Additional Information
Book Details
Abstract
"The 10th edition of this market-leading text offers an accessible, effective introduction to key accounting and finance topics. If you are new to accounting, or are studying a degree in accounting, this book will help you get to grips with the important principles of accounting and how to apply your learning to real-world business scenarios in a user-friendly manner.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Cover\r | Cover | ||
| Title Page | iii | ||
| Copyright Page | iv | ||
| Brief contents\r | v | ||
| Contents\r | vii | ||
| Preface\r | xv | ||
| Ackowledgements\r | xvii | ||
| 1 Introduction to accounting and finance | 1 | ||
| Introduction | 1 | ||
| What are accounting and finance? | 2 | ||
| Who are the users of accounting information? | 2 | ||
| Providing a service | 5 | ||
| Weighing up the costs and benefits | 7 | ||
| Accounting as an information system | 9 | ||
| Management accounting and financial accounting | 11 | ||
| Scope of this book | 13 | ||
| The changing face of accounting | 14 | ||
| Why do I need to know anything about accounting and finance? | 15 | ||
| The quest for wealth creation | 16 | ||
| Meeting the needs of other stakeholders | 17 | ||
| Balancing risk and return | 20 | ||
| Not-for-profit organisations | 21 | ||
| Summary | 23 | ||
| Key terms | 24 | ||
| Further reading | 25 | ||
| Review questions | 25 | ||
| Part One: Financial Accounting | 27 | ||
| 2 Measuring and reporting financial position | 28 | ||
| Introduction | 28 | ||
| The major financial statements – an overview | 29 | ||
| The statement of financial position | 34 | ||
| The effect of trading transactions | 41 | ||
| Classifying assets | 43 | ||
| Classifying claims | 46 | ||
| Statement layouts | 47 | ||
| Capturing a moment in time | 49 | ||
| The role of accounting conventions | 50 | ||
| Money measurement | 54 | ||
| Valuing assets | 57 | ||
| Meeting user needs | 63 | ||
| Summary | 65 | ||
| Key terms | 67 | ||
| Further reading | 67 | ||
| Review questions | 68 | ||
| Exercises | 68 | ||
| 3 Measuring and reporting financial performance | 71 | ||
| Introduction | 71 | ||
| The income statement | 72 | ||
| Different roles | 73 | ||
| Income statement layout | 74 | ||
| Further issues | 77 | ||
| Recognising revenue | 80 | ||
| Recognising expenses | 84 | ||
| Depreciation | 89 | ||
| Costing inventories | 99 | ||
| Trade receivables problems | 104 | ||
| Uses and usefulness of the income statement | 106 | ||
| Summary | 108 | ||
| Key terms | 110 | ||
| Further reading | 110 | ||
| Review questions | 110 | ||
| Exercises | 111 | ||
| 4 Accounting for limited companies | 115 | ||
| Introduction | 115 | ||
| The main features of limited companies | 116 | ||
| The role of the Stock Exchange | 122 | ||
| Managing a company | 122 | ||
| The UK Corporate Governance Code | 125 | ||
| Financing limited companies | 127 | ||
| Borrowings | 135 | ||
| Withdrawing equity | 136 | ||
| The main financial statements | 139 | ||
| Dividends | 142 | ||
| Additional financial statements | 144 | ||
| The directors’ duty to account | 147 | ||
| The need for accounting rules | 147 | ||
| Sources of accounting rules | 148 | ||
| The auditors’ role | 149 | ||
| Management commentary | 150 | ||
| Creative accounting | 152 | ||
| Summary | 156 | ||
| Key terms | 158 | ||
| Further reading | 159 | ||
| Review questions | 159 | ||
| Exercises | 160 | ||
| 5 Measuring and reporting cash flows | 164 | ||
| Introduction | 164 | ||
| The statement of cash flows | 165 | ||
| Why is cash so important? | 166 | ||
| The main features of the statement of cash flows | 168 | ||
| A definition of cash and cash equivalents | 168 | ||
| The relationship between the main financial statements | 170 | ||
| The layout of the statement of cash flows | 170 | ||
| The normal direction of cash flows | 173 | ||
| Preparing the statement of cash flows | 175 | ||
| What does the statement of cash flows tell us? | 185 | ||
| Summary | 188 | ||
| Key terms | 189 | ||
| Further reading | 189 | ||
| Review questions | 189 | ||
| Exercises | 190 | ||
| 6 Analysing and interpreting financial statements | 195 | ||
| Introduction | 195 | ||
| Financial ratios | 196 | ||
| Financial ratio classifications | 197 | ||
| The need for comparison | 198 | ||
| Calculating the ratios | 200 | ||
| A brief overview | 201 | ||
| Profitability | 203 | ||
| Efficiency | 210 | ||
| Relationship between profitability and efficiency | 216 | ||
| Liquidity | 218 | ||
| Financial gearing | 220 | ||
| Investment ratios | 225 | ||
| Trend analysis | 234 | ||
| Using ratios to predict financial failure | 235 | ||
| Limitations of ratio analysis | 235 | ||
| Summary | 239 | ||
| Key terms | 240 | ||
| Further reading | 241 | ||
| Review questions | 241 | ||
| Exercises | 242 | ||
| Part Two: Management Accounting | 247 | ||
| 7 The relevance and behaviour of costs | 248 | ||
| Introduction | 248 | ||
| What is meant by ‘cost’? | 249 | ||
| Relevant costs: opportunity and outlay costs | 250 | ||
| Cost behaviour | 254 | ||
| Fixed cost | 254 | ||
| Variable cost | 256 | ||
| Semi-fixed (semi-variable) cost | 258 | ||
| Finding the break-even point | 258 | ||
| Contribution | 265 | ||
| Margin of safety | 265 | ||
| Operating gearing | 269 | ||
| Failing to break even | 271 | ||
| Weaknesses of break-even analysis | 271 | ||
| Using contribution to make decisions: marginal analysis | 274 | ||
| Summary | 282 | ||
| Key terms | 284 | ||
| Further reading | 284 | ||
| Review questions | 285 | ||
| Exercises | 285 | ||
| 8 Full costing | 289 | ||
| Introduction | 289 | ||
| What is full costing? | 290 | ||
| Why do managers want to know the full cost? | 290 | ||
| Single-product businesses | 292 | ||
| Multi-product businesses | 293 | ||
| Overheads as service renderers | 298 | ||
| Activity-based costing | 310 | ||
| Using full (absorption) cost information | 319 | ||
| Summary | 322 | ||
| Key terms | 324 | ||
| Further reading | 324 | ||
| Review questions | 324 | ||
| Exercises | 325 | ||
| 9 Budgeting | 329 | ||
| Introduction | 329 | ||
| How budgets link with strategic plans and objectives | 330 | ||
| Time horizon of plans and budgets | 332 | ||
| How budgets help managers | 333 | ||
| Budgets and forecasts | 335 | ||
| Limiting factors | 336 | ||
| How budgets link to one another | 336 | ||
| Using budgets in practice | 339 | ||
| Preparing budgets | 340 | ||
| Non-financial measures in budgeting | 347 | ||
| Budgeting for control | 347 | ||
| Measuring variances from budget | 348 | ||
| Making budgetary control effective | 355 | ||
| Behavioural issues | 356 | ||
| The use of variance analysis | 357 | ||
| Summary | 359 | ||
| Key terms | 361 | ||
| Further reading | 361 | ||
| Review questions | 361 | ||
| Exercises | 362 | ||
| Part Three: Finance | 367 | ||
| 10 Making capital investment decisions | 368 | ||
| Introduction | 368 | ||
| The nature of investment decisions | 369 | ||
| Investment appraisal methods | 370 | ||
| Accounting rate of return (ARR) | 372 | ||
| Payback period (PP) | 377 | ||
| Net present value (NPV) | 381 | ||
| Why NPV is better | 388 | ||
| Internal rate of return (IRR) | 389 | ||
| Some practical points | 395 | ||
| Investment appraisal in practice | 399 | ||
| Investment appraisal and strategic planning | 401 | ||
| Summary | 402 | ||
| Key terms | 404 | ||
| Further reading | 405 | ||
| Review questions | 405 | ||
| Exercises | 405 | ||
| 11 Financing a business | 411 | ||
| Introduction | 411 | ||
| The main objective of financing policy | 412 | ||
| Sources of finance | 412 | ||
| Internal sources of finance | 412 | ||
| Internal sources of long-term finance | 413 | ||
| Internal sources of short-term finance | 414 | ||
| External sources of finance | 417 | ||
| External sources of long-term finance | 417 | ||
| Forms of borrowing | 421 | ||
| External sources of short-term finance | 432 | ||
| Long-term versus short-term borrowing | 435 | ||
| Gearing and the financing decision | 436 | ||
| Raising long-term finance | 438 | ||
| The role of the Stock Exchange | 443 | ||
| The Alternative Investment Market | 446 | ||
| Providing long-term finance for the small business | 447 | ||
| Islamic finance | 449 | ||
| Summary | 451 | ||
| Key terms | 454 | ||
| References | 454 | ||
| Further reading | 455 | ||
| Review questions | 455 | ||
| Exercises | 455 | ||
| 12 Managing working capital | 460 | ||
| Introduction | 460 | ||
| What is working capital? | 461 | ||
| The scale of working capital | 463 | ||
| Managing inventories | 466 | ||
| Managing trade receivables | 477 | ||
| Managing cash | 487 | ||
| Managing trade payables | 496 | ||
| Summary | 501 | ||
| Key terms | 504 | ||
| Further reading | 504 | ||
| Review questions | 504 | ||
| Exercises | 505 | ||
| Appendix A: Glossary of key terms | 509 | ||
| Appendix B: Solutions to self-assessment questions | 523 | ||
| Appendix C: Solutions to review questions | 538 | ||
| Appendix D: Solutions to selected exercises | 550 | ||
| Appendix E: Present value table | 578 | ||
| Index | 580 |