I found this textbook and its exercises to be a useful teaching and learning tool. The text includes accurate financial accounting information. The life examples are drawn from companies which are relevant and understandable to students today.

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The approach used by the authors through each chapter is consistent. Upon careful review, I found no apparent or obvious errors were detected in the content. I quite enjoy reading the book and feel the information presented is thoroughly checked and consistently reliable. I’m currently using the latest edition of a textbook from a major publisher. I think the content of this textbook is up-to-date content because it aligns well with the one I am using.

• Do you remember playing a game of pretend with your friends?
• This is only possible if the figures and information are prepared using consistent methods across each year.
• The information contained in the book is accurate and inline with what would be expected from an introduction to financial accounting textbook.
• With this method, the authors drive studentcuriosity and inspire them to ask the “why” questions that get at the heart ofhow accounting works.
• The basics of accounting discussed in this chapter are the same under either set of guidelines.
• This would still not provide a fair presentation of the financial position or financial performance of the entity and, therefore, it is  important that caution is exercised to avoid this as well.

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The content is tailored to provide comprehensive insights into accounting practices and their applications in the business world without perpetuating cultural insensitivity. As we can see from this expanded accounting equation, Assets accounts increase on the debit side and decrease on the credit side. Liabilities increase on the credit side and decrease on the debit side. This becomes easier to understand as you become familiar with the normal balance of an account. The basic components of even the simplest accounting system are accounts and a general ledger.

Fundamental Financial Accounting Concepts,

This concept is important when valuing a transaction for which the dollar value cannot be as clearly determined, as when using the cost principle. Conservatism states that if there is uncertainty in a potential financial estimate, a company should err on the side of caution and report the most conservative amount. This would mean that any uncertain or estimated expenses/losses should be recorded, but uncertain or estimated revenues/gains should not. This gives stakeholders a more reliable view of the company’s financial position and does not overstate income. You also learned that the SEC is an independent federal agency that is charged with protecting the interests of investors, regulating stock markets, and ensuring companies adhere to GAAP requirements.

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For example, we can see this in practice in the published financial statements of large businesses. While the exact values to the single dollar are not communicated, the essential (material) information is provided as an aid to decision making. It is important to note that the principles and concepts of accounting are distinct from the ‘qualitative accounting characteristics’ and this differentiation is clearly set out in the Detailed Study Guide (‘the study guide’).

Normal Balance of an Account

• For examples introduce inventory management ratios in the chapters that deals with inventory.
• We also know that the employment activities performed by an employee of a company are considered an expense, in this case a salary expense.
• Students are often overwhelmed by the amount of information presented in the introductory financial accounting course, while instructors want their students to grasp the big picture of the role financial accounting plays in business.
• Our team of reviewers are established professionals with decades of experience in areas of personal finance and hold many advanced degrees and certifications.
• But, it skips over receivables and payables, which can make it less precise in showing your business’s true financial health.
• We define an asset to be a resource that a company owns that has an economic value.

This rule says expenses and revenues should be recorded in the same period, making sure income statements show true profits or losses. Financial accounting focuses on the reports that managers generate to provide interested external parties a summary of the firm’s financial position and operations. Managerial accounting focuses on the information and the analytical tools and techniques that help managers and employees make the right business decisions.

So, this is not an inaccuracy by the authors, just a point that some instructors may want to know before adopting the textbook. As noted, I like the fact they are introducing accounting information systems which is an important topic. This textbook covers all areas that I would expect to see in an Accounting 1 course. There are many examples presented that make fundamental accounting concepts the material easierfor accounting and non-accounting students to understand. There are also PowerPoint slides that include selected graphics from the text, key concepts and definitions, examples, and discussion questions. The index is an in-depth glossary of terms used throughout the book,, and also states which chapter and subsection the term is used.

Written by True Tamplin, BSc, CEPF®

Learning outcome A1 from the FA2 syllabus is related to ‘The key principles, concepts and characteristics of accounting’. This learning outcome causes difficulties for some candidates. This textbook uses of T-accounts and diagrams to make the concepts become clearer for students. Instructors can rely on up-to-date https://www.bookstime.com/ accounting information, but unlike purchased publisher textbooks, these are not replaced every other year. Any significant accounting changes will be updated and the examples will not be outdated. Principles of Accounting Volume 1 could be presented much more concisely, more simply; and with better clarity.

• If you’re curious about the nitty-gritty of accounting concepts, it’s important to weigh these pros and cons.
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• He is the recipient of the Loudell Ellis Robinson excellence in teaching award.Dr.
• Dr. Edmonds’ research focuses on alternative learning strategies in accounting.
• Excellent book that is comparable to any of the leading financial accounting titles.