College Accounting / Edition 17

College Accounting / Edition 17

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Cengage Learning


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College Accounting / Edition 17

This text presents concepts simply while ensuring the best, most accurate coverage. College Accounting is designed to make accounting understandable to virtually everyone without sacrificing substance and technical correctness. A step-by-step, straightforward approach helps students build practical accounting skills that are needed when entering the world of work. The text presents simple topics first and gradually builds to more advanced topics, so learners are not overwhelmed. The narrative approach covers a simpler example of a service business before moving to a merchandising business, and finally, a manufacturing environment.

Product Details

ISBN-13: 9780324100976
Publisher: Cengage Learning
Publication date: 04/28/2001
Edition description: Older Edition
Pages: 416
Product dimensions: 8.52(w) x 10.85(h) x 0.54(d)

About the Author

James A. Heintz currently guides today's students as Professor and Director of Accounting and Information Systems in the School of Business at the University of Kansas, where he has taught for 11 years. Prior to joining University of Kansas, he was the Accounting Department Head at the University of Connecticut for eight years. He also served as Assistant, Associate and Full Professor for 20 years at Indiana University. Professor Heintz earned his doctorate from Washington University in St Louis and is a CPA. He was a Price Waterhouse Faculty Fellow at Indiana, an Arthur Andersen Faculty Fellow at Connecticut, and is currently the Deloitte & Touche Faculty Fellow at Kansas. Professor Heintz has won numerous school and university teaching awards, including three teaching awards from the Doctoral Student Association. He has served in various capacities on 24 doctoral dissertation committees. Heintz has published numerous articles in accounting and business journals, including THE ACCOUNTING REVIEW; AUDITING: A JOURNAL OF PRACTICE AND THEORY; ACCOUNTING AND BUSINESS RESEARCH; JOURNAL OF BUSINESS FINANCE AND ACCOUNTING; and INTERNATIONAL JOURNAL OF ACCOUNTING EDUCATION AND RESEARCH. He served on the editorial board of AUDITING: A JOURNAL OF PRACTICE AND THEORY for seven years. Professor Heintz has served on various committees of the AAA and the FSA, and as president of the Accounting Programs Leadership Group of the AAA. He has participated in external reviews of accounting programs at 12 major universities.

Dr. Robert Parry is Professor Emeritus of Accounting at Indiana University's Kelley School of Business in Bloomington, Indiana. An accomplished teacher, Professor Parry has taught accounting at virtually all levels. While earning his MBA, he taught accounting at Bishop Klonowski High School in Pennsylvania. While earning his Ph.D., he taught introductory financial and managerial accounting at Northampton County Community College and Lehigh University. At Indiana, he taught in the undergraduate, MBA, Masters Ph. D. programs. In addition, he has taught accounting in the Consortium of Universities for International Studies in Asolo, Italy. During his 35 years at Indiana University, he won or was nominated for 27 teaching excellence awards, including recognition twice by Business Week as one of the country's Outstanding MBA Faculty. In addition, he was awarded the Indiana University Distinguished Service Award for planning and deploying an integrated MBA Core Program. He also received the Kelley School of Business Innovative Teaching Award for designing and implementing the Master of Science in Accounting Program curriculum. Dr. Parry has conducted research in public finance, governmental accounting, and accounting education. His work has been published in many journals, including Public Finance Quarterly, Public Budgeting and Financial Management, Financial Analysts Journal, Accounting Horizons, Management Accounting, Research in Accounting Regulation, Research in Governmental and Non-Profit Accounting, Issues in Accounting Education, and Journal of Accounting Education. Dr. Parry was lead author on the Service Efforts and Accomplishments research report published by the Governmental Accounting Standards Board. He also served on many committees of the American Accounting Association, including President of the Government and Nonprofit Accounting Section.

Table of Contents

Part 1Accounting for a Service Business
Chapter 1Introduction to Accounting1
The Purpose of Accounting2
The Accounting Process3
Three Types of Ownership Structures3
Sole Proprietorship4
Types of Businesses4
Career Opportunities in Accounting5
Accounting Clerks5
Bookkeepers and Para-Accountants5
Job Opportunities7
Managing Your Writing Feature9
Key Points11
Key Terms11
Review Questions12
Managing Your Writing13
Chapter 2Analyzing Transactions: The Accounting Equation15
The Accounting Elements16
Owner's Equity17
The Accounting Equation18
Analyzing Business Transactions18
Effect of Transactions on the Accounting Equation19
Expanding the Accounting Equation: Revenues, Expenses, and Withdrawals20
Effect of Revenue, Expense, and Withdrawal Transactions on the Accounting Equation22
Financial Statements28
The Income Statement28
The Statement of Owner's Equity30
The Balance Sheet30
Overview of the Accounting Process31
Key Points32
Key Terms33
Demonstration Problem34
Review Questions38
Managing Your Writing38
Exercises and Problems38
Challenge Problem44
Mastery Problem45
Self-Study Test Questions46
Chapter 3The Double-Entry Framework47
The T Account48
Balancing A T Account48
Debits And Credits49
Liabilities and Owner's Equity49
Normal Balances50
Normal Balances for the Owner's Equity Umbrella51
Transaction Analysis52
Debits and Credits: Asset, Liability, and Owner's Equity Accounts52
Debits and Credits: Including Revenues, Expenses, and Drawing55
Summary of Transactions65
The Trial Balance67
Key Points69
Key Terms70
Demonstration Problem70
Review Questions74
Managing Your Writing74
Exercises and Problems74
Challenge Problem82
Mastery Problem83
Self-Study Test Questions85
Chapter 4Journalizing and Posting Transactions87
Flow of Data88
The Chart of Accounts89
Source Documents90
The General Journal91
The General Ledger97
Four-Column Account97
Posting to the General Ledger98
Steps in the Posting Process99
The Trial Balance105
Finding and Correcting Errors in the Trial Balance106
Ruling Method107
Correcting Entry Method108
Key Points109
Key Terms110
Demonstration Problem111
Review Questions116
Managing Your Writing116
Exercises and Problems117
Challenge Problem128
Mastery Problem129
Self-Study Test Questions131
Chapter 5Adjusting Entries and the Work Sheet133
End-Of-Period Adjustments134
Prepaid Insurance137
Wages Expense138
Depreciation Expense139
Expanded Chart of Accounts141
The Work Sheet142
The Ten-Column Work Sheet142
Preparing the Work Sheet142
Preparing the Work Sheet142G
Finding Errors on the Work Sheet144
Journalizing Adjusting Entries144
Posting Adjusting Entries144
Key Points146
Key Terms147
Demonstration Problem148
Review Questions151
Managing Your Writing152
Exercises and Problems152
Challenge Problem167
Mastery Problem168
Self-Study Test Questions170
AppendixDepreciation Methods171
Straight-Line Method171
Double-Declining-Balance Method173
Modified Accelerated Cost Recovery System173
Chapter 6Financial Statements and the Closing Process175
The Financial Statements176
The Income Statement176
The Statement of Owner's Equity176
The Balance Sheet179
Additional Investments by the Owner180
The Closing Process181
Journalize Closing Entries183
Post the Closing Entries185
Post-Closing Trial Balance187
The Accounting Cycle188
Key Points192
Key Terms194
Demonstration Problem194
Review Questions197
Managing Your Writing198
Exercises and Problems198
Challenge Problem207
Mastery Problem208
Self-Study Test Questions210
AppendixStatement of Cash Flows211
Types of Business Activities211
Preparing the Statement of Cash Flows213
Key Points215
Key Terms215
Review Questions215
Exercises and Problems216
Comprehensive Problem 1: The Accounting Cycle217
Part 2Accounting for Cash, Payroll and Service Businesses
Chapter 7Accounting for Cash221
Checking Account222
Opening a Checking Account222
Making Deposits222
Writing Checks225
Bank Statement227
Reconciling the Bank Statement228
Cash Payments228
Reasons for Differences Between Bank and Book Balances229
Steps in Preparing the Bank Reconciliation229
Illustration of a Bank Reconciliation230
Journal Entries231
Electronic Funds Transfer233
The Petty Cash Fund233
Establishing a Petty Cash Fund233
Making Payments from a Petty Cash Fund234
Petty Cash Payments Record234
Replenishing the Petty Cash Fund235
The Change Fund and Cash Short and Over237
Establishing and Operating the Change Fund237
Cash Short and Over237
Key Points239
Key Terms240
Demonstration Problem241
Review Questions243
Managing Your Writing243
Ethics Case243
Web Work244
Exercises and Problems244
Challenge Problem252
Mastery Problem253
Self-Study Test Questions255
Chapter 8Payroll Accounting: Employee Earnings and Deductions257
Employees and Independent Contractors258
Employees Earnings and Deductions258
Salaries and Wages259
Computing Total Earnings259
Deductions from Total Earnings261
Computing Net Pay266
Payroll Records267
Payroll Register267
Payroll Check268
Employee Earnings Record270
Accounting for Employee Earnings and Deductions270
Journalizing Payroll Transactions270
Wages and Salaries Expense272
Employee Income Tax Payable273
Social Security and Medicare Taxes Payable273
Other Deductions273
Payroll Record-Keeping Methods274
Key Points275
Key Terms276
Demonstration Problem277
Review Questions280
Managing Your Writing280
Ethics Case281
Web Work281
Exercises and Problems281
Challenge Problem288
Mastery Problem289
Self-Study Test Questions291
Chapter 9Payroll Accounting: Employer Taxes and Reports293
Employer Payroll Taxes294
Employer's FICA Taxes294
Self-Employment Tax295
Employer's FUTA Tax296
Employer's SUTA Tax296
Accounting for Employer Payroll Taxes297
Journalizing Employer Payroll Taxes297
Payroll Taxes Expense298
Social Security and Medicare Taxes Payable298
FUTA Tax Payable299
SUTA Tax Payable299
Total Payroll Cost of an Employee299
Reporting and Payment Responsibilities300
Federal Income Tax Withholding and Social Security and Medicare Taxes300
FUTA Taxes302
SUTA Taxes305
Employee Wage and Tax Statement305
Summary of Employee Wages and Taxes306
Summary of Reports and Payments306
Workers' Compensation Insurance308
Key Points311
Key Terms312
Demonstration Problem312
Review Questions314
Managing Your Writing315
Ethics Case315
Web Work315
Exercises and Problems315
Challenge Problem322
Mastery Problem323
Self-Study Test Questions324
Chapter 10Accounting for a Professional Service Buisness: The Combination Journal325
Accrual Basis Versus Cash Basis326
Accounting for a Professional Service Business329
The Combination Journal331
Journalizing in a Combination Journal333
Proving the Combination Journal335
Posting from the Combination Journal335
Determining the Cash Balance337
Performing End-of-Period Work for a Professional Service Business337
Preparing the Work Sheet337
Preparing Financial Statements340
Preparing Adjusting and Closing Entries341
Key Points342
Key Terms343
Demonstration Problem344
Review Questions348
Managing Your Writing348
Ethics Case348
Web Work349
Exercises and Problems349
Challenge Problem359
Mastery Problem359
Self-Study Test Questions361
Answers to Self-Study Test Questions362

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