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Accounting For Dummies, 7th Edition

Name: Accounting For Dummies, 7th Edition
ISBN: 9781119837527

by John A. Tracy, Tage C. Tracy

January 2022

Beginner

448 pages

13h 37m

English

For Dummies

Audiobook available

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Cover
Title Page
Copyright
Introduction
About This BookFoolish AssumptionsIcons Used in This BookBeyond the BookWhere to Go from Here
Part 1: Opening the Books on Accounting
Chapter 1: Accounting in Today’s New Economy
Checking Your Preconceptions about AccountingProviding Vital Financial InformationAccounting’s Two Primary RolesTaking a Peek behind the ScenesFocusing on TransactionsTaking the Financial Pulse of a BusinessAccounting as a Form of Art
Chapter 2: Introducing Financial Statements
Setting the Stage for Financial StatementsThe Income StatementThe Balance SheetThe Statement of Cash FlowsA Note about the Statement of Changes in Shareowners’ EquityGleaning Important Information from Financial StatementsComplying with Accounting and Financial Reporting Standards
Chapter 3: Safeguarding Company Assets
Separating the Duties of Bookkeepers and AccountantsPedaling through the Bookkeeping CycleManaging Accounting SystemsEnforcing Strong Internal ControlsDouble-Entry AccountingJuggling the Books to Conceal Embezzlement and Fraud
Chapter 4: Accounting in the Digital Age
Noting a Few Foundational Accounting Concepts Related to TechnologyUsing Accounting Software in the Cloud and on the GroundControlling and Protecting Money Flows in the Electronic AgeManaging the Accounting Function in the On-Demand World
Chapter 5: Recognizing the Legal and Accounting Entity
Being Aware of the Legal Roots of Business EntitiesGoing It Alone: Sole ProprietorshipsDifferentiating Partnerships and Limited Liability CompaniesIncorporating a Business
Part 2: Exploring Financial Statements

Chapter 6: Reporting Profit or Loss in the Income Statement
Presenting Typical Income StatementsTaking Care of Housekeeping DetailsBeing an Active ReaderDeconstructing ProfitPinpointing the Assets and Liabilities Used to Record Revenue and ExpensesReporting Unusual Gains and LossesWatching for Misconceptions and Misleading Reports
Chapter 7: Reporting Financial Condition in the Balance Sheet
Expanding the Accounting EquationPresenting a Proper Balance SheetJudging Liquidity and SolvencyUnderstanding That Transactions Drive the Balance SheetSizing Up Assets and LiabilitiesFinancing a Business: Sources of Cash and CapitalRecognizing the Hodgepodge of Values Reported in a Balance Sheet
Chapter 8: Reporting Cash Sources and Uses in the Statement of Cash Flows
Meeting the Statement of Cash FlowsExplaining the Variance between Cash Flow and Net IncomeSailing through the Rest of the Statement of Cash FlowsPinning Down “Free Cash Flow”Limitations of the Statement of Cash Flows
Chapter 9: Financial Accounting Issues
Reporting Changes in Owners’ EquityRecognizing Reasons for Accounting DifferencesLooking at a More Conservative Version of the Company’s Income StatementExplaining DifferencesCalculating Cost of Goods Sold Expense and Inventory CostRecording Depreciation ExpenseScanning the Revenue and Expense Radar ScreenUsing the Statement of Cash Flows as an Audit/Sanity Test
Part 3: Understanding Financial Reports, Financial Statements, and Financial Information
Chapter 10: Producing Financial Reports
Quickly Reviewing the Theory of Financial ReportingRecognizing Top Management’s RoleKeeping Current with Financial Accounting and Reporting StandardsMaking Sure Disclosure Is AdequatePutting a Spin on the Numbers (Short of Cooking the Books)Comparing Public and Private CompaniesDealing with Information Overload
Chapter 11: Deciphering a Financial Report
Knowing the Rules of the GameMaking Investment ChoicesContrasting Reading Financial Reports of Private Versus Public BusinessesExplaining the Role of MDORs and MD&AsFrolicking through the FootnotesChecking Out the Auditor’s Report
Chapter 12: Analyzing Financial Information with Ratios
Understanding the Importance of Using Ratios to Digest Financial StatementsImproving Your Knowledge of Financial Language and LingoStarting with Sample Company Financial StatementsBenchmark Financial Ratios: Financial Strength and SolvencyBenchmark Financial Ratios: Financial PerformanceMaking Time for Additional Ratios (If Needed)
Chapter 13: Generating Internal Financial Information for Management Use
Building on the Foundation of the External Financial StatementsDistinguishing Internal and External Financial StatementsGathering Financial Condition InformationCulling Profit InformationAvoiding Rookie Mistakes
Chapter 14: Applying Wall Street’s Tricks and Treats to Engineer Financial Results
Knowing What Financial Engineering Is NotDefining What Financial Engineering IsIdentifying Commonly Used “Tricks of the Trade”Manufacturing Imaginary Profits (and, Yes, Losses)Looking Out for Particular Trends and Terminology
Part 4: Leveraging Accounting in Managing a Business
Chapter 15: Analyzing Profit
Helping Managers: The Fourth Pillar of AccountingInternal Profit ReportingLooking at Strategic Profit AnalysisTaking a Closer Look at the Lines in the Profit TemplateUsing the Profit Template for Decision-Making AnalysisTucking Away Some Valuable Lessons
Chapter 16: Accounting for Costs
Looking Down the Road to the Destination of CostsAre Costs Really That Important?Becoming More Familiar with CostsAssembling the Product Cost of ManufacturersPuffing Profit by Excessive Production
Chapter 17: Preparing Best-in-Class Forecasts, Projections, and Budgets
Focusing on Key Forecasting ConceptsPutting Forecasting in Its PlaceExploring ForecastingIncreasing the Power of Your ForecastsSeeing a Financial Forecast in ActionRehashing the Value of Forecasts
Chapter 18: Capitalizing a Business: How, When, Why, and What
Identifying the Elements of a Business PlanValuing Businesses: A Crash Course in the BasicsSurveying Commonly Used Business Valuation TechniquesSummarizing the Two Basic Types of Available CapitalTaking a Deeper Dive into Raising Debt CapitalDigging Further into the World of Equity CapitalRaising Capital: Tips, Tidbits, and Traps
Part 5: The Part of Tens
Chapter 19: Ten Tips for Managers
Reach Breakeven and Then Rake in ProfitSet Sales Prices RightDon’t Confuse Profit and Cash FlowCall the Shots on Accounting PoliciesPrepare Accurate Forecasts and ProjectionsDemand the Accounting Information You WantTap into Your CPA’s ExpertiseCritically Review Your Controls over Employee Dishonesty and FraudLend a Hand in Preparing Your Financial ReportsSpeak about Your Financial Statements as a Pro
Chapter 20: Ten Tips for Reading a Financial Report
Get in the Right Frame of MindDecide What to ReadImprove Your Accounting SavvyJudge Profit PerformanceTest Earnings Per Share (EPS) against Change in Bottom LineTackle Unusual Gains and LossesCheck Cash Flow from ProfitLook for Signs of Financial DistressRecognize the Possibility of Restatement and FraudRemember the Limits of Financial Reports
Index
About the Authors
Connect with Dummies
End User License Agreement

Content preview from Accounting For Dummies, 7th Edition

Part 2

Exploring Financial Statements

IN THIS PART …

Get to know the ins and outs of the income statement, which summarizes the profit-making activities of the business and its bottom-line profit or loss for the period.

Understand how the balance sheet reports the financial condition of the business at a point in time — specifically on the last day of the profit period.

Expand your knowledge of what’s included in the statement of cash flows, which reports the amount of cash produced from profits or consumed from losses, and how businesses identify and secure other sources of cash during the period and what the business did with this money (that is, what they used the cash for).

Make sure you’re up to speed on the topic of adequate disclosure in external financial reports to the creditors and investors of a business. Business financial reports should reveal all the information that the creditors and investors are entitled to know.

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Accounting For Dummies, 7th Edition

by John A. Tracy, Tage C. Tracy

Exploring Financial Statements

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.