内容

目次

About the Author xv About the Book xvii Acknowledgements xxiii 1 INTRODUCTION TO ACCOUNTING AND FINANCE 1 Introduction 2 Nature of Accounting and Finance 2 Importance of Accounting and Finance 4 Financial Accounting and Management Accounting 5 Users of Accounts 7 Accounting Context 9 Types of Accountancy 12 Types of Accountant 18 Limitations of Accounting 21 Conclusion 21 Discussion Questions 23 SECTION A: FINANCIAL ACCOUNTING: THE TECHNIQUES 25 2 THE ACCOUNTING BACKGROUND 27 Introduction 28 Financial Accounting 28 Language of Accounting 30 The Process of Accounting 38 The Accounting Equation 38 Student Example 44 Why Is Financial Accounting Important? 48 Accounting Principles 48 Accounting Conventions 49 Conclusion 51 Discussion Questions 52 Numerical Questions 53 Appendix 2.1: Illustration of a Consolidated Income Statement for Marks & Spencer plc 2010 55 Appendix 2.2: Illustration of a Consolidated Statement of Financial Position for Marks and Spencer plc 2010 57 Appendix 2.3: Illustration of a Consolidated Statement of Cash Flows for Marks and Spencer 2010 59 Appendix 2.4: Illustration of a Consolidated Income Statement for Volkswagen 2009 61 Appendix 2.5: Illustration of a Consolidated Balance Sheet (Statement of Financial Position) for Volkswagen 2009 62 Appendix 2.6: Illustration of a Consolidated Cash Flow Statement (Statement of Cash Flows) for Volkswagen 2009 64 3 MAIN FINANCIAL STATEMENTS: THE INCOME STATEMENT (PROFIT AND LOSS ACCOUNT) 66 Introduction 67 Context 67 Definitions 69 Layout 71 Main Components 72 Profit 80 Listed Companies 83 Capital and Revenue Expenditure 83 Limitations 84 Interpretation 84 Conclusion 84 Discussion Questions 85 Numerical Questions 85 4 MAIN FINANCIAL STATEMENTS: THE STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) 87 Introduction 88 Context 89 Definitions 90 Layout 91 Main Components 93 Limitations 104 Interpretation 105 Listed Companies 106 Conclusion 106 Discussion Questions 107 Numerical Questions 108 Appendix 4.1: Horizontal Format of Statement of Financial Position 109 5 PREPARING THE FINANCIAL STATEMENTS 110 Introduction 111 Main Financial Statements 111 Trial Balance to the Income Statement (Profi t and Loss Account) and the Statement of Financial Position (Balance Sheet) 113 Adjustments to Trial Balance 117 Comprehensive Example 125 Conclusion 129 Discussion Questions 129 Numerical Questions 130 6 PARTNERSHIPS AND LIMITED COMPANIES 142 Introduction 143 Context 144 Partnerships 145 Limited Companies 151 Distinctive Accounting Features of Limited Companies 155 Accounting Treatment For Limited Companies 164 Limited Company Example: Stevens, Turner Ltd 166 Limited Companies: Published Accounts 171 Conclusion 176 Discussion Questions 177 Numerical Questions 178 Appendix 6.1: Example of an Income Statement (Profi t and Loss Account) using UK GAAP (Manchester United Ltd) 188 Appendix 6.2: Example of a Statement of Financial Position (Balance Sheet) using UK GAAP (Manchester United Ltd) 189 7 MAIN FINANCIAL STATEMENT: THE STATEMENT OF CASH FLOWS 191 Introduction 192 Importance of Cash 193 Context 195 Cash and the Bank Account 195 Relationship between Cash and Profi t 199 Preparation of Statement of Cash Flows 201 Conclusion 215 Discussion Questions 215 Numerical Questions 216 Appendix 7.1: Main Headings for the Cash Flow Statement (Statement of Cash Flows) for Sole Traders, Partnerships and some Non–Listed Companies under UK GAAP 223 Appendix 7.2: Preparation of a Sole Trader???s Cash Flow Statement Using the Direct Method Using UK Format 224 Appendix 7.3: Preparation of the Cash Flow Statement of Any Company Ltd using the Indirect Method Using UK GAAP 225 Appendix 7.4: Example of Statement of Cash Flow (Cash Flow Statement) Using UK GAAP (Manchester United Ltd) 228 8 INTERPRETATION OF ACCOUNTS 230 Introduction 231 Context 231 Overview 232 Importance of Ratios 234 Closer Look at Main Ratios 235 Worked Example 247 Report Format 255 Holistic View of Ratios 257 Performance Indicators 258 Limitations 259 Conclusion 260 Discussion Questions 261 Numerical Questions 262 Appendix 8.1: John Brown Plc 271 Appendix 8.2: The Cash Flows Ratio using UK GAAP 273 SECTION B: FINANCIAL ACCOUNTING: THE CONTEXT 275 9 REGULATORY AND CONCEPTUAL FRAMEWORKS 277 Introduction 278 Traditional Corporate Model: Directors, Auditors and Shareholders 279 Regulatory Framework 284 Regulatory Framework in the UK 290 Corporate Governance 295 Conceptual Framework 300 Conclusion 308 Selected Reading 309 Discussion Questions 310 10 MEASUREMENT SYSTEMS 311 Introduction 312 Overview 312 Measurement Systems 315 Deficiencies of Historical Cost Accounting 317 Illustrative Example of Different Measurement Systems 317 Real Life 320 Conclusion 321 Selected Reading 321 Discussion Questions 322 11 THE ANNUAL REPORT 323 Introduction 324 Definition 324 Context 325 Multiple Roles 326 Main Contents of the Annual Report 331 Presentation 348 Group Accounts 350 Impression Management 354 Conclusion 357 Selected Reading 358 Discussion Questions 359 SECTION C: MANAGEMENT ACCOUNTING 361 12 INTRODUCTION TO MANAGEMENT ACCOUNTING AND FINANCE 363 Introduction 364 Context 365 Relationship with Financial Accounting 366 Relationship between Management Accounting and Finance 368 Overview 368 Cost Minimisation and Revenue Maximisation 376 Use of Computers and Impact of Digital Technology 377 Art not a Science 378 Changing Nature of Management Accounting 379 Conclusion 379 Selected Reading 380 Discussion Questions 381 13 COSTING 382 Introduction 383 Importance of Cost Accounting 384 Types of Cost 385 Traditional Costing 389 Activity–Based Costing 395 Costing for Inventory Valuation 399 Different Costing Methods for Different Industries 403 Target Costing 407 Cost–Cutting 407 Conclusion 408 Discussion Questions 409 Numerical Questions 409 14 PLANNING, CONTROL AND PERFORMANCE: BUDGETING 415 Introduction 416 Management Accounting Control Systems 416 Nature of Budgeting 417 Cash Budget 421 Other Budgets 422 Manufacturing Budgets 425 Comprehensive Budgeting Example 428 Behavioural Aspects of Budgeting 433 Responsibility Accounting 437 Conclusion 439 Discussion Questions 439 Numerical Questions 440 15 PLANNING, CONTROL AND PERFORMANCE: STANDARD COSTING 445 Introduction 446 Nature of Standard Costing 447 Standard Cost Variances 448 Interpretation of Variances 457 Conclusion 458 Discussion Questions 459 Numerical Questions 460 16 SHORT–TERM DECISION MAKING 464 Introduction 465 Decision Making 465 Contribution Analysis 467 Decisions, Decisions 471 Throughput Accounting 477 Break–Even Analysis 479 Contribution Graph 483 Conclusion 485 Discussion Questions 486 Numerical Questions 486 SECTION D: BUSINESS FINANCE 491 17 LONG–TERM DECISION MAKING: CAPITAL INVESTMENT APPRAISAL 493 Introduction 494 Nature of Capital Investment 494 Capital Investment Appraisal Techniques 498 Payback Period 500 Accounting Rate of Return 502 Net Present Value 504 Profitability Index 507 Internal Rate of Return (IRR) 507 Other Factors 512 Conclusion 512 Discussion Questions 513 Numerical Questions 514 Appendix 17.1: Present Value of £1 at Compound Interest Rate (1 + r) 517 18 THE SOURCES OF FINANCE 518 Introduction 519 Nature of Sources of Finance 519 Long–Term Financing 520 Cost of Capital 531 Conclusion 534 Discussion Questions 535 Numerical Questions 536 19 MANAGEMENT OF WORKING CAPITAL 537 Introduction 538 Working Capital 538 Short–Term Financing 541 Conclusion 552 Discussion Questions 552 Numerical Questions 553 Glossary of Key Accounting Terms 555 Appendix: Answers 587 Index 641