Table Of ContentCollege Accounting
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College Accounting
A Practical Approach
CHAPTERS 1–25
Twelfth Edition
Jeffrey Slater
North Shore Community College
Danvers, Massachusetts
Boston Columbus Indianapolis New York San Francisco Upper Saddle River
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To Nanny Shelley
With Love,
Papa Jeff
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Cataloging-in-Publication data.
Slater, Jeffrey
College accounting : a practical approach, chapters 1-25 / Jeffrey Slater. -- 12th ed.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-13-277206-8
1. Accounting. I. Title.
HF5636.S6315 2013
657’.044--dc23
2011049407
10 9 8 7 6 5 4 3 2 1
ISBN 13: 978-0-13-277206-8
ISBN 10: 0-13-277206-X
www.pearsonhighered.com
BRIEF CONTENTS
Preface xix
1
Accounting Concepts and Procedures 1
2
Debits and Credits: Analyzing and Recording Business Transactions 39
3
Beginning the Accounting Cycle 77
4
The Accounting Cycle Continued 1 19
5
The Accounting Cycle Completed 161
6
Banking Procedure and Control of Cash 2 21
7
Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process 2 59
8
Paying, Recording, and Reporting Payroll and Payroll Taxes: The Conclusion
of the Payroll Process 289
9
Sales and Cash Receipts 3 35
10
Purchases and Cash Payments 367
10A
Appendix: Special Journals with Problem Material 413
11
Preparing a Worksheet for a Merchandise Company 4 23
12
Completion of the Accounting Cycle for a Merchandise Company 455
13
Accounting for Bad Debts 497
14
Notes Receivable and Notes Payable 519
15
Accounting for Merchandise Inventory 5 51
16
Accounting for Property, Plant, Equipment, and Intangible Assets 5 91
17
Partnership 621
18
Corporations: Organizations and Stock 651
19
Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings 6 81
20
Corporations and Bonds Payable 711
21
Statement of Cash Flows 7 37
v
vi
BRIEF CONTENTS
22
Analyzing Financial Statements 761
23
The Voucher System 7 93
24
Departmental Accounting 8 15
25
Manufacturing Accounting 835
Glindex I-1
Credits C-1
CONTENTS
Preface xix
1
Accounting Concepts and Procedures 1
Accounting and Business 2
Types of Business Organization 2
Classifying Business Organizations 3
Defi nition of Accounting 3
Difference between Bookkeeping and Accounting 4
Learning Unit 1-1: The Accounting Equation 4
Assets, Liabilities, and Equities 4
Learning Unit 1-2: The Balance Sheet 9
Points to Remember in Preparing a Balance Sheet 9
Learning Unit 1-3: The Accounting Equation Expanded: Revenue, Expenses,
and Withdrawals 11
Revenue 11
Expenses 12
Net Income/Net Loss 12
Withdrawals 12
Expanded Accounting Equation 12
Learning Unit 1-4: Preparing Financial Statements 18
The Income Statement 18
Points to Remember in Preparing an Income Statement 18
The Statement of Owner’s Equity 18
The Balance Sheet 1 9
Main Elements of the Income Statement, the Statement of Owner’s Equity, and the Balance Sheet 2 0
Chapter Assignments
Demonstration Problem 23 • Blueprint: Financial Statements 26 • Accounting Coach 27 • Chapter
Summary 28 • Discussion Questions and Critical Thinking/Ethical Case, Concept Checks, Exercises and
Problems 30 • Financial Report Problem: Reading the Kellogg’s Annual Report 3 6 • Continuing Problem: On
the Job—Sanchez Computer Center 36
SUBWAY CASE: A Fresh Start 37
2
Debits and Credits: Analyzing and Recording Business
Transactions 39
Learning Unit 2-1: The T Account 40
Balancing an Account 40
Learning Unit 2-2: Recording Business Transactions: Debits and Credits 42
T Account Entries for Accounting in the Accounting Equation 42
The Transaction Analysis: Five Steps 44
Applying the Transaction Analysis to Mia Wong’s Law Practice 45
Learning Unit 2-3: The Trial Balance and Preparation of Financial Statements 53
The Trial Balance 54
Preparing Financial Statements 55
vii
viii
CONTENTS
Chapter Assignments
Demonstration Problem Debits and Credits: Analyzing and Recording Business Transactions 59 • Blueprint:
Preparing Financial Statements from a Trial Balance 63 • Accounting Coach 64 • Chapter Summary 65 •
Discussion Questions and Critical Thinking/Ethical Case, Concept Checks, Exercises and Problems 66 • Financial
Report Problem: Reading the Kellogg’s Annual Report 75 • Continuing Problem: On the Job—Sanchez Computer
Center 75
SUBWAY CASE: Debits on the Left . . . 76
3
Beginning the Accounting Cycle 77
Learning Unit 3-1: Analyzing and Recording Business Transactions into a Journal:
Steps 1 and 2 of the Accounting Cycle 78
The General Journal 78
Learning Unit 3-2: Posting to the Ledger: Step 3 of the Accounting Cycle 86
Posting 86
Learning Unit 3-3: Preparing the Trial Balance: Step 4 of the Accounting Cycle 93
What to Do If a Trial Balance Doesn’t Balance 94
Some Common Mistakes 94
Making a Correction Before Posting 94
Making a Correction After Posting 95
Correcting an Entry Posted to the Wrong Account 95
Journalizing Transaction, Posting, and Preparing a Trial Balance 98
Chapter Assignments
Demonstration Problem: Journalizing Transaction, Posting, and Preparing a Trial Balance 98 • Blueprint of
First Four Steps of Accounting Cycle 102 • Accounting Coach 103 • Chapter Summary 104 •
Discussion Questions and Critical Thinking/Ethical Case, Concept Checks, Exercises and Problems 106 •
Financial Report Problem: Reading the Kellogg’s Annual Report 115 • Continuing Problem: On the Job—
Sanchez Computer Center 115
PEACHTREE COMPUTER WORKSHOP:
Computerized Accounting Application for Chapter 3 118
QUICKBOOKS COMPUTER WORKSHOP:
Computerized Accounting Application for Chapter 3 118
4
The Accounting Cycle Continued 119
Learning Unit 4-1: Step 5 of the Accounting Cycle: Preparing a Worksheet 120
The Trial Balance Section 120
The Adjustments Section 120
The Adjusted Trial Balance Section 128
The Income Statement Section 128
The Balance Sheet Section 131
Learning Unit 4-2: Step 6 of the Accounting Cycle: Preparing the Financial
Statements from the Worksheet 136
Preparing the Income Statement 136
Preparing the Statement of Owner’s Equity 138
Preparing the Balance Sheet 138
Chapter Assignments
Demonstration Problem: Preparing a Worksheet and Financial Statements 141 • Blueprint of Steps 5 and
6 of the Accounting Cycle 146 • Accounting Coach 147 • Chapter Summary 148 • Discussion
Questions and Critical Thinking/Ethical Case, Concept Checks, Exercises and Problems 149 • Financial Report
Problem: Reading the Kellogg’s Annual Report 158 • Continuing Problem: On the Job—Sanchez Computer
Center 158
SUBWAY CASE: Where the Dough Goes . . . 159
ix
CONTENTS
PEACHTREE COMPUTER WORKSHOP:
Computerized Accounting Application for Chapter 4 160
QUICKBOOKS COMPUTER WORKSHOP:
Computerized Accounting Application for Chapter 4 160
5
The Accounting Cycle Completed 161
Learning Unit 5-1: Journalizing and Posting Adjusting Entries: Step 7 of the
Accounting Cycle 162
Recording Journal Entries from the Worksheet 162
Learning Unit 5-2: Journalizing and Posting Closing Entries: Step 8 of the
Accounting Cycle 166
How to Journalize Closing Entries 166
Learning Unit 5-3: The Post-Closing Trial Balance: Step 9 of the Accounting Cycle
and the Cycle Reviewed 176
Chapter Assignments
Demonstration Problem 179 • Blueprint of Closing Process from the Worksheet 189 • Accounting
Coach 190 • Chapter Summary 191 • Discussion Questions and Critical Thinking/Ethical Case,
Concept Checks, Exercises and Problems 192 • Financial Report Problem: Reading the Kellogg’s Annual
Report 202 • Continuing Problem: On the Job—Sanchez Computer Center 202
S UBWAY CASE: Closing Time 203
PEACHTREE COMPUTER WORKSHOP:
Computerized Accounting Application for Chapter 5 219
QUICKBOOKS COMPUTER WORKSHOP:
Computerized Accounting Application for Chapter 5 220
6
Banking Procedure and Control of Cash 221
Learning Unit 6-1: Bank Procedures, Checking Accounts, and Bank
Reconciliation 222
Opening a Checking Account 222
Check Endorsement 223
The Checkbook 226
Monthly Recordkeeping: The Bank’s Statement of Account and In-Company Records 228
The Bank Reconciliation Process 228
Trends in Banking 231
Learning Unit 6-2: The Establishment of Petty Cash and Change Funds 236
Setting Up the Petty Cash Fund 236
Making Payments from the Petty Cash Fund 237
How to Replenish the Petty Cash Fund 239
Setting Up a Change Fund and Insight into Cash Short and Over 241
Chapter Assignments
Blueprint: A Bank Reconciliation 244 • Accounting Coach 245 • Chapter Summary 246 •
Discussion Questions and Critical Thinking/Ethical Case, Concept Checks, Exercises and Problems 248 •
Financial Report Problem: Reading the Kellogg’s Annual Report 253 • Continuing Problem: On the Job—
Sanchez Computer Center 253
SUBWAY CASE: Counting Down the Cash 256
