Table of Contents Preface to the sixth edition Guided tour of the book Publisher''s acknowledgements Part 1 A conceptual framework: setting the scene Chapter 1 Who needs accounting? Real World Case Learning outcomes 1.1 Introduction 1.2 The development of a conceptual framework 1.3 Framework for the preparation and presentation of financial statement 1.4 Types of business entity 1.5 Users and their information needs 1.6 General purpose or specific purpose financial statements? 1.7 Stewards and agents 1.

8 Who needs financial statement? 1.9 Summary Further reading Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: introduction to the terminology of business transactions. Test your understanding Chapter 2 A systematic approach to financial reporting: the accounting equation Real World Case Learning outcomes 2.1 Introduction 2.2 The accounting equation 2.3 Defining assets 2.4 Examples of assets 2.5 Recognition of assets 2.

6 Defining liabilities 2.7 Examples of liabilities 2.8 Recognition of liabilities 2.9 Defining the ownership interest 2.10 Recognition 2.11 Changes in the ownership interest 2.12 Assurance for users of financial statement 2.13 Summary Further reading Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: debit and credit bookkeeping Test your understanding Chapter 3 Financial statements from the accounting equation Real World Case Learning outcomes 3.

1 Introduction 3.2 Who is in charge of the accounting system? 3.3 The accounting period 3.4 The statement of financial position (balance sheet) 3.5 the income statement (profit and loss account) 3.6 The statement of cash flows 3.7 Usefulness of financial statement 3.8 Summary Further reading Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: using the accounting equation to analyse transaction Test your understanding Chapter 4 Ensuring the quality of financial statements Real World Case Learning outcomes 4.

1 Introduction 4.2 Qualitative characteristics of financial statements 4.3 Measurement in financial statements 4.4 Views of prudence 4.5 Regulation of financial reporting 4.6 Reviewing published financial statements 4.7 Summary Further reading Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Part 2 Reporting the transactions of a business Chapter 5 Accounting information for service businesses Real World Case Learning outcomes 5.1 Introduction 5.

2 Analysing transactions using the accounting equation 5.3 Illustration of accounting for a service business 5.4 A process for summarising the transactions: a spreadsheet 5.5 Financial statements as a means of communication 5.6 Summary Questions A Test your understanding B Application Supplement: recording transactions in ledger accounts - a service business Test your understanding Chapter 6 Accounting information for trading businesses Real World Case Learning outcomes 6.1 Introduction 6.2 Goods purchased for resale 6.3 Manufacturing goods for resale 6.

4 Illustration of accounting for a trading business 6.5 A process for summarising the transactions: a spreadsheet 6.6 Financial statement of M. Carter, wholesaler 6.7 Summary Questions A Test your understanding B Application Supplement: recording transactions in ledger accounts: a trading business Test your understanding Part 3 Recognition in financial statements Chapter 7 Published financial statements Real World Case Learning outcomes 7.1 Introduction 7.2 International influences 7.3 Accounting framework 7.

4 Statement of financial position (balance sheet) 7.5 Income statement (profit and loss account) 7.6 Statement of cash flows 7.7 Group structure of companies 7.8 Group financial statements 7.9 Small and medium-sized entities (SMEs) 7.10 Beyond the annual report 7.11 Summary Further reading Useful websites Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Suppleemnt 7.

1 information to be presented on the face of the balance sheet, as required by IAS 1 Supplement 7.2: balance sheet format 1, as prescribed by the Companies Act 2006 Supplement 7.3: information to be presented on the face of the Income Statement as required by IAS 1 Supplement 7.4: UK Companies Act profit and loss account format 1 - list of contents Chapter 8 Non-current (fixed) assets Real World Case Learning outcomes 8.1 Introduction 8.2 Definitions 8.3 Recognition 8.4 Users'' needs for information 8.

5 Information provided in the financial statements 8.6 Usefulness of published information 8.7 Depreciation: an explanation of its nature 8.8 Reporting non-current (fixed) assets and depreciation in financial statements 8.9 Summary Further reading Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: recording non-current (fixed) assets and depreciation Test your understanding Chapter 9 Current assets Real World Case Learning outcomes 9.1 Introduction 9.2 Definitions 9.3 The working capital cycle 9.

4 Recognition 9.5 Users'' needs for information 9.6 Information provided in the financial statements 9.7 measurement and recording 9.8 Inventories (stocks) of raw materials and finished goods 9.9 Receivables (debtors) 9.10 Prepayments 9.11 Revenue recognition 9.

12 Summary Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: bookkeeping entries for 9a0 bad and doubtful debts; and (b) prepayments Test your understanding Chapter 10 Current liabilities Real World Case Learning outcomes 10.1 Introduction 10.2 Definitions 10.3 Recognition 10.4 Users'' needs for information 10.5 Information provided in the finacial statements 10.6 Measurement and recording 10.7 Accruals and the matching concept 10.

8 Liabilities for taxation 10.9 Summary Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: bookkeeping entries for accruals Test your understanding Chapter 11 Provisions and non-current (long-term) liabilities Real World Case Learning outcomes 11.1 Introduction 11.2 Users'' needs for information 11.3 Information provided in the financial statements 11.4 Provisions 11.5 Deferred income 11.6 Non-current (long-term) liabilities 11.

7 Summary Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: bookkeeping entries for provisions and deferred income Test your understanding Chapter 12 Ownership interest Real World Case Learning outcomes 12.1 Introduction 12.2 Definition and recognition 12.3 Presentation of ownership interest 12.4 Statement of changes in equity 12.5 Users'' needs for information 12.6 Information provided in the financial statements 12.7 Dividends 12.

8 Issue of further shares on the Stock Exchange 12.9 Summary Questions A Testing your understanding B Application C Problem solving and evaluation Activities for study groups Notes and references Supplement: a spreadsheet for adjustment to a trial balance at the end of the accounting period Test your understanding Part 4 Analysis and issues in reporting Chapter 13 Ratio analysis Real World Case Learning outcomes 13.1 Introduction 13.2 A note on terminology 13.3 Systematic approach to ratio analysis 13.4 Investors'' views on risk and return 13.5 Pyramid of ratios 13.6 Use and limitations of ratio analysis 13.

7 Worked example of ratio analysis 13.8 Linking ratios to the statement of cash flows 13.9 Combining ratios for interpretation 13.10 Summary Questions A Testing your understanding B Application C Problem sol.