In response to the feedback and guidance from numerous financial accounting faculty, Fundamentals of Financial Accounting, 3e includes several important new changes, including new chapter openers, 140 new end-of-chapter assignments and refinements and updates to over 400 remaining questions, exercises, problems, and cases. Several new features are introduced this edition, including Spotlight features (see page x), Homework Helper, multi-perspective discussion questions, continuing cases, comprehensive problems, and questions, exercises, and problems that specifically relate to IFRS, the global economic crisis, and XBRL.

CHAPTER 1

Focus Company: Pizza Aroma, Inc.

• Revised conceptual framework discussion
• Introduction of IFRS
• New ethical conduct discussion

CHAPTER 2

New Focus Company: Pizza Aroma, Inc.

• New visuals to demonstrate transaction analysis steps
• IFRS spotlight on transaction analysis and the role of principles versus rules
• New discussion of surviving the credit crisis with a strong balance sheet
• Introduction of the current ratio

CHAPTER 3

New Focus Company: Pizza Aroma, Inc.

• New visual to demonstrate operating cycle transactions
• New Spotlight on Ethics video explaining Computer
• Associates' violation of the time period assumption

CHAPTER 4

New Focus Company: Pizza Aroma, Inc.

• New visuals to illustrate the analyses required in making adjustments
• New Spotlight on Financial Reporting video depicting Circuit City's slide into bankruptcy

CHAPTER 5

Focus Company: Activision Blizzard

• New Spotlight on Business Decisions explaining accounting's role in the Treasury Department's stress test for banks
• New Self-Study Practice on financial statement articulation
• New Spotlight on Financial Reporting introducing XBRL
• New section on financial statement presentation under GAAP and IFRS
• New financial statement analyses including two U.S.
• companies and one European competitor
• New section explaining how transactions affect ratios

CHAPTER 6

Focus Company: Wal-Mart

• New section and visuals applying control principles to cash transactions
• Revised Spotlight on Controls to reference granny fraud video
• Inventory purchasing moved to Chapter 7

CHAPTER 7

New Focus Company: American Eagle Outfitters

• New chapter opener
• 2 new Self-Study Practice features
• New visuals to demonstrate and contrast inventory costing methods
• New Spotlight on IFRS and Spotlight on Ethics (with video) describing an inventory valuation fraud at DHB Industries
• Three chapter supplements are included to demonstrate inventory costing in a perpetual system (A), explain inventory error effects (B), and contrast inventory recording under periodic and perpetual systems (C).

CHAPTER 8

Focus Company: Skechers

• New Spotlight on Business Decisions depicting the significance of bad debts to Target's decision to grant credit to individual consumers during difficult economic times
• Percentage of sales moved from chapter supplement to body of chapter
• New Spotlights on using an aging schedule to focus collection efforts and on comparing stated credit terms to turnover analyses
• New video to support Spotlight discussing a credit manager's accounting fraud at MCI

CHAPTER 9

Focus Company: Cedar Fair

• Partial year depreciation is now integrated into the chapter
• 2 new Spotlights discussing IFRS's accounting for component costs, R&D, and fair value

CHAPTER 10

Focus Company: General Mills

• New section highlighting the vital role of liabilities in financing a business
• New visuals and discussion of payroll, new visuals to demonstrate bond amortization
• New Spotlight on bond pricing
• New Spotlight on IFRS thresholds for recording contingent liabilities
• New section on the quick ratio
• New Spotlight on surviving a financial crunch

CHAPTER 11

New Focus Company: National Beverage

• New Spotlights on dividend cuts and choosing between stock dividends and stock splits
• New Spotlight on preferred stock classification

CHAPTER 12

New Focus Company: Under Armour

• New Spotlights contrasting cash flows and net income for W. T. Grant and Lehman Brothers
• New Spotlight contrasting classification of dividends and interest under GAAP and IFRS
• New illustrations contrasting indirect and direct methods using Under Armour's financials
• Direct method detailed discussion moved to last topic in chapter's body

CHAPTER 13

New Focus Company: Lowe's

• More prominent placement for vertical analysis
• New Spotlight comparing Lowe's GAAP accounting policies with the IFRS accounting policies of Europe's largest home improvement retailer (Kingfisher)

APPENDIX A

New Focus Company: The Home Depot

We selected Home Depot as the new focus company because its operations are familiar to students, its financial statements are relatively straightforward, and it reveals the impact of a financial downturn (while still reporting a profit, which helps to avoid potentially confusing ratios).

APPENDIX B

New Focus Company: Lowe's

New focus company selected; in terms of operations, geography, and size, Lowe's is a close competitor to The Home Depot.

APPENDIX C

New graphic to show the power of compounding, new section demonstrating present value computations using Excel

APPENDIX D

New Focus Company: Washington Post

The introduction and appendix outline are presented in the body of the text, while the detailed discussions and illustrations are available for download from the textbook's Online Learning Center www.mhhe.com/phillips3e