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All the instructions Will be included in the files attached

Quickbooks registration

We will begin using QuickBooks soon. It is free for you to register and use as a student.
Please follow the directions in the attached document CAREFULLY.
You will be creating a company, the name of your company must be YOUR NAME, for example, mine would be “Rebecca Trotter”. I should see your name in my QuickBooks, to receive a grade.
Note that you will make me your accountant using this email address: [email protected]

Both of these are stated in the attached directions, I just wanted to point them out to you.

*You must enter your address to register, feel free to use your DBU address or other address if you do not feel comfortable using your real address.
After you complete the directions, you can look around. But, please do not create any transactions at this point.

Open the link:

https://www.intuit.com/partners/education-program/products/quickbooks/student-qbo-signup/
>>> Fill out the information asked (Complete Registration information. Please use this information: Dallas Baptist University, 4 year college, Accounting Systems) and click submit.

Next, you will need to upload something to prove you are a student. Log in to Web Advisor and take a screenshot of your student schedule. Attach any documents necessary and click “Submit for review”.

Wait for an email of approval like this one (check your spam mail if you don’t receive it with in 30 min):

Click on the link and enter your license number and product number. Read and agree to terms of service and click “Set Up Account.”[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this text box anywhere on the page, just drag it.]

Enter your information and click “Create Account.”

ENTER YOUR NAME as your company name and choose less than 1 year. And Click “Next.”

At the next window, just choose “ALL SET.”
Choose your role at our business to be “Owner” & Choose me to be your accountant so that I can assess your progress and help you as needed. At this window click “My Accountant” – see below on the lefthand side of the screen.

At the next window, enter THIS email address: [email protected] and click invite

That’s it, you are done!

Note: some screens might have slightly changed versions from the screenshots posted below. Please remember that reading directions and following them carefully is important. You will be counted off for any directions not followed. Remember QB updates their website very often so a few of the screen shots might be in a different format by the time this QB project is assigned, but all steps should be similar.
Part A –
You will work through the journal entries from Problem 3-1 from your textbook:
1. Login to your Quickbooks company.
2. The first thing you will do is set up the accounts in P3-1, part a.
3. Click on “Accounting” in the menu on the left. And See your Chart of Accounts.
4. Then click on “New” at the top right.

5. There are default accounts. But, let’s use the same accounts as the book. Begin creating the first account listed in part (a) – Cash. Use your accounting knowledge to set these up. For example, cash will be a bank account.
a.

6. Click Save and Close
7. Continue with the other accounts. Use your accounting knowledge to set up the accounts. Note: for income summary – this is an equity account. There is not a good Detail Type to use for it… use Accumulated Adjustment.
8. Now you will book your journal entries. Click on the + sign at the top right and choose Journal Entry. All entries are in 2020.
a.

9. For example, your first journal will look like this:
a.

b. Be sure to use the correct date, accounts, dollar amount, and type in the description from the book. Then click Save and New.
c. Note that on Sept. 2nd, when you use A/P you will have to create a new vendor. Quickbooks allows you to do this as you do the JE. Click on the dropdown box at the far right under Name. Choose Add New. Complete the information. See below…
i.

ii. Later – when you use A/R, create a customer named “various”.
10. You will not close the accounts (quickbooks automatically closes them).
Part A Submission –
1. Submit the following reports **Export each report and save them as PDFs, your name and then the name of the report, then A (for part A). For example: JohnDoeAccountListA. You will be counted off points if you do not name your documents correctly**:
a. All reports are for the period 9/1– 9/30
b. To export (there is a button in the top right corner)
2. Go to reports > located on the left-hand side
a. Account list
b. Profit and Loss (Income Statement)
c. Balance Sheet
d. Journal
3. Now go to Who Owes You
a. Accounts Receivable Aging Summary
4. Now go to What You Owe
a. Accounts Payable Aging Summary

Part B –
1. As a continuation of the above business, record the following journal entries for October 2020. Note that you may have to create new accounts for some transactions.
a. 10/5 Purchased Office Supplies on account from Office Depot , $250
b. 10/8 Bill patients $1,000 for services performed.
c. 10/8 Pay Rent $680.
d. 10/20 Pay Salaries and Wages, $500
e. 10/25 Pay Utilities, $150
f. 10/31 Purchase land with a long-term notes payable, $10,000
g. 10/31 Collect $3,000 from patients on account.
h. 10/31 Count of office supplies reflect $600 balance.
Part B Submission –
1. Submit the following reports **Export each report and save them as PDFs, your name and then the name of the report, then B (for part B). For example: JohnDoeAccountListB. **:
a. All reports are for the October 2020 reporting period
b. Export (there is a button in the top right corner)
2. Go to report
a. Account list
b. Profit and Loss (Income Statement)
c. Balance Sheet
d. Journal
3. Now go to Who Owes You
a. Accounts Receivable Aging Summary
4. Now go to What You Owe
a. Accounts Payable Aging Summary

*** To submit your project please make sure to ZIP all of your files into one file folder. And then upload the folder to the link in Blackboard> Course Materials.***

[email protected]

Pass:

GoogleAccount25*

When you try login in they’ll send a code to a gmail which can be found in the samething email as the one provided above. The password is also the same also same password

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Intermediate Accounting

17th Edition

D o n a l D E . K i E s o P h D , C Pa
Northern Illinois University

DeKalb, Illinois

J E r r y J . W E y g a n D t P h D , C Pa
University of Wisconsin—Madison

Madison, Wisconsin

t E r r y D . W a r f i E l D , P h D
University of Wisconsin—Madison

Madison, Wisconsin

Director anD Vice PresiDent Michael McDonald
senior acquisitions eDitor emily Marcoux
ProDuct Designer Lindsey Myers
eDitoriaL suPerVisor terry ann tatro
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Director oF MarKeting Karolina Honsa Zarychta
MarKeting Manager Jenny geiler
senior Designer Wendy Lai
eDitoriaL assistant Kirsten Loose
coVer iMage © andersphoto/shutterstock

this book was set in stiX two text by aptara®, inc. and printed and bound by quad graphics/Versailles. the
cover was printed by quad graphics/Versailles.

Founded in 1807, John Wiley & sons, inc. has been a valued source of knowledge and understanding for more
than 200 years, helping people around the world meet their needs and fulfill their aspirations. our company is
built on a foundation of principles that include responsibility to the communities we serve and where we live and
work. in 2008, we launched a corporate citizenship initiative, a global effort to address the environmental, social,
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nity and charitable support. For more information, please visit our website: www.wiley.com/go/citizenship.

copyright © 2019 John Wiley & sons, inc. all rights reserved. no part of this publication may be reproduced,
stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying,
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fax (201)748-6008, website http://www.wiley.com/go/permissions.

to order books or for customer service, please call 1-800-caLL WiLeY (225-5945).

Material from the uniform cPa examinations and unofficial answers, copyright © 1965, 1966, 1967, 1968,
1969, 1970, 1971, 1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, 1987,
1988, 1990, 1991, 1992, and 1993 by the american institute of certified Public accountants, inc., is adapted
with permission.

this book contains quotations from accounting research Bulletins, accounting Principles Board opinions,
accounting Principles Board statements, accounting interpretations, and accounting terminology Bulletins,
copyright © 1953, 1956, 1966, 1968, 1969, 1970, 1971, 1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981,
1982 by the american institute of certified Public accountants, inc., 1211 avenue of the americas, new York,
nY 10036.

this book contains citations from various FasB pronouncements. copyright © by Financial accounting stand-
ards Board, 401 Merritt 7, P.o. Box 5116, norwalk, ct 06856 u.s.a. reprinted with permission. copies of complete
documents are available from Financial accounting standards Board.

Material from the certificate in Management accounting examinations, copyright © 1975, 1976, 1977, 1978,
1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, and 1993 by the institute of
certified Management accountants, 10 Paragon Drive, Montvale, nJ 07645, is adapted with permission.

Material from the certified internal auditor examinations, copyright © May 1984, november 1984, May 1986 by
the institute of internal auditors, 249 Maitland ave., altemonte springs, FL 32701, is adapted with permission.

isBn-13 978-1-119503682

the inside back cover will contain printing identification and country of origin if omitted from this page. in
addition, if the isBn on the back cover differs from the isBn on this page, the one on the back cover is correct.

Printed in the united states of america

10 9 8 7 6 5 4 3 2 1

D e D i c a t e D t o

Our wives,
Donna, Enid, and Mary, for their love,

support, and encouragement

http://www.wiley.com/go/permissions

Brief Contents

v

1 Financial Accounting and Accounting
Standards 1-1

2 Conceptual Framework for Financial
Reporting 2-1

3 The Accounting Information System 3-1

4 Income Statement and Related
Information 4-1

5 Balance Sheet and Statement of Cash
Flows 5-1

6 Accounting and the Time Value of Money 6-1

7 Cash and Receivables 7-1

8 Valuation of Inventories: A Cost-Basis
Approach 8-1

9 Inventories: Additional Valuation Issues 9-1

10 Acquisition and Disposition of Property,
Plant, and Equipment 10-1

11 Depreciation, Impairments, and
Depletion 11-1

12 Intangible Assets 12-1

13 Current Liabilities and Contingencies 13-1

14 Long-Term Liabilities 14-1

15 Stockholders’ Equity 15-1

16 Dilutive Securities and Earnings
per Share 16-1

17 Investments 17-1

18 Revenue Recognition 18-1

19 Accounting for Income Taxes 19-1

20 Accounting for Pensions and Postretirement
Benefits 20-1

21 Accounting for Leases 21-1

22 Accounting Changes and Error
Analysis 22-1

23 Statement of Cash Flows 23-1

24 Full Disclosure in Financial Reporting 24-1

A p p e n d i x a Private Company Accounting a-1

A p p e n d i x B Specimen Financial Statements:
The Procter & Gamble
Company B-1

A p p e n d i x C Specimen Financial Statements:
The Coca-Cola Company C-1

A p p e n d i x D Specimen Financial Statements:
PepsiCo, Inc. D-1

A p p e n d i x E Specimen Financial Statements:
Marks and Spencer plc E-1

From the Authors

“if this text helps you appreciate the challenges,
worth, and limitations of financial reporting,
if it encourages you to evaluate critically and
understand financial accounting concepts and
practice, and if it p repares you for advanced study,
professional examinations, and the successful
and ethical pursuit of your career in accounting or
business in a global economy, then we will have
attained our objectives.”

through many editions, this text has continued to reflect the constant changes taking place
in the gaaP environment. this edition continues this tradition, which has become even
more significant as the financial reporting environment is exploding with major change. Here
are three areas of major importance that are now incorporated extensively into this edition
of the text.

ConvergenCe of gAAP And IfrS one of the most important innovations shaping
our capital markets was the idea of gaaP. it might be said that it would be even better if

we had one common set of accounting rules for the whole world, which
would make it easier for international investors to compare the financial
results of companies from different countries. Fortunately, gaaP and
international accounting standards have converged to result in a number
of common standards between gaaP and International financial
reporting Standards (IfrS). and you have the chance to be on the
ground floor as we develop for you the similarities and differences in the
two systems that ultimately will be one.

A fAIr vAlue MoveMent the FasB believes that fair value
information is more relevant to users than historical cost. as a result,

there is more information that is being reported on this basis, and even more will occur in
the future. the financial press is full of articles discussing how financial institutions must
fair value their assets, which has led to massive losses during the financial crisis. in addition,
additional insight into the reliability related to fair values is being addressed and disclosed
to help investors make important capital allocation decisions. We devote a considerable
amount of material that discusses and illustrates fair value concepts in this edition, including
its relevance to three major accounting standards updates: revenue, leases, and financial
instruments.

A new wAy of lookIng At generAlly ACCePted ACCountIng
PrInCIPleS (gAAP) Learning gaaP used to be a daunting task, as it is comprised of
many standards that vary in form, completeness, and structure. Fortunately, the profession
has developed the Financial accounting standards Board codification (often referred to as
the codification). this codification provides in one place all the gaaP related to a given
topic. this textbook is the first to incorporate this codification—it will make learning gaaP
easier and more interesting!

Intermediate Accounting is the market-leading text in providing the tools needed to understand what
gaaP is and how it is applied in practice. With this seventeenth edition, we strive to continue to
provide the material needed to understand this subject area. the text is comprehensive and up-to-date.
We also include proven pedagogical tools, designed to help you learn more effectively and to answer
the changing needs of this course.

We are excited about Intermediate Accounting, seventeenth edition. We believe it meets an im-
portant objective of providing useful information to educators and students interested in learn-
ing about both gaaP and iFrs. suggestions and comments from users of this text will be
appreciated. Please feel free to e-mail any one of us.

donald e. kieso Jerry J. weygandt terry d. warfield
somonauk, illinois Madison, Wisconsin Madison, Wisconsin

vi

About the Authors

Don Kieso
donAld e. kIeSo, Phd, CPA, received
his bachelor’s degree from aurora university
and his doctorate in accounting from the uni-
versity of illinois. He has served as chairman
of the Department of accountancy and is cur-
rently the KPMg emeritus Professor of ac-
countancy at northern illinois university. He
has public accounting experience with Price
Waterhouse & co. (san Francisco and chicago)
and arthur andersen & co. (chicago) and re-
search experience with the research Division
of the american institute of certified Public
accountants (new York). He has done post-
doctorate work as a Visiting scholar at the uni-
versity of california at Berkeley and is a recip-
ient of niu’s teaching excellence award and
four golden apple teaching awards. Professor
Kieso is the author of other accounting and
business books and is a member of the american
accounting association, the american insti-
tute of certified Public accountants, and the
illinois cPa society. He has served as a mem-
ber of the Board of Directors of the illinois cPa
society, then aacsB’s accounting accredita-
tion committees, the state of illinois comptrol-
ler’s commission, as secretary-treasurer of the
Federation of schools of accountancy, and as
secretary-treasurer of the american account-
ing association. Professor Kieso is currently
serving on the Board of trustees and executive
committee of aurora university, as a member
of the Board of Directors of Kishwaukee com-
munity Hospital, and as treasurer and Director
of Valley West community Hospital. From 1989
to 1993, he served as a charter member of the
national accounting education change com-
mission. He is the recipient of the outstanding
accounting educator award from the illinois
cPa society, the Fsa’s Joseph a. silvoso award
of Merit, the niu Foundation’s Humanitarian
award for service to Higher education, a Dis-
tinguished service award from the illinois cPa
society, and in 2003 an honorary doctorate from
aurora university.

Jerry Weygandt
Jerry J. weygAndt, Phd, CPA, is the
arthur andersen alumni emeritus Professor
of accounting at the university of Wisconsin—
Madison. He holds a Ph.D. in accounting from
the university of illinois. articles by Professor
Weygandt have appeared in the Accounting
Review, Journal of Accounting Research, Account-
ing Horizons, Journal of Accountancy, and other
academic and professional j ournals. these
articles have examined such financial report-
ing issues as accounting for price-level adjust-
ments, pensions, convertible securities, stock
option contracts, and interim reports. Professor
Weygandt is author of other accounting and
financial reporting books and is a member of
the american accounting association, the
american institute of certified Public account-
ants, and the Wisconsin society of certified
Public accountants. He has served on numer-
ous committees of the american accounting
association and as a member of the editorial
board of the accounting review; he also has
served as President and secretary-treasurer
of the american accounting association. in
addition, he has been actively involved with
the american institute of certified Public
accountants and has been a member of the
accounting standards executive committee
(acsec) of that organization. He has served
on the FasB task force that examined the re-
porting issues related to accounting for income
taxes and served as a trustee of the Financial
accounting Foundation. Professor Weygandt
has received the chancellor’s award for excel-
lence in teaching and the Beta gamma sigma
Dean’s teaching award. He is on the board of
directors of M & i Bank of southern Wisconsin.
He is the recipient of the Wisconsin institute of
cPa’s outstanding educator’s award and the
Lifetime achievement award. in 2001, he re-
ceived the american accounting association’s
outstanding educator award.

Terry Warfield
terry d. wArfIeld, Phd, is the Pwc
Professor in accounting at the university of
Wisconsin—Madison. He received a B.s. and
M.B.a. from indiana university and a Ph.D. in
accounting from the university of iowa. Pro-
fessor Warfield’s area of expertise is financial
reporting, and prior to his academic career, he
worked for five years in the banking industry.
He served as the academic accounting Fellow
in the office of the chief accountant at the
u.s. securities and exchange commission in
Washington, D.c. from 1995–1996. Professor
Warfield’s primary research interests concern
financial accounting standards and disclosure
policies. He has published scholarly articles in
The Accounting Review, Journal of Accounting
and Economics, Research in Accounting Regu-
lation, and Accounting Horizons, and he has
served on the editorial boards of The Account-
ing Review, Accounting Horizons, and Issues in
Accounting Education. He has served as presi-
dent of the Financial accounting and report-
ing section, the Financial accounting standards
committee of the american accounting asso-
ciation (chair 1995–1996), and on the aaa-FasB
research conference committee. He also
served on the Financial accounting standards
advisory council of the Financial accounting
standards Board and as a trustee of the Finan-
cial accounting Foundation. Professor Warfield
has received teaching awards at both the uni-
versity of iowa and the university of Wisconsin,
and he was named to the teaching academy at
the university of Wisconsin in 1995. Professor
Warfield has developed and published sev-
eral case studies based on his research for use
in accounting classes. these cases have been
selected for the aicPa Professor-Practitioner
case Development Program and have been
published in Issues in Accounting Education.

Chapter 1: financial Accounting and Accounting
Standards

• generally updated for content and recent developments.

Chapter 2: Conceptual framework for financial reporting
• new footnote detailing most recent FasB updates related

to disclosures.
• completely updated IFRS Insights section for the most

recent information concerning the iasB and FasB con-
ceptual statements.

Chapter 3: the Accounting Information System
• new section on the chart of accounts, as well as increased

explanation and graphics of the recording process.
• updated opening story on economic crime to reflect latest

data and trends.
• new “What Do the numbers Mean?” (WDnM) box on

blockchain.
• new analytics in action activity on collecting financial

data from a variety of sources.

Chapter 4: Income Statement and related Information
• new WDnM box on how and why companies use earn-

ings management to misrepresent company performance.
• updated information about joint FasB-iasB project on

financial statement presentation (currently on hold).
• updated evolving issue box on most recent information

concerning non-gaaP reporting.

Chapter 5: Balance Sheet and Statement of Cash flows
• rewrote “additional information” section for most recent

FasB updates and recommendations on note disclosures
regarding accounting policies, contractual situations,
contingencies, and fair value.

• new analytics in action activity on ratio analysis for
companies in the Dow Jones average.

Chapter 6: Accounting and the time value of Money
• new analytics in action activity on analyzing business alter-

natives, with consideration of time value of money concepts.

Chapter 7: Cash and receivables
• new opening story, discussing current effect of the

tax cuts and Jobs act of 2017 in terms of amounts of
company cash parked overseas.

• new evolving issue, on what companies should include
as part of cash and cash equivalents on the balance sheet,
such as cryptocurrencies.

• updated discussion of allowance method for uncollect-
ible accounts per latest FasB standards (i.e., net amount
expected to be collected instead of net realizable value).

• new analytics in action activity on estimating the allow-
ance for doubtful accounts and conducting financial anal-
ysis of the collectibility of accounts receivable.

Chapter 8: valuation of Inventories: A Cost-Basis Approach
• generally updated for content and recent developments.

Chapter 9: Inventories: Additional valuation Issues
• new WDnM boxes on (1) corporate barter to handle

problem inventory and (2) importance of identifying
markdown method (cost versus retail) used by retailers.

• new analytics in action activity on analyzing inventory
balances for possible impairment.

Chapter 10: Acquisition and disposition of Property,
Plant, and equipment

• Moved contributions discussion as a new appendix, ex-
panding its discussion per recent FasB guidance.

• new WDnM box on importance for companies to effec-
tively manage capital spending.

Chapter 11: depreciation, Impairments, and depletion
• updated opening story on technical and environmental

issues affecting recognition of impaired assets.
• updated footnote 15 to include the financial impacts of

the most recent legislation, tax cuts and Jobs act of …

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Intermediate Accounting

17th Edition

D o n a l D E . K i E s o P h D , C Pa
Northern Illinois University

DeKalb, Illinois

J E r r y J . W E y g a n D t P h D , C Pa
University of Wisconsin—Madison

Madison, Wisconsin

t E r r y D . W a r f i E l D , P h D
University of Wisconsin—Madison

Madison, Wisconsin

Director anD Vice PresiDent Michael McDonald
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to order books or for customer service, please call 1-800-caLL WiLeY (225-5945).

Material from the uniform cPa examinations and unofficial answers, copyright © 1965, 1966, 1967, 1968,
1969, 1970, 1971, 1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, 1987,
1988, 1990, 1991, 1992, and 1993 by the american institute of certified Public accountants, inc., is adapted
with permission.

this book contains quotations from accounting research Bulletins, accounting Principles Board opinions,
accounting Principles Board statements, accounting interpretations, and accounting terminology Bulletins,
copyright © 1953, 1956, 1966, 1968, 1969, 1970, 1971, 1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981,
1982 by the american institute of certified Public accountants, inc., 1211 avenue of the americas, new York,
nY 10036.

this book contains citations from various FasB pronouncements. copyright © by Financial accounting stand-
ards Board, 401 Merritt 7, P.o. Box 5116, norwalk, ct 06856 u.s.a. reprinted with permission. copies of complete
documents are available from Financial accounting standards Board.

Material from the certificate in Management accounting examinations, copyright © 1975, 1976, 1977, 1978,
1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, and 1993 by the institute of
certified Management accountants, 10 Paragon Drive, Montvale, nJ 07645, is adapted with permission.

Material from the certified internal auditor examinations, copyright © May 1984, november 1984, May 1986 by
the institute of internal auditors, 249 Maitland ave., altemonte springs, FL 32701, is adapted with permission.

isBn-13 978-1-119503682

the inside back cover will contain printing identification and country of origin if omitted from this page. in
addition, if the isBn on the back cover differs from the isBn on this page, the one on the back cover is correct.

Printed in the united states of america

10 9 8 7 6 5 4 3 2 1

D e D i c a t e D t o

Our wives,
Donna, Enid, and Mary, for their love,

support, and encouragement

http://www.wiley.com/go/permissions

Brief Contents

v

1 Financial Accounting and Accounting
Standards 1-1

2 Conceptual Framework for Financial
Reporting 2-1

3 The Accounting Information System 3-1

4 Income Statement and Related
Information 4-1

5 Balance Sheet and Statement of Cash
Flows 5-1

6 Accounting and the Time Value of Money 6-1

7 Cash and Receivables 7-1

8 Valuation of Inventories: A Cost-Basis
Approach 8-1

9 Inventories: Additional Valuation Issues 9-1

10 Acquisition and Disposition of Property,
Plant, and Equipment 10-1

11 Depreciation, Impairments, and
Depletion 11-1

12 Intangible Assets 12-1

13 Current Liabilities and Contingencies 13-1

14 Long-Term Liabilities 14-1

15 Stockholders’ Equity 15-1

16 Dilutive Securities and Earnings
per Share 16-1

17 Investments 17-1

18 Revenue Recognition 18-1

19 Accounting for Income Taxes 19-1

20 Accounting for Pensions and Postretirement
Benefits 20-1

21 Accounting for Leases 21-1

22 Accounting Changes and Error
Analysis 22-1

23 Statement of Cash Flows 23-1

24 Full Disclosure in Financial Reporting 24-1

A p p e n d i x a Private Company Accounting a-1

A p p e n d i x B Specimen Financial Statements:
The Procter & Gamble
Company B-1

A p p e n d i x C Specimen Financial Statements:
The Coca-Cola Company C-1

A p p e n d i x D Specimen Financial Statements:
PepsiCo, Inc. D-1

A p p e n d i x E Specimen Financial Statements:
Marks and Spencer plc E-1

From the Authors

“if this text helps you appreciate the challenges,
worth, and limitations of financial reporting,
if it encourages you to evaluate critically and
understand financial accounting concepts and
practice, and if it p repares you for advanced study,
professional examinations, and the successful
and ethical pursuit of your career in accounting or
business in a global economy, then we will have
attained our objectives.”

through many editions, this text has continued to reflect the constant changes taking place
in the gaaP environment. this edition continues this tradition, which has become even
more significant as the financial reporting environment is exploding with major change. Here
are three areas of major importance that are now incorporated extensively into this edition
of the text.

ConvergenCe of gAAP And IfrS one of the most important innovations shaping
our capital markets was the idea of gaaP. it might be said that it would be even better if

we had one common set of accounting rules for the whole world, which
would make it easier for international investors to compare the financial
results of companies from different countries. Fortunately, gaaP and
international accounting standards have converged to result in a number
of common standards between gaaP and International financial
reporting Standards (IfrS). and you have the chance to be on the
ground floor as we develop for you the similarities and differences in the
two systems that ultimately will be one.

A fAIr vAlue MoveMent the FasB believes that fair value
information is more relevant to users than historical cost. as a result,

there is more information that is being reported on this basis, and even more will occur in
the future. the financial press is full of articles discussing how financial institutions must
fair value their assets, which has led to massive losses during the financial crisis. in addition,
additional insight into the reliability related to fair values is being addressed and disclosed
to help investors make important capital allocation decisions. We devote a considerable
amount of material that discusses and illustrates fair value concepts in this edition, including
its relevance to three major accounting standards updates: revenue, leases, and financial
instruments.

A new wAy of lookIng At generAlly ACCePted ACCountIng
PrInCIPleS (gAAP) Learning gaaP used to be a daunting task, as it is comprised of
many standards that vary in form, completeness, and structure. Fortunately, the profession
has developed the Financial accounting standards Board codification (often referred to as
the codification). this codification provides in one place all the gaaP related to a given
topic. this textbook is the first to incorporate this codification—it will make learning gaaP
easier and more interesting!

Intermediate Accounting is the market-leading text in providing the tools needed to understand what
gaaP is and how it is applied in practice. With this seventeenth edition, we strive to continue to
provide the material needed to understand this subject area. the text is comprehensive and up-to-date.
We also include proven pedagogical tools, designed to help you learn more effectively and to answer
the changing needs of this course.

We are excited about Intermediate Accounting, seventeenth edition. We believe it meets an im-
portant objective of providing useful information to educators and students interested in learn-
ing about both gaaP and iFrs. suggestions and comments from users of this text will be
appreciated. Please feel free to e-mail any one of us.

donald e. kieso Jerry J. weygandt terry d. warfield
somonauk, illinois Madison, Wisconsin Madison, Wisconsin

vi

About the Authors

Don Kieso
donAld e. kIeSo, Phd, CPA, received
his bachelor’s degree from aurora university
and his doctorate in accounting from the uni-
versity of illinois. He has served as chairman
of the Department of accountancy and is cur-
rently the KPMg emeritus Professor of ac-
countancy at northern illinois university. He
has public accounting experience with Price
Waterhouse & co. (san Francisco and chicago)
and arthur andersen & co. (chicago) and re-
search experience with the research Division
of the american institute of certified Public
accountants (new York). He has done post-
doctorate work as a Visiting scholar at the uni-
versity of california at Berkeley and is a recip-
ient of niu’s teaching excellence award and
four golden apple teaching awards. Professor
Kieso is the author of other accounting and
business books and is a member of the american
accounting association, the american insti-
tute of certified Public accountants, and the
illinois cPa society. He has served as a mem-
ber of the Board of Directors of the illinois cPa
society, then aacsB’s accounting accredita-
tion committees, the state of illinois comptrol-
ler’s commission, as secretary-treasurer of the
Federation of schools of accountancy, and as
secretary-treasurer of the american account-
ing association. Professor Kieso is currently
serving on the Board of trustees and executive
committee of aurora university, as a member
of the Board of Directors of Kishwaukee com-
munity Hospital, and as treasurer and Director
of Valley West community Hospital. From 1989
to 1993, he served as a charter member of the
national accounting education change com-
mission. He is the recipient of the outstanding
accounting educator award from the illinois
cPa society, the Fsa’s Joseph a. silvoso award
of Merit, the niu Foundation’s Humanitarian
award for service to Higher education, a Dis-
tinguished service award from the illinois cPa
society, and in 2003 an honorary doctorate from
aurora university.

Jerry Weygandt
Jerry J. weygAndt, Phd, CPA, is the
arthur andersen alumni emeritus Professor
of accounting at the university of Wisconsin—
Madison. He holds a Ph.D. in accounting from
the university of illinois. articles by Professor
Weygandt have appeared in the Accounting
Review, Journal of Accounting Research, Account-
ing Horizons, Journal of Accountancy, and other
academic and professional j ournals. these
articles have examined such financial report-
ing issues as accounting for price-level adjust-
ments, pensions, convertible securities, stock
option contracts, and interim reports. Professor
Weygandt is author of other accounting and
financial reporting books and is a member of
the american accounting association, the
american institute of certified Public account-
ants, and the Wisconsin society of certified
Public accountants. He has served on numer-
ous committees of the american accounting
association and as a member of the editorial
board of the accounting review; he also has
served as President and secretary-treasurer
of the american accounting association. in
addition, he has been actively involved with
the american institute of certified Public
accountants and has been a member of the
accounting standards executive committee
(acsec) of that organization. He has served
on the FasB task force that examined the re-
porting issues related to accounting for income
taxes and served as a trustee of the Financial
accounting Foundation. Professor Weygandt
has received the chancellor’s award for excel-
lence in teaching and the Beta gamma sigma
Dean’s teaching award. He is on the board of
directors of M & i Bank of southern Wisconsin.
He is the recipient of the Wisconsin institute of
cPa’s outstanding educator’s award and the
Lifetime achievement award. in 2001, he re-
ceived the american accounting association’s
outstanding educator award.

Terry Warfield
terry d. wArfIeld, Phd, is the Pwc
Professor in accounting at the university of
Wisconsin—Madison. He received a B.s. and
M.B.a. from indiana university and a Ph.D. in
accounting from the university of iowa. Pro-
fessor Warfield’s area of expertise is financial
reporting, and prior to his academic career, he
worked for five years in the banking industry.
He served as the academic accounting Fellow
in the office of the chief accountant at the
u.s. securities and exchange commission in
Washington, D.c. from 1995–1996. Professor
Warfield’s primary research interests concern
financial accounting standards and disclosure
policies. He has published scholarly articles in
The Accounting Review, Journal of Accounting
and Economics, Research in Accounting Regu-
lation, and Accounting Horizons, and he has
served on the editorial boards of The Account-
ing Review, Accounting Horizons, and Issues in
Accounting Education. He has served as presi-
dent of the Financial accounting and report-
ing section, the Financial accounting standards
committee of the american accounting asso-
ciation (chair 1995–1996), and on the aaa-FasB
research conference committee. He also
served on the Financial accounting standards
advisory council of the Financial accounting
standards Board and as a trustee of the Finan-
cial accounting Foundation. Professor Warfield
has received teaching awards at both the uni-
versity of iowa and the university of Wisconsin,
and he was named to the teaching academy at
the university of Wisconsin in 1995. Professor
Warfield has developed and published sev-
eral case studies based on his research for use
in accounting classes. these cases have been
selected for the aicPa Professor-Practitioner
case Development Program and have been
published in Issues in Accounting Education.

Chapter 1: financial Accounting and Accounting
Standards

• generally updated for content and recent developments.

Chapter 2: Conceptual framework for financial reporting
• new footnote detailing most recent FasB updates related

to disclosures.
• completely updated IFRS Insights section for the most

recent information concerning the iasB and FasB con-
ceptual statements.

Chapter 3: the Accounting Information System
• new section on the chart of accounts, as well as increased

explanation and graphics of the recording process.
• updated opening story on economic crime to reflect latest

data and trends.
• new “What Do the numbers Mean?” (WDnM) box on

blockchain.
• new analytics in action activity on collecting financial

data from a variety of sources.

Chapter 4: Income Statement and related Information
• new WDnM box on how and why companies use earn-

ings management to misrepresent company performance.
• updated information about joint FasB-iasB project on

financial statement presentation (currently on hold).
• updated evolving issue box on most recent information

concerning non-gaaP reporting.

Chapter 5: Balance Sheet and Statement of Cash flows
• rewrote “additional information” section for most recent

FasB updates and recommendations on note disclosures
regarding accounting policies, contractual situations,
contingencies, and fair value.

• new analytics in action activity on ratio analysis for
companies in the Dow Jones average.

Chapter 6: Accounting and the time value of Money
• new analytics in action activity on analyzing business alter-

natives, with consideration of time value of money concepts.

Chapter 7: Cash and receivables
• new opening story, discussing current effect of the

tax cuts and Jobs act of 2017 in terms of amounts of
company cash parked overseas.

• new evolving issue, on what companies should include
as part of cash and cash equivalents on the balance sheet,
such as cryptocurrencies.

• updated discussion of allowance method for uncollect-
ible accounts per latest FasB standards (i.e., net amount
expected to be collected instead of net realizable value).

• new analytics in action activity on estimating the allow-
ance for doubtful accounts and conducting financial anal-
ysis of the collectibility of accounts receivable.

Chapter 8: valuation of Inventories: A Cost-Basis Approach
• generally updated for content and recent developments.

Chapter 9: Inventories: Additional valuation Issues
• new WDnM boxes on (1) corporate barter to handle

problem inventory and (2) importance of identifying
markdown method (cost versus retail) used by retailers.

• new analytics in action activity on analyzing inventory
balances for possible impairment.

Chapter 10: Acquisition and disposition of Property,
Plant, and equipment

• Moved contributions discussion as a new appendix, ex-
panding its discussion per recent FasB guidance.

• new WDnM box on importance for companies to effec-
tively manage capital spending.

Chapter 11: depreciation, Impairments, and depletion
• updated opening story on technical and environmental

issues affecting recognition of impaired assets.
• updated footnote 15 to include the financial impacts of

the most recent legislation, tax cuts and Jobs act of …

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