...P R E FAC E THE ACCOUNTING ENVIRONMENT Accounting is the most employable, sought-after major for 2009, according to entrylevel job site CollegeGrad.com. One reason for this interest is found in the statement by former Secretary of the Treasury and Economic Advisor to the President, Lawrence Summers. He noted that the single-most important innovation shaping our capital markets was the idea of generally accepted accounting principles (GAAP). We agree with Mr. Summers. Relevant and reliable financial information is a necessity for viable capital markets. Without it, our markets would be chaotic, and our standard of living would decrease. This textbook is the market leader in providing the tools needed to understand what GAAP is and how it is applied in practice. Mastery of this material will be invaluable to you in whatever field you select. Through many editions, this textbook has continued to reflect the constant changes taking place in the GAAP environment. This edition continues this tradition, which has become even more significant as the financial reporting environment is exploding with major change. Here are three areas of major importance that are now incorporated extensively into this edition of the text. A New Way of Looking at Generally Accepted Principles (GAAP) Learning GAAP used to be a daunting task, as it is comprised of many standards that vary in form, completeness, and structure. Fortunately, the profession has recently developed the Financial Accounting...
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...PROBLEM 9-4 67 PROBLEM 9-6 68 Chapter 17 70 EXERCISE 17-6 70 Chapter 18 71 PROBLEM 18-1 71 PROBLEM 18-4 74 PROBLEM 18-6 76 PROBLEM 18-7 79 PROBLEM 18-8 81 EXERCISE 18-20 82 EXERCISE 18-21 82 Chapter 22 84 EXERCISE 22-2 84 EXERCISE 22-8 84 EXERCISE 22-11 84 Chapter 23 86 EXERCISE 23-11 86 EXERCISE 23-13 88 EXERCISE 23-15 90 Chapter 1 CA 1-4 It is not appropriate to abandon mandatory accounting rules and allow each company to voluntarily disclose the type of information it considered important. Without a coherent body of accounting theory and standards, each accountant or enterprise would have to develop its own theory structure and set of practices, and readers of financial statements would have to familiarize themselves with every company’s peculiar accounting and reporting practices. As a result, it would be almost impossible to prepare state-ments that could be compared. In addition, voluntary disclosure may not be an efficient way of disseminating information. A company is likely to disclose less information if it has the discretion to do so. Thus,...
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...PROBLEM 9-4 67 PROBLEM 9-6 68 Chapter 17 70 EXERCISE 17-6 70 Chapter 18 71 PROBLEM 18-1 71 PROBLEM 18-4 74 PROBLEM 18-6 76 PROBLEM 18-7 79 PROBLEM 18-8 81 EXERCISE 18-20 82 EXERCISE 18-21 82 Chapter 22 84 EXERCISE 22-2 84 EXERCISE 22-8 84 EXERCISE 22-11 84 Chapter 23 86 EXERCISE 23-11 86 EXERCISE 23-13 88 EXERCISE 23-15 90 Chapter 1 CA 1-4 It is not appropriate to abandon mandatory accounting rules and allow each company to voluntarily disclose the type of information it considered important. Without a coherent body of accounting theory and standards, each accountant or enterprise would have to develop its own theory structure and set of practices, and readers of financial statements would have to familiarize themselves with every company’s peculiar accounting and reporting practices. As a result, it would be almost impossible to prepare state-ments that could be compared. In addition, voluntary disclosure may not be an efficient way of disseminating information. A company is likely to disclose less information if it has the discretion to do so. Thus, the...
Words: 10286 - Pages: 42
