Using Accounting Information

This book is the fifth of seven books which introduces the basic principles of accounting. In this book you learn about special financial reporting topics, financial statement analysis, and the statement of cash flows. Topics include discontinued operations, extraordinary items, changes in accounting methods, and other comprehensive income. Important financial reporting ratios, such as earnings per share, price earnings ratio, and book value per share are discussed. Ratio and trend analysis are presented as tools to understand financial statement information.

Part 1. Financial Reporting and Concepts

1. Special Reporting Situation
1.1 Corrections of Errors
1.2 Discontinued operations
1.3 Extraordinary Items
1.4 Changes in Accounting Methods
1.5 Other Comprehensive Income
1.6 Recap
1.7 Ebit and Ebitda
1.8 Return on Assets

2. Earnings per Share, Price Earnings Ratios, Book Value per Share and Dividend Rates
2.1 Basic EPS
2.2 Diluted EPS
2.3 Subdividing APS Amounts
2.4 Price Earnings Ratio
2.5 Book Value per Share
2.6 Calculating Book Value per Share
2.7 Dividend Rates and Payout Ratios
2.8 Return on Equity

3. Objectives of Financial Reporting
3.1 Objectives

4. Qualitative Character-Istics of Accounting
4.1 Understand-Ability
4.2 Threshold Issues
4.3 Other Concepts

5. The Development of Gap
5.1 The Audit Function
5.2 The Development of Gap
5.3 The 1929 Stock Crash and Great Depressions
5.4 The Securities and Exchange Commissions
5.5 The Fasb and its Predecessors
5.6 A More Recent Crisis of Reporting Confidence
5.7 Sarbanes-Oxley

6. Key Assumptions
6.1 Entity Assumption
6.2 Going-Concern Assumption
6.3 Periodicity Assumption
6.4 Monetary Unit Assumption
6.5 Stable Currency Assumption
6.6 What do you Think?

7. Global Accounting Issues
7.1 Issues in International Trade
7.2 Global Subsidiaries
7.3 Global Trading Transactions

Part 2. Financial Analysis and the Statement of Cash Flows

8. Financial Statement Analysis
8.1 Comprehensive Illustration
8.2 Balance Sheet
8.3 Income Statement
8.4 Statement of Retained Earnings
8.5 Ratios for Emerson Corporation as of December 31, 20x5
8.6 Trend Analysis

9. Cash Flow and the Cash Flow Statement
9.1 The Statement of Cash Flow
9.2 Cash and Cash Equivalents

10. Operating, Investing and Financing Activities
10.1 Investing Activities
10.2 Financing Activities

11. Noncash Investing and Financing Activities

12. Direct Approach to the statement of Cash Flows
12.1 Methods to Prepare a Statement of Cash Flows
12.2 Operating Activities
12.3 Investing Activities
12.4 Financing Activities
12.5 Cash Flow Recap
12.6 Noncash Investing/Financing Activities
12.7 Reconciliation of Income to Operating Cash Flows

13. Indirect Approach to Presenting Operating Activities

14. Using a Worksheet to Prepare a Statement of Cash Flow

Larry M. Walther, Ph.D., CPA, CMA, is the Ernst & Young Professor and Head of the School of Accountancy at Utah State University. Dr. Walther has authored numerous accounting textbooks and articles, and has served as director and/or consultant to a number to a number of public and nonpublic companies. Dr. Walther obtained his Ph.D. in accounting from Oklahoma State University and has public accounting experience with Ernst & Young. He currently serves as the accounting accreditation committee of the AACSB and is past president for the federation of schools of accountancy.

Dr. Chris Skousen obtained his Ph.D. at Oklahoma State University. He earned MBA and BA degrees from Utah State University. Dr. Skousen gained public accounting auditing experience with KPMG in their Portland, Oregon office, and as an intern in their in Düsseldorf, Germany office, and at Squire & Co. Dr. Skousen has taught accounting at Utah State University, The University of Texas at Arlington, Oklahoma State University, and Brigham Young University-Idaho. He has published in Accounting Horizons, Behavior Research in Accounting, Accounting and the Public Interest, and other journals.