Accounting: Tools for Business Decision Making 4th Edition

Book Preface

What’s new?

The Fourth Edition expands our emphasis on student learning and improves upon a teaching and learning package that instructors and students have rated the highest in customer satisfaction in the following ways:

The Accounting Cycle

For many students, success in an introductory accounting course hinges on developing a sound conceptual understanding of the accounting cycle. In the past, we have received positive feedback regarding the framework that we have employed to introduce the recording process in Chapter 3. In this edition, we have expanded our use of this framework to cover the entire accounting cycle in Chapters 3 and 4.

Anatomy of a Fraud

In the Third Edition, we added a new feature, called Anatomy of a Fraud, to Chapter 7 to illustrate how the lack of specific internal controls resulted in real-world frauds. Many users responded favorably to this new feature and requested that we expand it throughout the textbook to demonstrate the importance of internal controls to all assets and liabilities. Accordingly, in this edition, we have expanded the Anatomy of a Fraud feature to Chapters 5–13.

Chart of Accounts

It is important to always try to eliminate unnecessary barriers to student understanding. Sometimes, the accounting course can seem unnecessarily complicated to students because so many account titles are used. In order to reduce possible confusion, and to keep students focused on those concepts that really matter, in this edition of the textbook we undertook to reduce the number of account titles used. In some chapters, we were able to cut the number of accounts used by more than half. See inside the front cover of the textbook for a sample chart of accounts, which represents the majority of account titles used in the text.

Service Company Coverage

Because the U.S. economy is increasingly comprised of service companies, we have expanded our emphasis on service companies in this edition. We have added sections that specifically address the similarities and differences of applying managerial accounting techniques in a service company environment rather than a manufacturing environment, and expanded our use of service company examples.

Enhanced Homework Material

In each chapter, we have revised all Self-Test Questions, Questions, Brief Exercises, Do it! Review, Exercises, Problems, and Research Cases. Financial analysis and reporting problems have been updated in accordance with the new Tootsie Roll and Hershey financial statements. Finally, new FASB Codification Activities now appear at the end of every chapter and offer students experience in using this system.

Updated International Financial Reporting Standards (IFRS) Content

As we continue to strive to reflect the constant changes in the accounting environment, we have added new material on International Financial Reporting Standards (IFRS).

A new end-of-chapter section, A Look at IFRS, includes an overview section, differences between GAAP and IFRS, IFRS/GAAP convergence efforts, and IFRS Self-Test Questions and IFRS Concepts and Applications. An international financial reporting problem is also included, based on Zetar plc (a U.K. candy company) financial statements, provided in a new Appendix C of the textbook. This will allow students to compare Zetar with U.S. companies Tootsie Roll and Hershey.

This edition was also subject to an overall, comprehensive revision to ensure that it is technically accurate, relevant, and up-to-date. A chapter-by-chapter summary of content changes is provided in the chart on the next page.