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Financial Accounting: Reporting, Analysis and Decision Making, 5th Edition

Financial Accounting: Reporting, Analysis and Decision Making, 5th Edition

Shirley Carlon, Rosina McAlpine, Chrisann Palm, Lorena Mitrione, Ngaire Kirk, Lily Wong

ISBN: 978-0-730-32488-1

Jun 2015

930 pages



In recent years accounting education has seen numerous changes to the way financial accounting is taught. These changes reflect the demands of an ever-changing business world, opportunities created by new technology and instructional technologies, and an increased understanding of how students learn. The foundation of Financial Accounting is based on a number of unique principles and innovations in accounting education.

The objective of Financial Accounting is to provide students with an understanding of those concepts that are fundamental to the preparation and use of accounting information. Most students will forget procedural details within a short period of time. On the other hand, concepts, if well taught, should be remembered for a lifetime. Concepts are especially important in a world where the details are constantly changing.

Students learn best when they are actively engaged. The overriding pedagogical objective of Financial Accounting is to provide students with continual opportunities for active learning. One of the best tools for active learning is strategically placed questions. Discussions are framed by questions, often beginning with rhetorical questions and ending with review questions, and our analytical devices, called decision-making toolkits, use key questions to demonstrate the purpose of each.

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Preface xiv

Acknowledgements xviii

1 An introduction to accounting 2

2 The recording process 92

3 Accrual accounting concepts 152

4 Inventories 220

5 Reporting and analysing inventory 268

6 Accounting information systems 324

7 Reporting and analysing cash and receivables 404

8 Reporting and analysing non-current assets 474

9 Reporting and analysing liabilities 534

10 Reporting and analysing equity 588

11 Statement of cash flows 642

12 Financial statement analysis and decision making 720

13 Analysing and integrating GAA P 790


Chapters 1–12, prepared by Wendy Pabst 859


A Domino’s Pizza annual report 2013 (abridged) 879

B Time value of money 917

Index 931

• The focus company is Domino’s Pizza Enterprises Ltd. This company was selected because it has high brand name recognition with students, operates mainly in the retail sector and has clear, easy-to-read financial statements.

• Financial data from various real companies are used to highlight comparative financial results and measure financial performance. Nick Scali Furniture, Fantastic Furniture Holdings, Qantas and Fonterra Co-operative Group Ltd are a sample of the companies profiled.

• There is a clear, well-developed balance between the perspectives of the users and the preparers of financial statements.

• In several chapters, Review it questions concerning Domino’s Pizza Enterprises Ltd relate chapter topics to real-world scenarios.