business accounting - GBV [PDF]

FRANK WOOD'S

BUSINESS ACCOUNTING TWELFTH EDITION

FRANK WOOD BSc (Econ), FCA and ALAN SANGSTER BA, MSC, PhD, CertTESOL, CA

Financial Times Prentice Hall is an imprint of

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • Madrid • Mexico City • Amsterdam • Munich • Paris • Milan

Contents Guided tour of the book Guided tour of MyAccountingLab Notes for teachers and lecturers Notes for students The Last Lecture Publisher's acknowledgements

viii x xii xv xxv xxvi

Introduction to double entry bookkeeping 1 2 3 4

The accounting equation and the statement of financial position The double entry system for assets, liabilities and capital Inventory The effect of profit or loss on capital and the double entry system for expenses and revenues 5 Balancing-off accounts 6 The trial balance

3 21 33

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45 56 65

The financial statements of sole traders 7 Income statements: an introduction 8 Statements of financial position 9 Income statements and statements of financial position: further considerations / 10 Accounting concepts and assumptions

79 91 -99 112

Books of original entry 11 12 13 14 15 16 17 18 19 20 21 22 23

Books of original entry and ledgers The banking system in the UK Cash books Sales day book and sales ledger Purchases day book and purchases ledger Returns day books Thejournal The analytical petty cash book and the imprest system Value added tax Columnar day books Employees' pay Computers and accounting Computerised accounting systems

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129 135 148 165 174 180 192 203 212 230 238 249 259

Contents

Adjustments for financial statements 24 Capital expenditure and revenue expenditure 25 Bad debts, allowances for doubtful debts, and provisions for discounts on accounts receivable 26 Depreciation of non-current assets: nature and calculations 27 Double entry records for depreciation 28 Accruals and prepayments and other adjustments for financial statements 29 The valuation of inventory 30 Bank reconciliation statements 31 Control accounts 32 Errors not affecting the balancing of the trial balance 33 Suspense accounts and errors Scenario questions Special accounting procedures 34 35 36 37 38 39 40

Introduction to accounting ratios Single entry and incomplete records Receipts and payments accounts and income and expenditure accounts Manufacturing accounts Departmental accounts Statements of cash flows Joint venture accounts

275 285 300 313 335 357 373 386 402 410 428 ; 435 447 467 481 500 509 527

Partnership accounts and company accounts 41 42 43 44 45

Partnership accounts: an introduction Goodwill for sole proprietors and partnerships Revaluation of partnership assets Partnership dissolution An introduction to the financial statements of limited liability companies 46 Purchase of existing partnership and sole proprietor businesses An introduction to financial analysis 47 An introduction to the analysis and interpretation of accounting , statements

537 555 570 578 598 628 | 643

An introduction to management accounting 48 An introduction to management accounting

VI

679

Contents

Appendices 1 Answers to review questions 2 Answers to multiple choice questions 3 Glossary

689 761 762

Index

773

Supporting resources Visitwww.myaccountinglab.com to find valuable online resources: MyAccountingLab for students . • Self-assessment questions to check your understanding • Exam-board style questions to help you pass your exams • Personalised study plan to focus your revision • Guided solutions that help you solve problems, step by step , • An eText to help you revise and let you study anywhere with an Internet connection For instructors, visit www.pearsoned.co.uk/Wood for: • A complete solutions manual • PowerPoint slides that can be downloaded and used for presentations Also: www.pearsoned.co.uk/Wood provides the following features: • Search tool to help locate specific items of content • E-mail results and profile tools to send results of quizzes to instructors • Online help and support to assist with website usage and troubleshooting For more information please contact your local Pearson Education sales representative or visit www.pearsoned.co.uk/Wood

VII