Financial accounting williams 17th edition pdf free download

Introduce the income statement, emphasizing the nature of revenues and expenses. Introduce the statement of cash flows and distinguish among operating, investing, and financing activities.

Explain and illustrate the concept of financial statement articulation. Chapter 02—Basic Financial Statements 7. Explain the importance of adequate disclosure. Our overriding objective in this chapter is to introduce students to the balance sheet, income statement, and statement of cash flows. We find Problem 2. Exercise 1 defining assets and liabilities, stimulates student interest when discussed in class. Also, it is short enough that they can be discussed without having been assigned as homework.

We also recommend Problem 9 or 10 for initiating a lively classroom discussion of many of the concepts introduced in this chapter. In covering Chapter 2, we like to continue the overview of the financial reporting process begun in Chapter 1.

Case 2. Students gain a better understanding of how external users such as investors and creditors may use the information contained in the general purpose financial statements to make better business decisions. Have you considered using annual reports? We encourage students to review these reports throughout the course and to note any similarities and variations between their reports and the textbook treatment of various topics.

These comparisons increase students' interest in the course, prompt interesting questions, and demonstrate the diversity, which exists in practice. We also urge instructors to spend some class time examining how various accounting transactions impact the accounting equation. In the textbook, we walk through the transactions of Overnight Auto Service.

Subsequent to each transaction, we examine the changes that occurred within the accounting equation. This understanding better prepares students to learn the rules of double-entry bookkeeping, which are introduced in Chapter 3.

Instructors may want to present the balance sheet on January 20, alongside the balance sheet on January 31, This enables students to see the culmination of all of the recorded transactions. Students can also compare the financial position and liquidity of the company between the two reports. Students learn to retrieve the quarterly report 10Q from the website. This is a good opportunity for instructors to assist students in navigating the SEC website. When students initially visit the SEC website, they may feel a bit overwhelmed.

At this point, students have the option of searching by company name or ticker symbol if they have that available. After retrieving the filings, they have options to view the documents as well as the Interactive Data.

We find this to be a valuable teaching moment in introducing students to those basic financial research skills. Chapter 02—Basic Financial Statements This chapter briefly introduces the stable dollar assumption.

Students can become familiar with the impact of inflation on monetary valuations using the Inflation Calculator at the Westegg website. This site provides a calculator that allows a monetary amount in one year to be converted into an equivalent amount in a second year. Indicate your answer to each of the following questions in the space provided. Complete the following balance sheet for Manhattan Family Dentistry on January 4 of the current year.

Notes payable Accounts payable Total liabilities Total assets Accounts receivable Appraised value of property ignored. Explain the nature and general purpose of financial statements. No reproduction or distribution without the prior written consent of McGraw-Hill Educat Introduction to Financial Statements Investors and creditors are interested in the cash flows that they expect to receive in the future.

Creditors are interested in the ability of an enterprise, to which they have made loans or sold merchandise on credit, to meet its payment obligations, which may include payment of interest. Investors are interested in the market value of their stock holdings, as well as dividends that the enterprise will pay to them while they own the stock.

Financial Statements A financial statement is simply a declaration of what is believed to be true about an enterprise, communicated in terms of a monetary unit, such as the dollar. When accountants prepare financial statements, they are describing in financial terms certain attributes of the enterprise that they believe fairly represent its financial activities.

Three Primary Financial Statements Statement of financial position often referred to as the balance sheet Income statement Statement of cash flows KEY POINT While examining the financial statements in this chapter, we will be assuming the corporate form of business ownership. Financial Statements: Balance Sheet 1. Statement of Financial Position Balance Sheet a.

Describes where the enterprise stands at a specific date. A snapshot of the business in financial or dollar terms that shows what the enterprise looks like at a specific date. Financial Statements: Income Statement 2. Income Statement a. An activity statement that shows the revenues and expenses for a designated period of time. Revenues have resulted or are expected to result in positive cash flows through transactions with customers.

Expenses result in negative cash flows outflows of cash through business activities. Financial Statements: Statement of Cash Flows 3. Statement of Cash Flows a. Enables the financial statement user to better understand the change in the cash balance shown on the comparative balance sheet.

Features of the Balance Sheet 1. Heading a. Names of the business b. Name of the financial statement c. Date 2. Assets: Generally listed in order of expected liquidity beginning with cash.

Equity: Divided into the categories of capital stock and retained earnings. Assets Assets have three basic characteristics: 1. Economic resources 2. Owned by the business 3. The Cost Principle Historical cost refers to the original amount the entity paid to acquire the asset.

Examples of assets reported at historical cost include merchandise inventory, land, buildings, and equipment. Examples of assets reported at net realizable value, or fair value, include accounts receivable and investments. The Going-Concern Assumption The going-concern assumption indicates that we assume that a business will be a continuing enterprise which will operate for an indefinite period.

This assumption supports the principle of historical cost as most long-term assets are not intended for resale but meant to assist the business in continuing their core operations. The Objectivity Principle Objective describes information that is factual, definite, and verifiable. Objective information lacks subjectivity. Objectivity is a primary reason for reporting long-term assets at historical cost as that value is verifiable.

Your Turn:You as a Home Owner First, assume you have owned your home for 10 years and need to report the value of your home to the city assessor for real estate tax assessment purposes. Journalize transactions. List these steps in the sequence in which they would normally be performed. A detailed under- standing of these eight steps is not required until Chapters 4 and 5.

Record the following selected transactions in general journal form for Quantum Clinic, Inc. Include a brief explanation of the transaction as part of each journal entry. The new corporation was able to begin operations immediately by pur- chasing the assets and taking over the location of Rent-It, an equipment rental company that to them. Self-Test Questions was going out of business. The newly formed company uses the following accounts: The answers to these questions appear on page Face value.

Current value. Estimated future sales value. In broad general terms, what is the purpose of accounting? Why is a knowledge of accounting terms and concepts use- 9.

What is meant by the terms positive cash flows and negative cash flows? How do they relate to revenues and expenses? What are the three categories commonly found in a state- 3. In general terms, what are revenues and expenses? How ment of cash flows, and what is included in each category? What is meant by the statement that the financial statements points in the chapters. Why is the statement of financial position, or balance sheet, What is meant by the term adequate disclosure, and how a logical place to begin a discussion of financial statements?

Demonstration Problem 5. What is the basic accounting equation? Briefly define the do accountants fulfill this requirement in the preparation of financial statements? Critical Thinking Cases and Problems put three primary elements in the equation. What is meant by the term window dressing when referring Account balances for Crystal Auto Wash at September t fi 30, i, l t t are shown t?

Critical Thinking Cases Cash. Capital Stock. In Earnings each of the , Salaries Payable. If you believe the practice is in accord with generally accepted accounting principles, state this as your position and defend it.

A small business in which credit sales fluctuate greatly from year to year uses the direct write- off method both for income tax purposes and in its financial statements. Accounting the edge in homework materials. Computer Systems often sells merchandise in exchange for interest-bearing notes receivable, LO through LO, Affections manufactures candy and sells only to retailers. But the company frequently must borrow money. Due to a sluggish economy, Affections was having difficulty collecting its accounts receivable, and its cash position was unusually low.

Thus the purpose of the meeting was to explore ways in which Affections might improve its made in business. December 31 balance sheet. Some of the ideas discussed are as follows: LO To answer the following questions use the financial statements for Home Depot, Inc. Do these ratios provide support that Home Depot is able to repay its current liabilities as they come due?

Statements are included in Appendix A. Stu- Explain. Does Home Depot appear to have excessive debt? LO learned in the text to situations faced by investors, cred- Explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.

LO Explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation. See our comments on the Online Learning Center website. It provides excellent and accurate coverage of the accounting principles curriculum. Students like it better than any other text I have used.

Financial accounting meigs and meigs pdf. Add a Comment You need to be a member of Co-production practitioners network to add comments! Hello, you need to enable JavaScript to use Co-production practitioners network. Please check your browser settings or contact your system administrator. Chapter 2 covers the income statement, balance sheet, and statement of cash flows. Chapter 1 set forth the objectives of the financial reporting process, and offered the observation that these objectives are met in large part by a set of financial statements.

In this chapter, we take up the task of introducing the balance sheet, income statement, and the statement of cash flows. The presentation is organized around the accounting equation. The equation serves as the basis for elementary transaction analysis. A continuing illustration examines the impact of a number of simple transactions upon the balance sheet of a simple service business.

Revenue and expense transactions have been included so that we might introduce the income statement and statement of cash flows at an elementary level. This in turn has provided the opportunity to discuss and illustrate statement articulation. Before closing, the chapter emphasizes the importance of adequate disclosure regarding both financial and nonfinancial information, thereby reinforcing the Chapter 1 theme that the financial reporting process is broader than the financial statements.

The chapter also covers accounting principles dealing with asset valuation, as well as an introduction to forms of business organization. Learning Objectives 1. Explain the nature and general purpose of financial statements. Explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.

Explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation. Explain how the statement of financial position balance sheet , income statement, and statement of cash flows relate to each other. Explain common forms of business organization—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their statements of financial position.

Discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements. Our objectives in presenting this chapter are: 1.