Fundamental Financial Accounting Concepts

13807 Words56 Pages
Eighth Edition

Fundamental Financial Accounting Concepts
Thomas P. Edmonds
University of Alabama–Birmingham

Frances M. McNair
Mississippi State University

Philip R. Olds
Virginia Commonwealth University

Edward E. Milam
Mississippi State University (Contributing Author)

FUNDAMENTAL FINANCIAL ACCOUNTING CONCEPTS Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2013, 2011, 2008, 2006, 2003, 2000, 1998, 1996 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval
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While the Statement of Cash Flows is discussed at the end of the text, the concepts that are needed to understand that information were introduced in Chapter 1.”
DEBBIE BENSON, KENNESAW STATE UNIVERSITY

Typically, we show the statements model immediately after each journal entry. For example, the settlement of a liability for interest would be shown as follows:
Account Title Interest Payable Cash Debit 8,400 8,400 Credit

Assets (8,400)

5

Liab. (8,400)

1

Equity NA

Rev. NA

2

Exp. NA

5

Net Inc. NA

Cash Flow (8,400) OA

“The number one strength of the text is the financial statement model approach and delaying introducing debits and credits for several chapters.”
LEAH KRATZ, EASTERN MENNONITE UNIVERSITY

This approach provides a direct visual connection between journal entries and financial statements. It enables students to see how each individual accounting event affects decision making. Executives make few decisions without considering how those decisions affect “bottom line” financial performance measures. The statements model approach encourages students to develop real-world thinking patterns.

● A UNIQUE APPROACH TO THE STATEMENT OF CASH FLOWS
We not only cover the income statement, statement of stockholders’ equity, and the balance sheet, but we also provide comprehensive coverage of the statement of cash flows. Coverage of the statement of cash flows starts in Chapter 1 and is discussed
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