounting Information -- Accounting in a Decision-Making Environment -- The Basic Financial Statements -- Income Statement -- Statement of Financial Position -- Statement of Cash Flows -- Statement of Changes in Owners' Equity -- Relationship Among the Financial Statements -- Users of Accounting Information -- Internal Users -- External Users -- Accounting Information Systems and Decision Making -- Internal and External Accounting Reports -- Internal Control -- Accountants: The Providers of Financial Information -- Accounting Regulation -- Regulation and Certification of Accountants -- The Role of Auditors -- Setting Standards for Accounting Information -- The Standard Setting Organizations -- Practical Aspects of Standard Setting -- The Current Environment of Accounting -- Income Taxation -- International Accounting -- Litigation -- Ethical Considerations -- Accounting for Societal Issues -- Understanding Cash Flows -- Understanding Cash Flows -- Estimation of Cash Flows -- Forecasts of Cash Inflows -- Forecasts of Cash Outflows -- Importance of Distinguishing Types of Cash Flows -- Evaluating Cash Management -- The Cash Cycle -- Efficient Employment of Cash -- Use of Credit -- Internal Control -- The Cash Flow Statement -- Cash Flows and Performance Evaluation -- Decisions and the Timing of Cash Flows -- The Time-Value Rate -- Determining Future Values -- The Role of Compounding -- Determining Present Values -- Multiple Payments -- Using Present and Future Values -- Decisions and Time Value of Money -- Reconciliation of Bank Accounts -- Accrual Accounting and Financial Reporting -- Evaluating Financial Accounting Information -- Objectives of Financial Reporting -- Qualities of Accounting Information -- Constraints on Accounting Information -- The Financial Accounting Information Model -- Financial Records -- Financial Statements -- Basic Concepts of Financial Accounting -- The Accounting Entity -- Objectivity -- The Going Concern -- Periodicity -- Disclosure -- Conservatism -- Recognition and Measurement -- Matching Costs and Benefits: The Heart of Accrual Accounting -- The Matching Concept -- Classifying Costs -- A Closer Look at Financial Statements -- Balance Sheet -- Income Statement -- Understanding Income -- The Nature of Income -- The Income Statement -- Operating and Nonoperating Income -- The Importance of Income -- A Measure of Contribution to Society -- A Basis for Forecasting Cash Flows -- The Connection Between the Past and the Future -- Income Statement Users -- Components of Income -- Revenues -- Expenses -- Gains and Losses -- Nonoperating Income and Expenses -- Measurement of Income -- Income Recognition on the Cash Basis -- Cash-Basis Revenue Recognition -- Cash-Basis Expense Recognition -- Income Recognition Using the Accrual Method -- The Matching Process -- Accrual-Basis Revenue Recognition -- Accrual-Basis Expense Recognition -- Recognition of Gains and Losses -- Summary of Accrual-Basis Recognition Rules -- Relationship Between Income and Cash Flows -- Usefulness of Alternative Income Figures -- Cash Flows or Accrual-Basis Income? -- Reporting Income Statement Elements -- Revenues -- Operating Expenses -- Operating Income -- Gains, Losses, and Nonoperating Items -- Income Tax Expense -- Net Income -- Earnings Per Share -- Additional Elements of the Income Statement -- Additional Disclosures -- Reporting Comprehensive Income -- Understanding Financial Position -- Understanding Balance Sheets -- Fiscal Year -- Balance Sheet Form and Classification -- Assets -- Assets and Decision Making -- How Assets Are Classified -- Current Assets -- Investments -- Property, Plant, and Equipment -- Intangible Assets -- Liabilities -- Liabilities and Decision Making -- How Liabilities Are Classified -- Current Liabilities -- Long-Term Liabilities -- Strength of Creditor Claims -- Owners' Equity -- Contributed Capital -- Retained Earnings -- The Valuation of Balance Sheet Elements -- Historical Cost -- Allocated Historical Cost -- Fair Value -- Net Realizable Value -- Present Value -- Balance Sheet Analysis -- Indicators of Liquidity -- Other Indicators -- The Accounting Process -- Accounting Systems -- The Accounting Equation: The Basis for Useful Information -- Using Ledger Accounts for Accumulation and Analysis -- How Ledger Accounts Work -- T-Accounts and the Accounting Equation -- Debits and Credits -- Double-Entry Bookkeeping: One Aspect of Reliability -- Using Ledger Accounts to Classify Information -- Two Types of Accounts: An Important Distinction -- The Accounting Equation Expanded -- Overview of the Accounting Cycle -- Adjustments: The Matching Concept at Work -- Accrued Income -- Accrued Expenses -- Unearned Income -- Prepaid Expenses -- Depreciation of Assets -- A Final Word About Adjustments -- Comprehensive Illustration of the Accounting Cycle -- Classification and Original Entries -- End-of-Period Adjustments -- Accumulation and Summarization -- Preparation of Financial Statements -- Cash, Receivables, and Investments -- Cash, Receivables, and Investments: Characteristics and Valuation -- Reporting Cash -- Restricted Cash -- Foreign Currency Deposits -- Reporting Accounts Receivable -- The Costs of Extending Credit -- Recognition and Valuation of Accounts Receivable -- Accounting for Uncollectible Accounts -- Summarizing Uncollectible Accounts -- Timing of Cash Collections from Accounts Receivable -- Financing through Receivables -- Notes and Other Receivables -- Interest-Bearing Notes -- Noninterest-Bearing Notes -- Other Receivables -- Investments -- Investments in Securities -- Investments Other Than Securities -- Impairment of Value -- Cash-Flow Implications -- Prepaid Expenses and Inventories -- Nonfinancial Assets and Their Valuation -- Reporting Nonfinancial Assets: The Matching Concept Applied -- Determining Cost -- Matching Costs and Benefits -- Repaid Expenses and Supplies -- Inventories -- Inventory Evaluation Measures -- Valuation of Inventories -- Assigning Costs to Inventory -- Accounting For Inventory Transactions -- Manufacturing Inventories -- Operating Assets and Intangibles -- Understanding Operating Assets -- Accounting and Reporting for Operating Assets -- Determining Cost -- Matching the Cost of Operating Assets -- Allocating the Cost of Operating Assets -- Straight-Line Depreciation -- Declining-Balance Depreciation -- Activity-Based Depreciation -- Evaluating Depreciation Methods -- Depreciation and Income Taxes -- Depreciation of Manufacturing Assets -- Depletion: Matching the Costs of Natural Resources -- Disposals and Impairments of Operating Assets -- Intangible Assets -- Intangible Assets That Confer Rights -- Research and Development Costs -- Goodwill -- Nonfinancial Asset Disclosures -- Financing Asset Acquisitions -- Borrowing to Purchase Assets -- Leasing Assets -- A Closer Look at Financing Asset Acquisitions -- Reporting Liabilities -- Understanding Liabilities -- Types and Classification of Liabilities -- Liabilities and Decisions -- Valuation of Liabilities -- Liabilities Arising from Day-to-Day Operations -- Analyzing Operating Liabilities -- Valuing Operating Liabilities -- Accounting for Operating Liabilities -- Estimated Liabilities -- Liabilities Related to Long-Term Financing -- The Use of Leverage -- Long-Term Debt and Interest Rates -- Frequency of Interest Payments -- Retirement of Debt -- Accounting for Long-Term Debt -- Current Maturities of Long-Term Debt -- Convertible Bonds -- Additional Disclosures -- Special Liabilities and Obligations -- Contingent Liabilities -- Other Liabilities -- Off-Balance-Sheet Obligations and Commitments -- Analyzing Liabilities -- Interest Expense and the Effective-Interest Method -- Reporting Ownership Interests -- Understanding Owners' Equity -- Stockholders' Equity: The Elements of Corporate Ownership -- Capital Stock -- Additional Paid-In Capital -- Retained Earnings -- Other Stockholders' Equity Elements -- Accounting for Capital Stock -- Issuance of Stock -- Retirement of Stock -- Treasury Stock Transactions -- Other Contributed Capital -- Accounting for Dividends -- Cash Dividends -- Stock Dividends and Splits -- Accounting for Stockholders' Equity Illustrated -- The Statement of Stockholders' Equity -- Analyzing Stockholders' Equity -- Margin of Safety -- Profitability -- Owners' Equity for Unincorporated Businesses -- The Cash Flow Statement and Decisions -- Understanding the Statement of Cash Flows -- Organization of the Statement of Cash Flows -- Tying Together Activities and Financial Statements -- Operating Cash Flows -- Depreciation and Amortization -- Changes in Deferred Income Taxes -- Amortization of Debt Discount and Premium -- Gains and Losses -- Changes in Current Assets and Liabilities -- Assessing Cash Flows From Operations -- Investing Cash Flows -- Financing Cash Flows -- Changes in Debt and Capital Stock -- Payment of Cash Dividends -- Reporting Changes in Financial Position -- Identifying Cash Effects -- Supplemental Cash Flow Information -- Alternative Reporting Approaches -- Evaluating Cash Flow Information -- Cash Flow Measures Related to Return -- Cash Flow Measures Related to Safety -- Special Income Reporting Considerations -- Recognizing Income: A Key to Decision making -- Special Income Recognition Issues -- Long-Term Contracts -- Precious Metals and Commodities -- Special Sales Considerations -- Transfer of Title --

Financing Arrangements -- Sales With the Right of Return -- Inventory on Consignment -- Special Income Events -- Discontinued Operations -- Extraordinary Gains and Losses -- Unusual Gains and Losses -- Accounting Changes -- Prior Period Adjustments -- Earnings Per Share -- Basic Earnings Per Share -- Diluted Earnings Per Share -- Using Financial Statement Information -- The Securities and Exchange Commission -- The SEC and Decisions -- Authority and Impact of the SEC -- SEC Filing and Reporting Requirements -- Management's Discussion and Analysis -- Level of Financial Statement Disclosure -- Consolidated Financial Statements -- Segment Disclosures -- Interim Financial Reporting -- Notes and Other Financial Statement Information -- Summary of Significant Accounting Policies -- Other Supplemental Information -- Financial Analysis -- Horizontal and Vertical Analysis -- Ratio Analysis -- Comparative Financial Statements and Ratios -- Personal Financial Reporting -- Financial Reporting in a Global Economy -- Decision Making in a Global Economy -- The Impact of Global Factors -- Financial Reporting for Global Businesses -- Reporting Transactions Denominated in Foreign Currencies -- Foreign Exchange Markets -- Foreign Transactions -- Payment in a Foreign Currency -- Reducing Foreign Exchange Risk -- Financial Statement Translation -- International Accounting Standards -- Analysis of Global Businesses -- Gateway Consolidated Financial Statements -- Present Value and Future Value Tables.

This fully revised edition teaches readers how to understand and use accounting information in their business decisions. Taking a user-oriented approach, the text spotlights the link between accounting information and decisions and helps readers gain an appreciation of the strengths and weaknesses of reported accounting information for making different types of business decisions.