Accounting & Finance for Non-Specialists,
5th edition
By Peter Atrill & Eddie McLaney
Prentice Hall / Financial Times
July 2006
ISBN: 0273702440
538 Pages, Illustrated, 6 3/4 x 9 1/4"
$97.50 Paper
Now in its fifth edition, this successful text introduces the basic principles and underlying concepts of accounting and finance. It adopts a practical, non-technical approach, making it the ideal text for students from non-accounting disciplines. The text is written from a 'user' perspective, demonstrating ways in which accounting statements and financial information can be used to improve the quality of decision making.
Contents
1. Introduction to accounting and finance
Introduction. Learning objectives. What are accounting and finance? Accounting and user needs.
Not-for-rofit organisations. Accounting as a service function. The threshhold of materiality.
Costs and benefits of accounting information. Accounting as an information system.
Planning and control.. Management and financial accounting. Has accounting become too interesting?
Why do I need to know anything about accounting and finance? Business objectives. Summary.
Key terms. Further reading. Review questions
2. Measuring and reporting financial position
Introduction. Learning objectives. The major financial statements - an overview. The balance sheet.
The effect of trading operations on the balance sheet. The classification of assets. The classification of claims.
Balance sheet formats. The balance sheet as a position at a point in time. Accounting conventions and the balance sheet.
Accounting for goodwill and product brands. The basis of valuation of assets on the balance sheet. Interepting the balance sheet.
Summary. Key terms. Further reading. Review questions
3. Measuring and reporting financial performance
Introduction. Learning objectives. The income statement (profit and loss account).
Relationship between the income statement and the balance sheet. The format of the income statement.
The income statement - some further aspects. Profit measurement and the recognition of revenue.
Profit measurement and the recognition of expenses. Profit measurement and the calculation of depreciation.
Profit measurement and inventory costing methods. Profit measurement and the probem of bad or doubtful debts.
Interpreting the income statement. Summary. Key terms. Further reading. Review questions.
4. Accounting for limited companies
Introduction. Learning objectives. Generating wealth through limited companies
Managing a company - corporate governance and the role of directors. Financing limited companies
Raising share capital. Loans and other sources of finance
Restriction on the right of shareholders to make drawings of capital. Accounting for limited companies
The directors' duty to account. The need for accounting rules. The main sources of accounting rules
Directors report. Auditors. Accounting rules and the quality of financial statements
Summary. Key terms. Further reading. Review questions
5. Measuring and reporting cash flows
Introduction. Learning objectives. The cash flow statement. Preparing the cash flow statement
What does the cash flow statement tell us? Summary. Key terms. Further reading. Review questions
6. Analysing and interpreting financial statements
Introduction. Learning objectives. Financial ratios. Financial ratio classifications
The need for comparison. Calculating the ratios. A brief overview
Profitability. Efficiency. The relationship between profitability and efficiency
Liquidity. Gearing. Investment ratios. Trend analysis. Ratios and prediction models
Limitations of ratio analysis. Summary. Key terms. Further reading. Review questions
7. Cost-volume-profit analysis
Introduction. Learning objectives. The behaviour of costs. Fixed costs. Variable costs
Semi-fixed costs. Break-even analysis. Contribution. Margin of safety and operation gearing
Marginal analysis. Accepting/rejecting special contracts. The most efficient use of scarce resources
Make or buy decisions. Closing or continuation decisions
Summary. Key terms. Further reading. Review questions
8. Full costing
Introduction. Learning objectives. The nature of full costing
Deriving full costs in a single product operation. Deriving full costs in multi-product organisations
Activity based costing (ABC). Uses of full cost information. Criticisms of full costing
Summary. Key terms. Further reading. Review questions
9. Budgets
Introduction. Learning objectives
Budgets, long term plans and corporate objectives. Time horizon of plans and budgets
Budgets and forecasts. The interrelationship of various budgets. The uses of budgets
The extent that budgets are prepared. Preparing the cash budget. Preparing other budgets
Using budgets for control. Comparing the actual performance with the budget
Stadard quantities and cost. Reasons for adverse variances
Investigating variances. Compensating variances
Making budgetary control effective. Limitations of the traditional approach to control through variances and standards
Behavioural aspects of budgetary control
Summary. Key terms. Further reading. Review questions
10. Making capital investment decisions
Introduction. Learning objectives
The nature of investment decisions. Methods of investment appraisal
Accounting rate of return (ARR). Payback period (PP)
Net present value (NPV). Why NPV is superior to ARR and PP
Internal rate of return (IRR). Some practical points
Investment appraisal in practice. Summary. Key terms
Further reading. Review questions
11. Managing working capital
Introduction. Learning objectives
The nature and purpose of working capital. The scale of working capital
Managing inventories (stock). Managing receivables (debtors)
Managing cash. Managing trade payables (creditors)
Summary. Key terms. Further reading. Review questions
12. Financing a business
Introduction. Learning objectives
Sources of finance. Internal sources of financing. Sources of external finance
Gearing and the long term finance decision. Share issues. The role of the stock exchange
Short term sources of external finance. Providing long term finance for the small business
Summary. Key terms. Further reading
Review questions. Glossary of key terms
Solutions to self-assessment questions
Solutions to selected exercises
Index
Features
* A lively presentational style with extracts from newspapers and company reports to provide a real-life context.
* Interactive Open-learning approach with numerous activities, worked examples and questions interspersed throughout the text to aid understanding and self-study.
* Wide range of end-of-chapter assessment material, including review questions and exercises. Enables students to test their understanding of the material covered in the chapter.
* Key terms highlighted in the text and at the end of each chapter are explained in a comprehensive glossary.
* An extensive range of additional resources, including further exercises, case studies and multiple-choice questions. Enable students to practice what they have learnt and test their own knowledge.
* New questions on the website that have been tailored to cover four core areas of study: general business, engineering, tourism and leisure and computing.
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