Financial Accounting for Decision Makers

vii
Preface 
xv
How to use this book 
xvii
Acknowledgements 
xix
1 Introduction to accounting 
1
Introduction
 
1
Learning outcomes
 
1
What is accounting? 
2
Who are the users of accounting information? 
2
The conflicting interests of users 
4
How useful is accounting information? 
4
Providing a service 
6
Weighing up the costs and benefits 
9
Accounting as an information system 
11
Management accounting and financial accounting 
13
Scope of this book 
15
The changing face of accounting 
16
Accounting for business 
18
What is the purpose of a business? 
18
What kinds of business ownership exist? 
19
How are businesses organised? 
22
The quest for wealth creation 
22
Meeting the needs of other stakeholders 
23
Balancing risk and return 
26
Reasons to be ethical 
27
Not-for-profit organisations 
28
Summary
30
Key terms
32
References
32
Further reading
32
Critical review questions
32
2 Measuring and reporting financial position 
33
Introduction
 
33
Learning outcomes
 
33
The major financial statements – an overview 
34
The statement of financial position 
38
Contents
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viii
CONTENTS
The effect of trading transactions 
45
Classifying assets 
47
Classifying claims 
49
Statement layouts 
50
Capturing a moment in time 
52
The role of accounting conventions 
53
Money measurement 
57
Valuing assets 
60
Meeting user needs 
65
Self-assessment question 
66
Summary
67
Key terms
69
Reference
69
Further reading
69
Critical review questions
70
Exercises
70