This edition’s revisions respond to feedback from both instructors and students. Many of these revisions are summarized here. Feedback suggests that this is the book instructors want to teach from and students want to learn from. General revisions include:

• New multiple choice questions at each chapter-end
• Revised and updated assignments throughout
• New chapter-opening content and layout
• Updated ratio analyses for each chapter
• New and revised entrepreneurial elements
• New assignments using chapter openers
• Revised serial problem through nearly all chapters
• New Circuit City annual report with comparisons to Best Buy, Dixons (UK), and the industry
• New assignments using Best Buy, Circuit City, and Dixons
• New Apple financial statements and assignments
• New Sarbanes-Oxley coverage in each chapter

Chapter 1:

• Life is good NEW opener with new entrepreneurial assignment
• Early introduction to financial statements
• Enhanced transaction analysis using expanded accounting equation
• New Sarbanes-Oxley material on frauds such as Tyco and WorldCom
• Revised illustration and assignments on ethics
• New insight on principles-based accounting
• New evidence on small businesses
• Enhanced materials on Sarbanes-Oxley
• New multiple choice questions

Chapter 2:

• Cake Love NEW opener with new entrepreneurial assignment
• Enhanced introduction to asset accounts
• Streamlined introduction to double-entry accounting
• New color layout for transaction analysis
• New insight on women entrepreneurs
• Revised insight on unearned revenues
• New insight on manager pay under Sarbanes-Oxley

Chapter 3:

• Betty Rides NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on accounting adjustments
• New graphics for prepaid expenses
• New graphic for unearned revenues
• New insight on gift card sales as unearned revenues
• New illustration of accrued revenues
• Revised exhibit on accounting adjustments
• Enhanced assignments for adjusting entries and ethics
• Streamlined exhibit for closing entries

Chapter 4:

• Big-Bad-Toy-Store NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on invoice controls
• Enhanced illustration of operating cycle
• Revised exhibit on closing entries
• Streamlined multi-step income statement
• Merchandiser work sheet in appendix

Chapter 5:

• Surf Diva NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on inventory controls
• Improved exhibit on cost flow assumptions
• Updated exhibit on inventory methods
• Enhanced exhibit on lower of cost or market
• Revised serial problem to include LCM

Chapter 6:

• Raising Cane’s Chicken Fingers NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on internal controls
• New material on e-commerce, its risks, its controls, and identity theft
• New insight on credit card fraud
• New illustration on “Hacker” risks
• New diagram on controls for over-the-counter cash receipts
• Updated data on Internet frauds
• New information on check fraud
• New data on fees for bank services

Chapter 7:

• Linditas’ NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on allowance estimates
• New explanation of credit and debit cards
• Simplified estimation of uncollectibles
• New data on PayPal and credit card growth
• Enhanced exhibit on aging of receivables
• New data on bad debt percentages
• Enhanced exhibit on computing maturity date

Chapter 8:

• Fairytale Brownies NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on asset controls
• Revised exhibit on plant asset disposals
• Updated data on depreciation methods used
• Moved plant asset exchanges to appendix
• Updated for new standard on asset exchanges
• New assignments on asset disposals, goodwill, and intangibles

Chapter 9:

• Wildflower Linen NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on liability limits
• New insight on gift card liabilities
• Updated IRS tax forms
• Updated IRS withholding table
• New insight on guaranteed salary liabilities
• New insight on extended-warranty contracts
• Applied 2006 payroll tax rates throughout New diagram for contingent liabilities

Chapter 10:

• Rap Snacks NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on hidden debt
• Enhanced exhibit on bond interest computation and journal entry
• Moved discussion of debt features to the decision analysis section
• Streamlined bond-issuing procedures
• Moved 'issuing bonds between interest dates' to appendix
• Streamlined installment notes
• New ratio analysis on debt-to-equity

Chapter 11:

• Garrison Guitars NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on accounting quality
• Enhanced graphic on equity composition
• 'Paid-in capital' used in lieu of 'contributed capital'
• Moved section on dividends before preferred stock
• Streamlined computation of weighted-average shares
• Updated and streamlined stock options
• New assignments on stock, EPS, and ethics
• Moved discontinued and extraordinary items to Ch. 13

Chapter 12:

• Ashtae Products NEW opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on cash quality
• New diagram on cash effects of changes in current assets and liabilities
• Enhanced exhibit on summary adjustments for indirect method
• New insight on measuring free cash flow

Chapter 13:

• The Motley Fool REVISED opener with new entrepreneurial assignment
• Sarbanes-Oxley insight on disclosure quality
• New horizontal and vertical analysis using Best Buy
• Enhanced common-size analysis of Circuit City and Best Buy
• New ratio analysis of Best Buy and Circuit City
• New debt-to-equity analysis
• New appendix on “sustainable income,” with new standard for accounting changes
• Streamlined intro to comprehensive income