Learn to speak fluent finance--and ace your exams!

Warren Buffett said that "accounting is the language of business.'' And for many accounting and business students, the obscure terminology of accounting makes fluency hard to achieve. Financial Accounting For Dummies can help to demystify abstract concepts in a straightforward, friendly way. With step-by-step examples and real-world scenarios practice, it helps you grasp the fundamentals of accounting until you're ready to interpret, analyze, and evaluate corporate financial statements like you've been doing it all your life.

Packed with easy-to-understand examples, this book takes you from the big three financial statements all the way through to income taxes. Or join the anti-fraud squad by discovering how to spot the ten most common accounting shenanigans.

• Grasp introductory financial accounting course material
• Explore common concepts financial professionals use to compile reports
• Understand leases, free cash flow, and statement analysis

• Learn accounting for small businesses

  Whether you're studying for your bachelor's, MBA, or MAcc, you'll find everything you need to speak the language of finance like a native--and use it to get to wherever you want to go!

  Autorentext

  Maire Loughran, CPA, is a university professor who teaches both undergraduate and graduate accounting classes. She is the author of Auditing For Dummies as well as the previous edition of Financial Accounting For Dummies.

  Klappentext

  Learn to speak fluent finance--and ace your exams! Warren Buffett said that "accounting is the language of business.'' And for many accounting and business students, the obscure terminology of accounting makes fluency hard to achieve. Financial Accounting For Dummies can help to demystify abstract concepts in a straightforward, friendly way. With step-by-step examples and real-world scenarios practice, it helps you grasp the fundamentals of accounting until you're ready to interpret, analyze, and evaluate corporate financial statements like you've been doing it all your life. Packed with easy-to-understand examples, this book takes you from the big three financial statements all the way through to income taxes. Or join the anti-fraud squad by discovering how to spot the ten most common accounting shenanigans. Grasp introductory financial accounting course material Explore common concepts financial professionals use to compile reports Understand leases, free cash flow, and statement analysis Learn accounting for small businesses Whether you're studying for your bachelor's, MBA, or MAcc, you'll find everything you need to speak the language of finance like a native--and use it to get to wherever you want to go!

  Inhalt

  Introduction 1

  About This Book 2

  Foolish Assumptions 2

  Icons Used in This Book 3

  Beyond the Book 3

  Where to Go from Here 4

  Part 1: Getting a Financial Accounting Initiation 5

  Chapter 1: Seeing the Big Picture of Financial Accounting 7

  Knowing the Purposes of Financial Accounting 8

  Preparing financial statements 8

  Showing historic performance 10

  Providing results for the annual report 10

  Getting to Know Financial Accounting Users 11

  Identifying the most likely users 11

  Recognizing their needs 11

  Providing information for decision-making 12

  Respecting the Key Characteristics of Financial Accounting Information 13

  Relevance 13

  Reliability 14

  Comparability 14

  Consistency 15

  Accepting Financial Accounting Constraints 17

  Considering Your Ethical Responsibilities 18

  Following the accountant's code of conduct 18

  Having integrity 19

  Maintaining objectivity 19

  Achieving independence 20

  Introducing the Conceptual Framework of Financial Accounting 21

  Chapter 2: Introducing the Big Three Financial Statements 23

  Gauging the Health of a Business through Its Financials 24

  Reporting Assets and Claims: The Balance Sheet 25

  Realizing why the balance sheet is "classified" 26

  Studying the balance sheet components 26

  Seeing an example of a classified balance sheet 29

  Posting Profit or Loss: The Income Statement 30

  Keeping a scorecard for business activity 30

  Studying the income statement components 31

  Seeing an example of an income statement 33

  Showing the Money: The Statement of Cash Flows 33

  Tracking sources and uses of cash 34

  Studying sections of the cash flow statement 34

  Seeing a short statement of cash flows 35

  Chapter 3: Running the Numbers for Success 37

  Identifying Accounting Issues and Solutions 38

  Selecting a Business Entity 38

  Advantages of the sole proprietorship 39

  Owners' capital 39

  Limiting liability with the S Corporation 40

  Learning about recognition options 41

  Reporting for Small Businesses 42

  Preparing reports 42

  Analyzing reporting 45

  Identifying cost issues 46

  Managing Cash 48

  Identifying cost issues 48

  Improving cash flow 53

  Chapter 4: Acronym Alert! Setting the Standards for Financial Accounting 55

  Walking through the Origins of Number Crunching 56

  Knowing the Role of the American Institute of Certified Public Accountants (AICPA) 58

  ASB audit and attestation standards 59

  AICPA Code of Professional Conduct 60

  Following Regulatory Issues 61

  The U.S Securities and Exchange Commission (SEC) 62

  The Sarbanes-Oxley Act of 2002 (SOX) 63

  The Public Company Accounting Oversight Board (PCAOB) 64

  Getting to Know the Financial Accounting Standards Board (FASB) 65

  Understanding generally accepted accounting principles (GAAP) 66

  Looking online for the FASB's standards 67

  Part 2: Reviewing Some Accounting Basics 69

  Chapter 5: Booking It: The Process Behind Financial Accounting 71

  Shedding Some Light on Bookkeeping 72

  Analyzing the Effect of Business Transactions 73

  Working the fundamental accounting equation 73

  Getting familiar with accounts 74

  Defining debits and credits 76

  Learning about the transaction methodology 77

  Defining Journals 78

  Using journals to record cash transactions 78

  Recording accrual transactions 82

  Learning about other journals 84

  Seeing examples of common journal entries 86

  Bringing It All Together in the Ledger 88

  Realizing what a ledger is 88

  Posting to the ledgers 89

  Viewing an example of a general ledger 89

  Recognizing the purpose of the trial balance 91

  Chapter 6: Focusing on Accounting Methods and Concepts 93

  Distinguishing between Key Accounting Methods 94

  The cash basis 94

  The accrual basis 95

  Sorting through Standards for Other Types of Accounting 96

  Managerial accounting 96

  Not-for-profit accounting 97

  Governmental accounting 98

  International accounting 98

  Considering the Conceptual Framework of Financial Accounting 99

  The objective of financial reporting 100

  Characteristics of accounting information 101

  Elements of the financial statements 101

  Financial statement measurements 102

  Part 3: Spending Quality Time with the Balance Sheet 103

  Chapter 7: Assessing the Balance Sheet's Asset Section 105

  Homing in on Historic Cost 106

  Learning What Makes an Asset Current 106

  Cash 107

  Short-term investments 108

  Accounts receivable 110

  Notes receivable 111

  Inventory 112

  Prepaid expenses 113

  Keeping Track of Noncurrent (Long-Term) Assets 114

  Meeting the tangibles: Property, plant, and equipment (PP&E) 114

  Investigating intangible assets 116

  Studying the Asset Section of the Balance Sheet 118

  Chapter 8: Digging for Debt in the Liabilities Section 121

  Seeing How Businesses Account for Liabilities 122

  Keeping Current Liabilities under Control 123

  Accounts payable 124

  Payroll and taxes 125

  Unearned revenue 127

  Other short-term liabilities 128

  Planning for Long-Term Obligations 130

  Managing long-term debt 131

  Anticipating contingent liab…