1 An Introduction to Accounting

LEARNING OBJECTIVES

1.1 Accounting is an information system

1.2 Forms of organization

1.3 The framework for the preparation and presentation of financial statements—The conceptual framework

1.4 Understanding of financial statements

1.5 Accounting and its profession

1.6 Accounting elements and using accounting equation

1.7 Professional ethics in accounting

Vocabulary

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2 Journalizing and Posting Transactions

LEARNING OBJECTIVES

2.1 Economic events and original documents

2.2 T-accounts and debit&credit

2.3 Journalizing and posting transactions

2.4 Preparing a trial balance

2.5 Practices in China

Vocabulary

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3 Adjusting and Preparing Financial Statements

LEARNING OBJECTIVES

3.1 The need for adjustments

3.2 Adjusting the accounts

3.3 Adjusted trial balance and preparation of financial statements

3.4 The worksheet

3.5 Closing entries

3.6 Post-closing trial balance

3.7 The accounting cycle summary

3.8 Classification of balance sheet items

3.9 Practices in China

3.10 Using the accounting information—the current ratio

Vocabulary

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4 MerChandising Activities and Accounting Information Systems

LEARNING OBJECTIVES

4.1 Service enterprise versus merchandising concern

4.2 Purchase,sales revenue and cost of goods sold

4.3 AIternative income statement formats

4.4 Worksheet for a merchandising enterprise and closing entries

4.5 Accounting systems

4.6 Special iournals

4.7 Chinese practice

4.8 Using the information—quick ratio and gross margin ratio

Vocabulary

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5 Operating Cycle：Cash,Receivables and Sales

LEARNING OBJECTIVES

5.1 Cash,cash equivalents and liquidity

5.2 Operating,investing and financing activities

5.3 Internal control over cash

5.4 The petty cash fund

5.5 Reconciling the bank balance

5.6 Credit sales and bad debts

5.7 Promissory notes

5.8 Converting receivable into cash

5.9 Cash,receivables,sales and the cash flow

5.10 Using the information—accounts receivable turnover

Vocabulary

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6 Operating Cycle：Cost of Goods Sold and Inventory

LEARNING OBJECTIVES

6.1 Costs to be included in inventory

6.2 Inventory systems

6.3 Inventory cost flow assumptions

6.4 Inventory errors

6.5 Valuation using lower of cost or market（LCM）method

6.6 Inventory estimation method

6.7 Cost of goods sold,inventory and cash flow

6.8 Other expenses and cash flow

6.9 Analysis the accounting information—inventory turnover

Vocabulary

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7 Investing in Operating Assets

LEARNING OBJECTIVES

7.1 Non-current operating assets

7.2 Acquisition of fixed assets

7.3 Depreciation

7.4 Disposal of plant assets

7.5 Accounting for natural resources

7.6 Accounting for intangible assets

7.7 Impairment of fixed assets

7.8 Interest and dividend receipts in cash flow statement

7.9 Using the information—total asset turnover and return on total assets

Vocabulary

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8 Investing in Securities

LEARNING OBJECTIVES

8.1 Investment classification

8.2 Trading securities

8.3 Available-for-sale securities

8.4 Held-to-maturity securities

8.5 Accounting for long-term investments in equity securities

8.6 Impairment of long-term investment

Vocabulary

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9 Financing with Debt

LEARNING OBJECTIVES

9.1 The nature of liabilities

9.2 Current liabilities

9.3 Contingencies

9.4 Classify cash transactions related with short-term liabilities in cash flow statement of cash flows

9.5 Time value of money

9.6 Long-term liabilities

9.7 Using the information—times interest earned

Vocabulary

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10 Financing with Equity

LEARNING OBJECTIVES

10.1 Business organization

10.2 Shareholders’equity

10.3 Capital vs.retained earnings

10.4 Corporate capital

10.5 Retained earnings

10.6 Dividends and stock split

10.7 Treasury stock

10.8 Earnings per share（EPS）

10.9 Dividend yield and price-earnings ratio

Vocabulary

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11 The Statement of Cash Flow

LEARNING OBJECTIVES

11.1 Brief introduction

11.2 Cash and cash equivalents

11.3 Composition of cash flow statement

11.4 Determining cash flow from operating activities

11.5 Determining cash flow from investing activities

11.6 Determining cash flow from financing activities

11.7 Presenting the information in the form of the statement of cash flows

11.8 Usefulness of the cash flow statement

11.9 Format of cash flow statement for reference in China

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Appendix

1 Answers to Exercises and Problems

2 Balance Sheet

3 Income Statement

4 Future Value of$1

5 Present Value of$1

6 Future Value of Annuity of$1

7 Present Value of Annuity of$1