Accounting & Finance for Non-Specialists,
6th edition


By Peter Atrill
Financial Times/ Prentice Hall
Distributed by Trans-Atlantic Publications Inc.
October 2008
ISBN: 9780273716945
592 Pages
$97.50 paper original


Description

Now in its sixth 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. top

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

The sixth edition has been fully updated and revised throughout and has the following key features:

  • Fully revised and rewritten in line with International Accounting Standards
  • Real World boxes demonstrate the practical application and value of concepts and techniques learnt.  
  • An 'open-learning' approach with numerous activities, worked examples and questions interspersed throughout the text to aid understanding makes the book ideal for self-study
  • The decision making focus on the use of accounting information rather than the preparation is highly appropriate for tomorrow's business managers.

Now supported by the comprehensive MyAccountingLab resource package



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