This edition’s revisions are driven by feedback from instructors and students. Many of the 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:

• Revised and updated assignments throughout
• New chapter-opening content and layout
• Updated ratio analyses for each chapter
• New material on International Financial Reporting Standards (IFRSs) in most chapters
• New and revised entrepreneurial elements
• New assignments using chapter openers
• Revised serial problem through nearly all chapters
• New art program, visual graphics, and text layout
• New Best Buy Annual Report with comparisons to Circuit City, RadioShack, Apple, and DSG (UK)
• New assignments using Best Buy, Circuit City, RadioShack, and DSG
• New graphics added to each chapter’s analysis section
• New iPod content integrated and referenced in book

Chapter 1

• Life is Good NEW Opener with new entrepreneurial assignment
• Revised section on accounting principles and assumptions
• New visual layout on building blocks for GAAP
• New graphic listing recent publicized account scandals
• Transaction analysis with expanded accounting equation
• Updated compensation data in exhibit
• New discussion of conceptual framework linked to IFRSs
• Updated graph for Virtuous Returns Decision Insight box
• Decision Analysis: return on assets updated with new data

Chapter 2

• SPANX NEW Opener with new entrepreneurial assignment
• New 4-step process to learn accounting for transactions: Identify, Analyze, Record, and Post
• New sequential art layout for visualizing transaction accounting
• New arrow lines link journal entries to the ledger
• New material on financial statements related to IFRSs
• Decision Analysis: debt ratio updated with new data and graphic

Chapter 3

• PopCap Games NEW Opener with new entrepreneurial assignment
• New 3-step process for accounting adjustments: (1) Determine what is, (2) Determine what should be, (3) Record adjustment
• New summary tables show the accounting adjustment AND account balances before and after adjustment
• New adjustments tables for prepaid expenses, including insurance, supplies and depreciation
• New adjustments table for unearned revenue
• New adjustments table for accrued expenses
• New adjustments table for accrued revenues
• Decision Analysis: profit margin updated with new data

Chapter 4

• Kathryn Kerrigan NEW Opener with new entrepreneurial assignment
• New graphic for learning the 4-step closing process
• New graphic to aid learning of accounting cycle
• Streamlined presentation of classified balance sheet
• Decision Analysis: current ratio updated with new data and graphic

Chapter 5

• BigBadToyStore NEW Opener with new entrepreneurial assignment
• Enhanced discussions on purchase allowances and purchase returns
• Revised discussions on sales returns and sales allowances
• Streamlined 4-step process for merchandisers’ closing entries
• New material on income statement formats for U.S. GAAP vis-à-vis IFRSs
• Decision Analysis: acid-test and gross margin updated with new data and graphics

Chapter 6

• Beauty Encounter NEW Opener with new entrepreneurial assignment
• Specific Identification explanation revised for additional clarity
• New explanation added to First-in, First-Out
• Enhanced explanation to Last-in, First-Out
• New explanation of weighted average
• Enhanced explanations for LCM
• New material on inventory methods for U.S. GAAP vis-à-vis IFRSs
• Illustration of inventory errors is revised and enhanced
• Revised exhibit on inventory errors for balance sheet
• Decision Analysis: inventory turnover and days’ sales in inventory updated with new data and graphics
• Appendix 6A, enhanced discussion of periodic inventory
• Appendix 6A, expanded explanations of periodic FIFO, LIFO, and weighted average

Chapter 7

• TerraCycle NEW Opener with new entrepreneurial assignment
• Enhanced exhibits for special journals and ledgers
• New explanations for controlling and subsidiary ledgers
• Updated discussion of enterprise resource planning
• Decision Analysis: segment return on assets updated with new data and graphic

Chapter 8

• Dylan’s Candy Bar NEW Opener with new entrepreneurial assignment
• New material added on Sarbanes-Oxley and controls required
• New section on cash management
• Additional description of electronic funds transfer
• Enhanced explanation of bank reconciliation
• Added new assignments on bank reconciliations
• New discussion of internal controls for IFRS conversion
• Decision Analysis: days’ sales uncollected updated with new data and graphic

Chapter 9

• Under Armour NEW Opener with new entrepreneurial assignment
• Reorganized sections on valuing accounts receivable
• Enhanced explanation of recovering a bad debt
• New material on assessing the direct write-off method
• Reorganized section on estimating bad debts using percent of receivables
• New enhanced summary Exhibit 9.13 on methods to estimate bad debts
• Added new exercises on bad debts estimation
• Decision Analysis: accounts receivable turnover updated with new data and graphic

Chapter 10

• Sambazon NEW Opener with new entrepreneurial assignment
• Updated all real world examples and graphics including those for Tootsie Roll, Kimberly-Clark, and Dale Jarrett Racing
• Enhanced explanations on declining-balance and impairments
• New description of ordinary repairs and its journal entry
• Reorganized discussion of betterments and extraordinary repairs
• New material on depreciation estimates for U.S. GAAP vis-à-vis IFRSs
• Enhanced illustration for depletion including journal entry
• Reorganized section on types of intangibles
• Enhanced material related to franchises, licenses, trademarks and other intangibles
• Decision Analysis: total asset turnover updated with new data and graphic
• Enhanced explanation of exchanging plant assets

Chapter 11

• Feed Granola Company NEW Opener with new entrepreneurial assignment
• Updated real world examples including those for Univision, Six Flags, AMF, and K2
• New material on contingent liabilities for U.S. GAAP vis-à-vis IFRSs
• Enhanced discussion of unearned revenues including Jon Bon Jovi ticket example
• Updated tax illustrations and assignments using the most recent rates
• Decision Analysis: times interest earned updated with new data and graphic
• New section on “Who Pays What Payroll Taxes and Benefits”

Chapter 12

• Samanta Shoes NEW Opener with new entrepreneurial assignment
• Updated real world examples including those for Macadamia Orchards and Big River Productions
• New example of partnership accounting using Trump Entertainment Resorts
• Streamlined explanation of partnership liquidation

Chapter 13

• Inogen NEW Opener with new entrepreneurial assignment
• New info graphic on subcategories of authorized stock
• Updated many real world examples
• New info graphic on stock splits
• New material on preferred stock classification for U.S. GAAP vis-à-vis IFRSs
• Additional explanation on closing process for corporations
• Updated statement of stockholders’ equity using Apple
• Decision Analysis: updated with new data including that for Amazon and Altria

Chapter 14

• Rap Snacks NEW Opener with new entrepreneurial assignment
• Enhanced graphic and explanation of determining bond discount and premium
• Revised bond illustration to use a 4-period bond
• Streamlined bond illustration to show entire amortization process from issuance to majority
• Decision Analysis: debt features and debt-to-equity ratio updated with new data and graphics
• Streamlined bond illustration for effective interest amortization
• New material on bond interest computation for U.S. GAAP vis-à-vis IFRSs
• Added new assignments that require accounting for bonds given an amortization table

Chapter 15

• Tibi NEW Opener with new entrepreneurial assignment
• Updated real world examples and graphics including those for Gap, Pfizer, Starbucks, and Brunswick
• Enhanced summary graphic on accounting for securities
• Updated discussion related to FAS 157 and 159
• New material on consolidation per U.S. GAAP vis-à-vis IFRSs
• Decision Analysis: components of return on assets updated with new data and graphic

Chapter 16

• Jungle Jim’s NEW Opener with new entrepreneurial assignment
• Updated graphics for operating, investing and financing cash flows
• Enhanced steps 1 through 5 for preparing the statement of cash flows
• Simplified summary Exhibit 16.12 for indirect adjustments
• Updated real world examples and graphics including that for Gap, Harley, Starbucks, and Nike
• Decision Analysis: cash flow on assets updated with new data
• New info on indirect vs direct method for U.S. GAAP vis-à-vis IFRSs

Chapter 17

• Motley Fool Updated Opener with new entrepreneurial assignment
• New Best Buy, Circuit City and RadioShack data throughout chapter, exhibits, and illustrations
• Enhanced presentation on comparative financial statements
• New comparative analyses on Best Buy versus Circuit City and RadioShack
• RadioShack added to ratio analysis of Best Buy vs Circuit City

Chapter 18

• Kernel Season’s NEW Opener with new entrepreneurial assignment
• New section on fraud and the role of ethics in managerial accounting
• Enhanced discussion on implications of fraud for managerial accounting
• Added discussion of Institute of Management Accountants and its road-map for resolving ethical dilemmas
• Updated real-world examples including that for Apple
• Added balance sheet to exhibits that show cost flows across accounting reports
• New discussion on role of nonfinancial information

Chapter 19

• Sprinturf NEW Opener with new entrepreneurial assignment
• New info on custom design involving Nike
• Enhanced exhibit on job order production activities
• Added discussion linking accurate overhead application for jobs to both product pricing and performance evaluation
• Streamlined explanation of closing over- and underapplied overhead
• New discussion of employee payroll fraud schemes

Chapter 20

• Hood River Juice Company NEW Opener with new entrepreneurial assignment
• New discussion on impact of automation for quality control and overhead application
• Added explanation for use of a process cost summary in product pricing
• New Website link to manufacturing process video for Penn tennis balls

Chapter 21

• RockBottomGolf.com NEW Opener with new entrepreneurial assignment
• Enhanced explanation of evaluating investment center performance with financial measures
• New discussion of residual income
• Added explanation of economic value added
• New section on evaluating investment center performance with nonfinancial measures including balanced scorecard
• New Appendix 21A on transfer pricing
• Decision Analysis: new explanation of investment center profit margin and investment turnover
• New assignments on investment center performance evaluation and transfer pricing

Chapter 22

• Moe’s Southwest Grill NEW Opener with new entrepreneurial assignment
• New section on working with changes in estimates in CVP analysis
• New graphics illustrating how changes in estimates impact break-even analysis
• New discussion on weighted average contribution margin in multiple product CVP analysis
• New Appendix 22A on using Excel to estimate least squares regression
• New assignments on break-even and changes in estimates

Chapter 23

• Jibbitz NEW Opener with new entrepreneurial assignment
• Enhanced discussion of master budgets
• New assignments on preparing budgets and budgeted financial statements

Chapter 24

• Martin Guitar NEW Opener with new entrepreneurial assignment
• Revised selected exhibits with variance formulas
• Reorganized discussion of overhead variance analysis
• Revised graphics on framework for understanding overhead variances
• New discussion of increased automation for overhead application
• Revised explanation of journal entries for standard costing
• Simplified discussion of closing variance accounts
• Decision Analysis: enhanced discussion of sales variances
• New assignments on variance analysis
• Added journal entries to chapter demonstration problem

Chapter 25

• Prairie Sticks Bat Company NEW Opener with new entrepreneurial assignment
• New info graphic on cost of capital estimates across industries
• Added discussion and example on use of profitability index to compare projects
• New discussion on incorporating inflation in net present value calculations
• Added explanation on conflicts between meeting analysts’ forecasts and choosing profitable long-term projects
• New Appendix 25A on using Excel to compute net present value and internal rate of return
• New assignments on profitability index