PDF Using Financial Accounting Information The Alternative To Debits and Credits Gary A Porter Ebook Full Chapter

Using Financial Accounting
Information: The Alternative to Debits

and Credits Gary A. Porter
Visit to download the full and correct content document:
https://textbookfull.com/product/using-financial-accounting-information-the-alternative-
to-debits-and-credits-gary-a-porter/
More products digital (pdf, epub, mobi) instant
download maybe you interests ...
Using accounting & financial information : analyzing,

forecasting & decision making First Edition Bettner
https://textbookfull.com/product/using-accounting-financial-
information-analyzing-forecasting-decision-making-first-edition-
bettner/
About Financial Accounting A. Rehwinkel
https://textbookfull.com/product/about-financial-accounting-a-
rehwinkel/
Financial accounting Duchac
https://textbookfull.com/product/financial-accounting-duchac/
Financial accounting and reporting Elliott
https://textbookfull.com/product/financial-accounting-and-
reporting-elliott/
Affordable Housing Development: Financial Feasibility,
Tax Increment Financing and Tax Credits Jaime P. Luque
https://textbookfull.com/product/affordable-housing-development-
financial-feasibility-tax-increment-financing-and-tax-credits-
jaime-p-luque/
Financial Times Guide to Using the Financial Pages 5th

Edition Vaitilimgam Romesh
https://textbookfull.com/product/financial-times-guide-to-using-
the-financial-pages-5th-edition-vaitilimgam-romesh/
Financial Accounting Robert Libby
https://textbookfull.com/product/financial-accounting-robert-
libby/
Horngren’s Financial and Managerial Accounting, the

Financial Chapters Tracie L. Miller-Nobles
https://textbookfull.com/product/horngrens-financial-and-
managerial-accounting-the-financial-chapters-tracie-l-miller-
nobles/
Horngren's financial & managerial accounting: the

financial chapters Sixth Edition Matsumura
https://textbookfull.com/product/horngrens-financial-managerial-
accounting-the-financial-chapters-sixth-edition-matsumura/
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
10e
Using Financial
Accounting Information
THE ALTERNATIVE TO
DEBITS AND CREDITS
Gary A. Porter
DRAKE UNIVERSITY
Curtis L. Norton
ARIZONA STATE UNIVERSITY
Using Financial Accounting Information: ª 2018, 2015 Cengage Learning¤
The Alternative to Debits and Credits,
10th edition ALL RIGHTS RESERVED. No part of this work covered by the copyright herein
Gary A. Porter, Curtis L. Norton may be reproduced or distributed in any form or by any means, except as
permitted by U.S. copyright law, without the prior written permission of the
Vice President, General Manager, copyright owner.
Social Science & Qualitative Business:
Erin Joyner
For product information and technology assistance, contact us at
Executive Product Director: Mike Schenk Cengage Learning Customer & Sales Support, 1-800-354-9706
Product Director: Jason Fremder For permission to use material from this text or product,
Senior Product Manager: Matt Filimonov submit all requests online at www.cengage.com/permissions
Further permissions questions can be emailed to
Content Development Manager: Daniel Celenza permissionrequest@cengage.com
Content Developer: Jonathan Gross
Senior Digital Production Project Manager: Unless otherwise noted, all items are ª Cengage Learning.
Sally Nieman
Screenshots are used with permission from Microsoft Corporation. Microsoft
Executive Marketing Manager: Robin LeFevre
Excel¤ is a registered trademark of Microsoft Corporation. ª 2016 Microsoft.
Senior Content Project Manager: Tim Bailey
Manufacturing Planner: Doug Wilke The financial statements are included for illustrative and education purposes
only. Nothing herein should be construed as financial advice.
Production Service: Cenveo Publisher Services
Senior Art Director: Michelle Kunkler Library of Congress Control Number: 2016954444
Cover and Internal Designer: Red Hanger Design Student Edition ISBN: 978-1-337-27633-7
Cover Image: iStockPhoto.com/Piotr Krzeslak Loose-Leaf Edition ISBN: 978-1-337-27639-9
Connection Design Image:
ª Toria/Shutterstock.com Cengage Learning
20 Channel Center Street
Intellectual Property
Boston, MA 02210
Analyst: Brittani Morgan USA
Project Manager: Betsy Hathaway
Cengage Learning is a leading provider of customized learning solutions with
employees residing in nearly 40 different countries and sales in more than
125 countries around the world. Find your local representative at
www.cengage.com.
Cengage Learning products are represented in Canada by

Nelson Education, Ltd.
To learn more about Cengage Learning Solutions, visit www.cengage.com
Purchase any of our products at your local college store or at our preferred
online store www.cengagebrain.com
Printed in Canada
Print Number: 01 Print Year: 2016
To those who really ‘‘count’’
Melissa
Kathy, Amy, Andrew
In memory of
Sophie
Brief Contents
Contents v
Preface xi
CHAPTER 1 Accounting as a Form of Communication 2
CHAPTER 2 Financial Statements and the Annual Report 50

CHAPTER 3 Processing Accounting Information 100
CHAPTER 4 Income Measurement and Accrual Accounting 148
CHAPTER 5 Inventories and Cost of Goods Sold 208

CHAPTER 6 Cash and Internal Control 276
CHAPTER 7 Receivables and Investments 310
CHAPTER 8 Operating Assets: Property, Plant, and Equipment, and Intangibles 356
CHAPTER 9 Current Liabilities, Contingencies, and the Time Value of Money 402
CHAPTER 10 Long-Term Liabilities 454
CHAPTER 11 Stockholders’ Equity 500

CHAPTER 12 The Statement of Cash Flows 554
CHAPTER 13 Financial Statement Analysis 622
APPENDIX A International Financial Reporting Standards A-1
APPENDIX B Excerpts from Chipotle Mexican Grill, Inc. Form 10-K

for the Fiscal Year Ended December 31, 2015 B-1
APPENDIX C Excerpts from Panera Bread Company Form 10-K for the
Fiscal Year Ended December 29, 2015 C-1
Glossary G-1
Index I-1
iv
Contents
CHAPTER 1 Why Should Accountants Be Concerned with Ethics? 22

Is the Information Relevant and a Faithful
Accounting as a Form of Communication 2 Representation? 22
Moral and Social Context of Ethical Behavior 23
Chipotle Mexican Grill, Inc.: Making Business Accountants and Ethical Judgments 23
Decisions 3 The Changing Face of the Accounting Profession 24
MODULE 1 The Nature of Business 4 CHAPTER 2

Forms of Organization 4 Financial Statements and the Annual
Business Entities 5 Report 50
Sole Proprietorships 5
Partnerships 5
Panera Bread Company: Making Business
Corporations 5
Nonbusiness Entities 6
Decisions 51
Organizations and Social Responsibility 6
MODULE 1 Financial Reporting Objectives and
The Nature of Business Activity 6 Characteristics of Useful Information 52
Financing Activities 6
What Makes Accounting Information Useful?
Investing Activities 7
Qualitative Characteristics 53
Operating Activities 7
Summary of Business Activities 7 Understandability 53
Relevance 54
MODULE 2 Accounting and Financial Statements 9 Faithful Representation 54
Users of Accounting Information and Their Needs 9 Comparability and Consistency 54
Internal Users 9 Materiality 55
External Users 9 Conservatism 55
Using Financial Accounting Information 10 An International Perspective on Qualitative
Characteristics 56
Financial Decision Framework 10
MODULE 2 Classified Balance Sheets 56
Financial Statements: How Accountants Understanding the Operating Cycle 57
Communicate 11 Current Assets 58
The Accounting Equation 11 Noncurrent Assets 58
The Balance Sheet 12 Investments 59
The Income Statement 13 Property, Plant, and Equipment 59
The Statement of Retained Earnings 14 Intangibles 59
The Statement of Cash Flows 14 Current Liabilities 59
Relationships Among the Financial Statements 15 Long-Term Liabilities 60
Looking at Financial Statements for a Real Company: Stockholders’ Equity 60
Chipotle 15
Chipotle’s Balance Sheet 15 Using a Classified Balance Sheet: Introduction to
Chipotle’s Income Statement 18 Ratios 62
MODULE 3 Conceptual Framework Working Capital 62
Current Ratio 62
of Accounting 19
Conceptual Framework for Accounting 19 MODULE 3 Income Statements, Statements of
Economic Entity Concept 20 Retained Earnings, and Statements of Cash Flows 64
Asset Valuation: Cost or Fair Value? 20 What Appears on the Income Statement? 64
Going Concern 20 Format of the Income Statement 64
Time Period Assumption 21 Single-Step Format for the Income Statement 64
Setting Accounting Standards 21 Multiple-Step Format for the Income Statement 65
Who Determines the Rules for Financial Statements? 21 Using an Income Statement 66
The Audit of Financial Statements 22 The Statement of Retained Earnings 67
Introduction to Ethics in Accounting 22 The Statement of Cash Flows 68
v
vi Contents
MODULE 4 Reading and Using the MODULE 1 Accrual Accounting Principles 150
Annual Report 70 Recognition 150
Panera Bread’s Balance Sheet 70 Measurement 150
Panera Bread’s Income Statement 72 Choice 1: The Attribute to Be Measured 150
Choice 2: The Unit of Measure 151
Making Business Decisions: Panera Bread 73 Summary of Recognition and Measurement in
Other Elements of an Annual Report 76 Financial Statements 151
Report of Independent Accountants (Auditors’ Report) 76
The Accrual Basis of Accounting 152
The Ethical Responsibility of Management and the Auditors 76
Management Discussion and Analysis 77 Comparing the Cash and Accrual Bases of Accounting 152
What the Income Statement and the Statement of
Notes to Consolidated Financial Statements 78
Cash Flows Reveal 154
Accrual Accounting and Time Periods 155
CHAPTER 3
The Revenue Recognition Principle 155
Processing Accounting Information 100
Expense Recognition and the Matching
Vail Resorts, Inc.: Making Business Decisions 101 Principle 155
MODULE 1 Transactions and the Accounting MODULE 2 Adjustments 158
Equation 102 Types of Adjustments 158
External and Internal Events 102 (1) Cash Paid Before Expense Is Incurred
(Deferred Expense) 159
The Role of Source Documents in Recording (2) Cash Received Before Revenue Is Recognized
Transactions 102 (Deferred Revenue) 161
Analyzing the Effects of Transactions on the (3) Expense Incurred Before Cash Is Paid (Accrued
Accounting Equation 103 Liability) 162
The Cost Principle 105 (4) Revenue Recognized Before Cash Is Received
Balance Sheet and Income Statement for Glengarry (Accrued Asset) 165
Health Club 105 Accruals and Deferrals 166
What Is an Account? 107 Summary of Adjustments 166
Comprehensive Example of Adjustments 167
Chart of Accounts 107 Income Statement and Balance Sheet for
The General Ledger 107 Duffy Transit 170
Identify and Analyze 108 Ethical Considerations for a Company on the
MODULE 2 Debits and Credits 111 Accrual Basis 171
Accounting Tools: The Double-Entry System 111 MODULE 3 The Accounting Cycle 172
The T Account 111 The Use of a Work Sheet 173
Debits and Credits 112 The Closing Process 174
Interim Financial Statements 174
Debits Aren’t Bad, and Credits Aren’t Good 113
Debits and Credits for Revenues, Expenses, and
Dividends 113
Revenues 113
CHAPTER 5
Expenses 113
Dividends 113 Inventories and Cost of Goods Sold 208
Summary of the Rules for Increasing and Decreasing
Accounts 113 Gap Inc.: Making Business Decisions 209
Normal Account Balances 113
Debits and Credits Applied to Transactions 114 MODULE 1 Sales, Cost of Goods Sold,
Transactions for Glengarry Health Club 114 and Gross Profit 210
MODULE 3 Journal Entries and Trial Balances 117 Three Types of Inventory Costs and Three Forms of
The Journal: The Firm’s Chronological Record of Inventory 210
Transactions 117 Three Types of Manufacturing Costs 210
Three Forms of Inventory 210
The Trial Balance 119
Net Sales of Merchandise 211
CHAPTER 4 Sales Returns and Allowances 212
Credit Terms and Sales Discounts 212
Income Measurement and Accrual
Cost of Goods Sold 213
Accounting 148
The Cost of Goods Sold Model 213
Inventory Systems: Perpetual and Periodic 214
Nordstrom, Inc.: Making Business Decisions 149
Contents vii
Beginning and Ending Inventories in a Periodic System 215 Control Over Cash 278
Cost of Goods Purchased 216 Cash Management 279
Purchases 216 Reading a Bank Statement 279
Purchase Discounts 216 The Bank Reconciliation 281
Purchase Returns and Allowances 217 The Need for Adjustments to the Records 282
Shipping Terms and Transportation Costs 217 Establishing a Petty Cash Fund 283
Shipping Terms and Transfer of Title to Inventory 218
MODULE 2 Internal Control 284
The Gross Profit Ratio 218 The Sarbanes-Oxley Act of 2002 284
Making Business Decisions: Gap Inc. 219 The Control Environment 287
The Accounting System 287
MODULE 2 Inventory Costing Methods 222
Internal Control Procedures 287
Inventory Costs: What Should Be Included? 222
Proper Authorizations 287
Inventory Costing Methods with a Periodic Segregation of Duties 287
System 223 Independent Verification 288
Specific Identification Method 224 Safeguarding of Assets and Records 288
Weighted Average Cost Method 225 Independent Review and Appraisal 288
First-In, First-Out Method (FIFO) 226 Design and Use of Business Documents 288
Last-In, First-Out Method (LIFO) 227 Limitations on Internal Control 289
Selecting an Inventory Costing Method 227 Computerized Business Documents and Internal
Costing Methods and Cash Flow 227 Control 289
LIFO Liquidation 228 Control Over Cash Receipts 289
The LIFO Conformity Rule 229 Cash Received Over the Counter 289
The LIFO Reserve: Estimating LIFO’s Effect on Cash Received in the Mail 290
Income and on Taxes Paid for Winnebago Industries 229 Cash Discrepancies 290
Costing Methods and Inventory Profits 230 The Role of Computerized Business Documents in
Changing Inventory Methods 231 Controlling Cash Disbursements 290
Inventory Valuation in Other Countries 231 Purchase Requisition 290
MODULE 3 Other Inventory Issues 232 Purchase Order 292
Invoice 292
Inventory Errors 232 Receiving Report 293
Valuing Inventory at Lower of Cost or Market 235 Invoice Approval Form 294
Why Replacement Cost Is Used as a Measure of Market 235 Check with Remittance Advice 294
Application of the LCM Rule 236
Lower-of-Cost-or-Market under International Standards 237
CHAPTER 7
MODULE 4 Inventory Management and Receivables and Investments 310
Cash Flow Issues 237
Making Business Decisions: Gap Inc. 238 Apple Inc.: Making Business Decisions 311
How Inventories Affect the Cash Flows Statement 240 MODULE 1 Accounting for Accounts Receivable 312
Appendix: MODULE 5 Inventory Costing The Use of a Subsidiary Ledger 312
Methods with a Perpetual System 242 The Valuation of Accounts Receivable 313
Two Methods to Account for Bad Debts 313
FIFO Costing with a Perpetual System 242 Two Approaches to the Allowance Method of
LIFO Costing with a Perpetual System 243 Accounting for Bad Debts 315
Percentage of Net Credit Sales Approach 315
Moving Average with a Perpetual System 244
Percentage of Accounts Receivable Approach 316
Aging of Accounts Receivable 317
CHAPTER 6 The Accounts Receivable Turnover Ratio 319
Cash and Internal Control 276 Making Business Decisions: Apple 319
Regal Entertainment Group: Making Business MODULE 2 Accounting for Notes Receivable 322
Decisions 277 Important Terms Connected with Promissory Notes 323
MODULE 1 Accounting and Controlling for

Accelerating the Inflow of Cash from Sales 324
Cash 278 Credit Card Sales 325
Discounting Notes Receivable 326
Cash Equivalents and the Statement of Cash Flows 278
viii Contents
MODULE 3 Accounting for Investments 327 CHAPTER 9

Investments in Highly Liquid Financial Instruments 327 Current Liabilities, Contingencies,
Investments in Stocks and Bonds 329
No Significant Influence 329
and the Time Value of Money 402
Significant Influence 330
Control 330 Starbucks Corporation: Making Business
Valuing and Reporting Investments on the Financial Decisions 403
Statements 332
MODULE 1 Current Liabilities 404
MODULE 4 How Liquid Assets Affect the
Accounts Payable 404
Statement of Cash Flows 333
Notes Payable 405
Current Maturities of Long-Term Debt 407
Taxes Payable 408
CHAPTER 8 Other Accrued Liabilities 408
Operating Assets: Property, Plant, and IFRS and Current Liabilities 409
Equipment, and Intangibles 356
MODULE 2 Cash Flow Effects 410
Nike: Making Business Decisions 357 MODULE 3 Contingent Liabilities 411
MODULE 1 Acquisition of Operating Assets 358 Contingent Liabilities That Are Recorded 412
Product Warranties and Guarantees: Common
Acquisition of Property, Plant, and Equipment 358 Contingent Liabilities That Are Recorded 412
Group Purchase 359 Premiums or Coupons: Other Contingent Liabilities
Capitalization of Interest 359 That Are Recorded 413
Land Improvements 360 Some Lawsuits and Legal Claims Are Contingent
MODULE 2 Depreciation and Disposal of Liabilities That Must Be Recorded 413
Contingent Liabilities That Are Disclosed 414
Operating Assets 361
Contingent Liabilities versus Contingent Assets 414
Straight-Line Method 362
Units-of-Production Method 362 IFRS and Contingencies 414
Accelerated Depreciation Methods 363 MODULE 4 Time Value of Money 415
Comparison of Depreciation Methods 364
Depreciation and Income Taxes 364 Simple Interest 416
Choice of Depreciation Method 364 Compound Interest 416
Change in Depreciation Estimate 365 Interest Compounding 416
Capital versus Revenue Expenditures 366 Present Value and Future Value: Single Amounts 417
Future Value of a Single Amount 417
Environmental Aspects of Operating Assets 368
Present Value of a Single Amount 419
Disposal of Property, Plant, and Equipment 368
Present Value and Future Value of an Annuity 420
Gain on Sale of Assets 369
Future Value of an Annuity 420
Loss on Sale of Assets 370
Present Value of an Annuity 421
IFRS and Property, Plant, and Equipment 370
Solving for Unknowns 421
MODULE 3 Intangible Assets 372
Appendix: Accounting Tools: Using
Balance Sheet Presentation 372 Excel¤ for Problems Involving Interest
Acquisition Cost of Intangible Assets 372
Research and Development Costs 372
Calculations 427
Amortization of Intangibles 373
Intangibles with Finite Life 373
Intangibles with Indefinite Life 374 CHAPTER 10
Goodwill and Impairments 374 Long-Term Liabilities 454
IFRS and Intangible Assets 375
MODULE 4 Cash Flow and Analysis Issues 376 Coca-Cola: Making Business Decisions 455
Analyzing Long-Term Assets for Average MODULE 1 Long-Term Liabilities Including
Life and Asset Turnover 378 Bonds Payable 456
Making Business Decisions: Nike 378
Bonds Payable: Characteristics 457
Collateral 458
Contents ix
Due Date 458 Stock Dividends 512

Other Features 458 Stock Splits 514
Issuance of Bonds 458 MODULE 3 Analysis and Cash Flow Issues 516
Factors Affecting Bond Price 458 What Is Comprehensive Income? 517
Premium or Discount on Bonds 460 What Analyzing Stockholders’ Equity
Reveals About a Firm’s Value 518
MODULE 2 Bond Amortization and Bond
Calculating Book Value When Preferred Stock
Retirement 463 Is Present 518
Effective Interest Method: Impact on Expense 463 Market Value per Share 519
Redemption of Bonds 466 How Changes in Stockholders’ Equity Affect the
Retired Early at a Gain or a Loss 466 Statement of Cash Flows 519
Financial Statement Presentation of Gain or Loss 468 Appendix: MODULE 4 Sole Proprietorships
MODULE 3 Liability for Leases 469 and Partnerships 521
Leases 469
Sole Proprietorships 522
Lease Criteria 469
Typical Transactions 522
Operating Leases 469
Capital Leases 470 Partnerships 523
IFRS and Leasing 473 Investments and Withdrawals 524
MODULE 4 Analysis of Long-Term Distribution of Income 525
Liabilities and Cash Flow Issues 473
Making Business Decisions: Pepsico 474 CHAPTER 12
How Long-Term Liabilities Affect the The Statement of Cash Flows 554
Statement of Cash Flows 476
Walgreens Boots Alliance: Making Business
Appendix: MODULE 5 Deferred Tax 478
Decisions 555
MODULE 1 Purpose and Format for the

CHAPTER 11 Statement of Cash Flows 556
Stockholders’ Equity 500 Purpose of the Statement of Cash Flows 556
Reporting Requirements for a Statement of Cash Flows 556
Southwest Airlines: Making Business Decisions 501
The Definition of Cash: Cash and Cash
MODULE 1 Stockholders’ Equity, Issuance Equivalents 558
of Stock, and Treasury Stock 502 Classification of Cash Flows 559
Stockholders’ Equity on the Balance Sheet 503 Operating Activities 560
How Income and Dividends Affect Retained Earnings 503 Investing Activities 560
Identifying Components of the Stockholders’ Financing Activities 561
Equity Section of the Balance Sheet 503 Summary of the Three Types of Activities 561
Number of Shares 504 Noncash Investing and Financing Activities 561
Par Value: The Firm’s ‘‘Legal Capital’’ 504
Additional Paid-In Capital 505 Two Methods of Reporting Cash Flow from
Retained Earnings: The Amount Not Paid as Dividends 505 Operating Activities 563
IFRS and Stockholders’ Equity 505
MODULE 2 Preparing the Statement of
Preferred Stock 505 Cash Flows Using the Direct Method 567
Issuance of Stock 506 The Accounting Equation and the Statement of Cash
Stock Issued for Cash 506 Flows 567
Stock Issued for Noncash Consideration 507 An Approach to Preparing the Statement of Cash Flows:
Direct Method 568
What Is Treasury Stock? 507 Step 2: Determine the Cash Flows from Operating
Retirement of Stock 509 Activities 569
MODULE 2 Cash Dividends, Stock Dividends, Sales Revenue and Accounts Receivable 569
Interest Revenue 571
and Stock Splits 511
Gain on Sale of Machine 571
Cash Dividends 511 Cost of Goods Sold, Inventory, and Accounts Payable 571
Cash Dividends for Preferred and Common Stock 511
x Contents
Salaries and Wages Expense and Salaries and Wages Take Care When Making Comparisons 624
Payable 572 Understand the Possible Effects of Inflation 624
Depreciation Expense 572
Analysis of Comparative Statements: Horizontal
Insurance Expense and Prepaid Insurance 572
Analysis 625
Interest Expense 573
Income Taxes Expense and Income Taxes Payable 573 Analysis of Common-Size Statements: Vertical
Loss on Retirement of Bonds 573 Analysis 629
Compare Net Income with Net Cash Flow from MODULE 2 Liquidity Analysis 632
Operating Activities 573
Step 3: Determine the Cash Flows from Investing Working Capital 632
Activities 575 Current Ratio 633
Long-Term Investments 575 Acid-Test Ratio 633
Land 575 Cash Flow from Operations to Current Liabilities 634
Property and Equipment 575 Accounts Receivable Analysis 635
Step 4: Determine the Cash Flows from Financing Inventory Analysis 636
Activities 576 Cash Operating Cycle 636
Notes Payable 576 MODULE 3 Solvency Analysis 638
Bonds Payable 576
Debt-to-Equity Ratio 638
Capital Stock 576
Times Interest Earned 638
Retained Earnings 577 Debt Service Coverage 639
Using the Three Schedules to Prepare a Statement of Cash Flow from Operations to Capital
Cash Flows 577 Expenditures Ratio 640
MODULE 3 Preparing the Statement of MODULE 4 Profitability Analysis 641
Cash Flows Using the Indirect Method 579
Rate of Return on Assets 641
Net Income 579 Components of Return on Assets 642
Accounts Receivable 579 Return on Common Stockholders’ Equity 643
Gain on Sale of Machine 579 Return on Assets, Return on Equity, and Leverage 643
Inventory 580 Earnings per Share 644
Accounts Payable 580 Price/Earnings Ratio 645
Salaries and Wages Payable 580 Dividend Ratios 646
Depreciation Expense 580 Summary of Selected Financial Ratios 646
Prepaid Insurance 580
Income Taxes Payable 580
Loss on Retirement of Bonds 580 APPENDIX A
Summary of Adjustments to Net Income under the International Financial Reporting
Indirect Method 580 Standards A-1
Comparison of the Indirect and Direct Methods 581
MODULE 4 Cash Flow Analysis 582
APPENDIX B
Creditors and Cash Flow Adequacy 582
Excerpts from Chipotle Mexican Grill, Inc.
Making Business Decisions: Nordstrom 583 Form 10-K for the Fiscal Year Ended
Stockholders and Cash Flow per Share 585 December 31, 2015 B-1
Appendix: MODULE 5 A Work Sheet Approach
to Preparing the Statement of Cash Flows 586 APPENDIX C
Excerpts from Panera Bread Company Form
CHAPTER 13 10-K for the Fiscal Year Ended December 29,
Financial Statement Analysis 622 2015 C-1
Lululemon Athletica Inc.: Making Business

Decisions 623 Glossary G-1
MODULE 1 Horizontal and Vertical Analysis 624 Index I-1
Watch for Alternative Accounting Principles 624
Preface
Seeing the Forest for the Trees

Accounting is more than just recording business events. It is a powerful tool for invest-
ors, managers, and decision makers. It is a common and powerful tool in every business.
This is even more true for the majority of business students who may never see a journal
entry in their entire professional careers. Using Financial Accounting Information, 10e is
written for these students—people who may not become accountants but still need to
understand why accounting is important.
Connecting to the Big Picture

By demonstrating that accounting is an important decision-making tool, Porter/
Norton’s Using Financial Accounting Information, 10e helps students see the big pic-
ture and understand how accounting is more than recording a series of events. Students
who understand why accounting is important are more motivated to learn and succeed.
This text uses a variety of methods to connect students to the big picture. First, a
hallmark of this text has always been emphasizing why accounting is important through
the use of financial statements and other data for real-world company examples, chapter
openers, and end-of-chapter material, giving students the opportunity to use that data to
apply what they’re learning.
This emphasis is continued through the text’s unique transaction model. Each transac-
tion in the text and the solutions manual is notated using a two-part element that focuses
on the relationships between accounts, their increases and decreases, and the resulting artic-
ulation of the financial statements.
This style provides instructors with maximum flexibility in teaching these key concepts.
1. ‘‘Identify and Analyze’’ This element shows how each transaction affects the income
statement and the balance sheet, with key additional information in an active learn-
ing format. Students learn to Identify and Analyze:
• The type of business activity—operating, investing, or financing.
• The accounts affected by the transaction.
• The financial statement(s) affected by the transaction—balance sheet, income
statement, or both.
2. Transaction-Effects Equation This element shows how each transaction affects the
accounting equation, the balance sheet, the income statement, and stockholders’ equity.
This integrated form of notation has benefits for both students and instructors:
• It provides a clear view of how transactions affect the balance sheet.
• Its separation of balance sheet and income statement sides differentiates these two
equations and shows how the income statement elements are affected.
xi
xii Preface
• Its arrow format better communicates the relationship between net income and
stockholders’ equity.
• When a transaction includes a contra account, this form explains clearly the effect of
this account on the equation.
This model is extended into the end-of-chapter material and CengageNOWv2. In
CengageNOWv2, students are also expected to demonstrate that they understand the
link between transactions and financial statements—consistent with the text.
Other features throughout the book help students make the connection and see the
big picture:
• Focus on highly recognizable companies such as Chipotle, Panera Bread, Nike, and
many others draws students into the chapter.
• Financial statements and notes from Chipotle and Panera Bread allow students to
apply the accounting models they’re learning to real financial data from two compa-
nies in the same industry.
The real-world flavor that demonstrates how accounting can be used to make
decisions continues in the end-of-chapter activities. Decision Cases ask students to
read and interpret financial statements:
• Each chapter highlights a focus company and real company information is used
throughout the narrative and end-of-chapter activities to help students develop their
analytical skills.
• Connect to the Real World features ask students to

read and interpret the financial statements of the chap-
ter’s focus company, applying what they have learned in
the chapter.
Preface xiii
• NEW HOW WILL I USE

ACCOUNTING? feature
demonstrates relevance by
providing students with
examples of how marketing,
sales, and management pro-
fessionals use accounting in
their careers.
• The Ratio Analysis Model guides students

through formulating a question about
a real company, and then calculating,
comparing, and interpreting ratios. Stu-
dents will identify relevant financial infor-
mation, analyze that information, and
make better business decisions based on
what they uncover – powerfully demon-
strating the relevance and importance of
accounting.
xiv Preface
The Business Decision Model moves a step beyond ratios by formulating a question
as a user of financial information, gathering and analyzing the necessary information,
making a decision, and then monitoring that decision. This framework, integrated
throughout the text, provides students with models for honing their analysis and deci-
sion-making skills using real company information in a relevant, applicable context.
Built for Today’s Students

In addition to helping students see the big picture and understand why accounting is im-
portant, Porter/Norton’s Using Financial Accounting Information, 10e is built for
today’s students.
Preface xv
• New to this edition, the unique modular organization breaks the chapter into
logical groupings of concepts, allowing students to absorb the chapter content in
smaller sections for better retention.
• Test Yourself reviews, at the end of each module, provide students with an oppor-
tunity to check their understanding, answer questions, and work brief exercises to
build confidence. Solutions to Test Yourself, located at the end of the chapter, allow
students to check their answers.
• Study Tips in the margins alert students to be on the lookout for certain things.
This could be the similarities between two different concepts or a warning to
watch out for a common pitfall.
CengageNOWv2. CengageNOWv2 for Porter/Norton’s Using Financial

Accounting Information, 10e helps elevate student thinking with unique content that
addresses each stage of the learning process from motivation to mastery. This inte-
grated solution provides tools and resources specifically developed to motivate stu-
dents to learn, apply accounting concepts, and achieve mastery of course content.
In a recent survey of nearly 300 CengageNOW student users:
• Motivation: 77% said that using CengageNOW made them more interested/
engaged in the course.
• Application: 87% said that CengageNOW made completing homework an effec-
tive learning process.
• Mastery: 72% said CengageNOW helped them go beyond memorization and
recall to reach higher levels of learning.
• 76% said the use of CengageNOW helped them better understand why accounting
matters and the importance of accounting in making critical business decisions.
xvi Preface
Motivation: Set Expectations and Prepare

Students for the Course
CengageNOWv2 helps motivate students and get them ready to learn by reshaping their
misconceptions about the introductory accounting course, and providing powerful tools
to engage students.
CengageNOWv2 Start-Up Center. Students are often surprised by the
amount of time they need to spend outside of class working through homework assign-
ments in order to succeed. The CengageNOWv2 Start-Up Center will help students
identify what they need to do and where they need to focus in order to be successful
with a variety of brand new resources.
NEW What Is Accounting? Module ensures students understand course expectations
and how to be successful in the introductory accounting course. This module consists of
two assignable videos: Introduction to Accounting and Success Strategies. The Student
Advice Videos offer advice from real students about what it takes to do well in the course.
NEW Math Review Module, designed to help students get up to speed with neces-
sary math skills, includes math review assignments and Show Me How math review
videos to ensure that students have an understanding of basic math skills, including:
• Whole number operations
• Decimal operations and rounding
• Percentage operations and conversion
• Fraction operations
• Converting numbers expressed in one form to a different form
• Positive and negative numbers
• Ratios and averages
NEW How to Use CengageNOWv2 Module focuses on learning accounting, not
on a particular software system. Quickly familiarize your students with Cengage-
NOWv2 and direct them to all of its built-in student resources.
Motivation: Engage Students and Better Prepare Them for Class.
With all the outside obligations accounting students have, finding time to read the text-
book before class can be a struggle. Point students to the key concepts they need to
know before they attend class.
Video: Tell Me More. Short Tell Me More lecture activities explain the core con-
cepts of the chapter through an engaging auditory and visual presentation. Available
both on a stand-alone basis or as an assignment, they are ideal for all class formats—
flipped model, online, hybrid, face-to-face.
Preface xvii
Students don’t want to waste time going over concepts that they have already mastered.
With the NEW Adaptive Study Plan, they can focus on learning new topics and fully
understanding difficult concepts.
NEW Adaptive Study Plan in CengageNOWv2 is an assignable/gradable study
center that adapts to each student’s unique needs and provides a remediation path-
way to keep students progressing. With the NEW Adaptive Study Plan, they can
focus on learning new topics and fully understanding difficult concepts.
How Does It Work?

Step 1: Students take a chapter-level quiz consisting of random questions that cover
both conceptual and procedural aspects of the chapter.
Step 2: Feedback is provided for each answer option explaining why the answer is
right or wrong.
Step 3: Based on the quiz results, students are provided a remediation path that
includes media assets and algorithmic practice problems to help them improve their
understanding of the course material.
Instructors may use prerequisites that require students to achieve mastery in the Adapt-
ive Study Plan before moving on to new material.
Using the Adaptive Study Plan, students may also review
and check their knowledge with the new Practice! Activities. “The new Adaptive Study Plan offers the beneﬁt
These items (generally one per learning objective) build appli- of customization coupled with remediation.”
cation skills by allowing students to complete practice problems – Jennifer Schneider,
and ‘‘Try Another Version.’’ professor at University of North Georgia
xviii Preface
Application: Provide Help Right When Students

Need It
Students often complete homework at odd times. And when they use CengageNOWv2,
they get help right when they need it.
• Check My Work Feedback provides general guidance and hints as students work
through homework assignments.
• NEW Check My Work Feedback in CengageNOWv2 now only reports on what
students have actually attempted, which prevents them from ‘‘guessing’’ their way
through assignments.
Preface xix
• Post-Submission Feedback is available after the assignment has been submitted

and provides a detailed description of how to arrive at the solution.
• Video: Show Me How. Created for the most frequently assigned end-of-chapter
items, NEW Show Me How problem demonstration videos provide a step-by-step Show
model of a similar problem. Embedded tips and warnings help students avoid com- me
mon mistakes and pitfalls.
how
Mastery: Help Students Go Beyond

Memorization to True Understanding.
Students often struggle to understand how concepts relate to one another. For most stu-
dents, an introductory accounting course is their first exposure to both business transac-
tions and the accounting system. While these concepts are already difficult to master
individually, their combination and interdependency in the introductory accounting
course often pose a challenge for students.
• Mastery Problems. New Mastery Problems enable you to assign problems and
activities designed to test students’ comprehension and mastery of difficult concepts.
Can they apply what they have learned to a new problem set that offers a twist?
• Decision Cases. Decision Cases require students to read and interpret financial
statements from real-world companies—applying learned concepts to real firms and
real situations.
Enhanced Reporting Capabilities. CengageNOWv2’s new Gradebook Ana-

lytics allow instructors unprecedented insight into classroom performance. This includes:
• classroom performance versus a variety of objectives, including Learning Objectives,
AACSB, Bloom’s, and more;
• classroom performance on specific items; and,
• classroom performance versus national scores.
xx Preface
Chapter-by-Chapter Changes
Chapter 1
• Introduced modular approach to chapter topics, including Test Yourself with
Review, Question, and Apply at the end of each module.
• Introduced one of two new flagship companies, Chipotle Mexican Grill, Inc., as the
focus company for Chapter 1.
• Revised Exhibits 1-1, 1-3, 1-7, and 1-8 to reflect new flagship company, Chipotle
Mexican Grill, Inc.
• Introduced new feature: How Will I Use Accounting?
• Revised ‘‘Connect to the Real World’’ feature (Real World Practice in prior edition)
to reflect new flagship company.
• Updated end-of-chapter material: E1-9, E1-16, P1-8, P1-9, P1-8A, and P1-9A.
• Revised DC1-1 and DC1-2 to reflect new flagship company, Chipotle Mexican
Grill, Inc.
• Revised DC1-3 to reflect new flagship companies, Chipotle Mexican Grill, Inc., and
Panera Bread Company.
• Added Answers to ‘‘Questions’’ and ‘‘Apply’’ at the end of the chapter for all modules.
• Added Answers to ‘‘Connect to the Real World’’ at the end of the chapter.
Chapter 2
• Introduced one of two new flagship companies, Panera Bread Company, as the
focus company for Chapter 2.
• Revised Exhibits 2-1, 2-2, and 2-3 to reflect new flagship company, Panera Bread
Company.
to reflect new flagship company.
• Revised Ratio Decision and Business Decision Models for the Current Ratio to
reflect new flagship company.
• Revised Ratio Decision Model for the Profit Margin Ratio to reflect new flagship
company.
• Revised Exercise 2-3 to reflect Regal Entertainment Group.
• Updated end-of-chapter material: P2-10 and P2-10A.
• Revised DC2-2 to reflect new flagship company, Panera Bread Company.
Chapter 3
• Introduced Vail Resorts, Inc., as the new focus company for Chapter 3.
to reflect new focus company, Vail Resorts, Inc.
• Revised E3-8 and E3-17 to reflect new focus company, Vail Resorts, Inc.
• Revised DC3-1 to reflect new flagship companies, Chipotle Mexican Grill and
• Updated end-of-chapter material: DC3-3.
Preface xxi
Chapter 4
• Updated the chapter opener with the most current information available and replaced
the financial statements from Nordstrom as the focus company for Chapter 4.
• Revised section on the revenue recognition principle to conform to new accounting
standard.
• Updated ‘‘Connect to the Real World’’ (Real World Practice in prior edition) for
new information for Nordstrom, Inc.
• Updated end-of-chapter material: DC4-2 and DC4-3.
• Revised DC4-1 to reflect new flagship companies, Chipotle Mexican Grill and
Chapter 5
the financial statements from Gap Inc. as the focus company for Chapter 5.
• Revised Net Sales of Merchandise section to conform to new FASB standard on rev-
enue recognition, ‘‘Revenue from Contracts with Customers.’’
• Revised coverage of purchase returns and allowances to conform to coverage of sales
returns and allowances.
• Revised coverage of purchase discounts to illustrate the net method of recording.
• Updated Example 5-14 for Winnebago Industries’ LIFO reserve.
• Revised Exhibit 5-9, substituting a partial statement of cash flows for Chipotle Mex-
ican Grill, Inc.
new information for Gap Inc.
• Updated Ratio Model for the Gross Profit Ratio for new information available.
• Updated Ratio Model for the Inventory Turnover Ratio for new information available.
• Deleted Exercise requiring detailed analysis for purchase discounts, returns, and
allowances.
• Updated end-of-chapter material: E5-15, P5-2, P5-5, P5-8, P5-14, P5-2A, P5-5A,
P5-8A, P5-14A, DC5-2, and DC5-3.
• Revised DC5-1 to reflect new flagship companies, Chipotle Mexican Grill, Inc. and
• Deleted Decision Case on sales returns and allowances.
• Revised DC5-9 to integrate the concept of ethics in accounting with the practice of
modeling ethical decision making.
Chapter 6
• Introduced Regal Entertainment Group as the new focus company for Chapter 6.
xxii Preface
new flagship company, Panera Bread Company.
• Revised Exhibits 6-1, 6-3, and 6-4 to illustrate statements and reports for new focus
company, Regal Entertainment Group.
• Updated end-of-chapter material: DC6-2.
• Added Answers to ‘‘Questions’’ and ‘‘Apply’’ at the end of the chapter for all
modules.
Chapter 7
the financial statements from Apple Inc. as the focus company for Chapter 7.
new information for Apple Inc.
• Updated Ratio Decision Model for the Accounts Receivable Turnover Ratio with
new information available.
• Revised E7-5 to reflect Nike.
• Updated end-of-chapter material: P7-3, P7-3A, DC7-1, DC7-2, and DC7-3.
modules.
Chapter 8
• Updated the chapter opener with the most current information available and
replaced the financial statements from Nike as the focus company for Chapter 8.
• Updated Ratio Decision Model with new information for Nike and Foot Locker.
• Updated end-of-chapter material: DC8-1 features Panera Bread Company, and
DC8-2 reflects Panera Bread Company and Chipotle.
modules.
Chapter 9
the financial statements from Starbucks as the focus company for Chapter 9.
• Changed Exhibit 9-4 concerning contingent liabilities.
• Updated P9-2 for Burger King, P9-3 for Brinker, P9-2A for McDonald’s, and
P9-3A for Darden Restaurants.
• Changed DC9-1 to Panera Bread Company and Chipotle.
• Updated DC9-2 for Caribou Coffee, DC9-3 for Walmart, and DC9-4 for
Hewlett-Packard.
Preface xxiii
Chapter 10
• Updated the chapter opener with the most current information available and replaced the
financial statements from Coca-Cola and Pepsi as the focus companies for Chapter 10.
• Updated Ratio Decision Model with new information for Coca-Cola and Pepsi.
• Eliminated references to extraordinary items because of FASB pronouncement.
• Updated P10-9 on Walgreens and P10-9A on Boeing.
• Retained the section on leasing but noted pending FASB pronouncement. This module
can be skipped by instructors and it will not affect other portions of the chapter.
• DC10-1 features Panera Bread Company, and DC10-2 reflects Panera Bread Com-
pany and Chipotle. DC10-3 has been updated for Pepsi.
Chapter 11
the financial statements from Southwest Airlines as the focus company for Chapter 11.
• Updated end-of-chapter material: P11-7 for Southwest Airlines and P11-7A for Costco.
• DC11-1 features Panera Bread Company and Chipotle, and DC11-2 highlights
• Made substantial changes to Interactive Problem to eliminate leasing as one of the
alternatives. Problem is now more straigtforward.
Chapter 12
the financial statements of the focus company for Chapter 12.
• Deleted exhibit detailing cash flow and net income differences for four companies.
new flagship company Chipotle Mexican Grill, Inc., and for new information for
Walgreens Boots Alliance.
• Updated Ratio Decision Model for the Cash Flow Adequacy Ratio with new
information available.
• Updated end-of-chapter material: E12-4, DC12-2, and DC12-3.
• Revised DC12-1 to reflect new flagship companies, Chipotle Mexican Grill, Inc.,
and Panera Bread Company.
Chapter 13
• Updated the chapter opener with the most current information available and
replaced the financial statements from lululemon athletica inc. as the focus
company for Chapter 13.
xxiv Preface
• Updated Exhibit 13-1, with the most current information available for lululemon
athletica inc.
new information for lululemon athletica inc. and for new flagship company Chipotle
Mexican Grill, Inc.
• Deleted Appendix on Reporting and Analyzing Other Income Statement Items and
end-of-chapter material to conform to new accounting standard to no longer allow
recognition of extraordinary items on the income statement.
• Updated Review Problem for the most current information available for lululemon
athletica inc.
• Updated end-of-chapter material: E13-5, E13-6, E13-7, E13-8, and E13-11.
• Revised DC13-1 and DC13-2 to reflect new flagship company, Chipotle Mexican
Grill, Inc.
• Revised DC13-3 to reflect new flagship companies, Chipotle Mexican Grill, Inc.,
and Panera Bread Company.
Additional Instructor and Student

Supplements
Instructor’s Manual
The Instructor’s Manual contains detailed lecture outlines, lecture topics, and sugges-
tions for classroom activities. The chapter activities in the Instructor’s Manual have been
analyzed and assigned the same set of objectives that are used in the Solutions Manual
and the Test Bank (available on the Instructor Companion website).
Solutions Manual
The Solutions Manual, by the text authors, consists of solutions to all the end-of-chapter
material keyed to learning objectives and using the transaction effects equation found in
the text. (Available on the Instructor Companion website.)
Test Bank
The Test Bank contains a comprehensive set of test items to meet every assessment need
from brief exercises to problems and decision cases. The Test Bank is offered in Cognero.
Cengage Learning Testing Powered by Cognero is a flexible, online system that
allows instructors to:
• author, edit, and manage test bank content from multiple Cengage Learning solutions
• create multiple test versions in an instant
• deliver tests from your LMS, your classroom, or wherever you want
Excel¤ Templates
Selected problems in each chapter may be solved on a Microsoft Excel spreadsheet to
increase awareness of basic software applications. Just download the Excel spreadsheets
for homework items that are identified by icons in the text. (Excel templates are available
on the Student Resources page of the product website. Password-protected Instructor
solutions are available on the Instructor Companion website.)
Preface xxv
PowerPoint¤ Slides
Student PowerPoint Slides, a smaller version of the Instructor PowerPoint Lectures,
allow students to get ready for upcoming lectures, quizzes, homework, and exams with
core material needed for chapter study. (Student PowerPoint Slides are available on the
Student Resources page of the product website. More detailed, password-protected
Instructor PowerPoint Slides are available on the Instructor Companion website.)
Student Web Resources

Chapter-by-chapter quizzes, topical discussions, updates on IFRS integration, and more
are available. These items help reinforce and shed light on text topics. Discover more by
logging into the text website. Visit www.cengagebrain.com.
xxvi Preface
Acknowledgments
Among those who have served as reviewers for this text are the following, to whom we are grateful for their insights:
Scott Ballantyne Carolyn Galantine Wendy K. Potratz

Alvernia University Pepperdine University University of Wisconsin Oshkosh
Cindy Bleasdale Andy Garcia Cindy Powell
Hilbert College Bowling Green State University Southern Nazarene University
Bradley Boercker Amy Giesler Robert Rusnacko
Fletcher College, Lone Star College Butler University North Hennepin Community College
Melba Boling Joohyung Ha Monica Salomon
Virginia Highlands Community College University of San Francisco University of West Florida
Bryan Bouchard Ben Johnson Geeta Shankar
Southern New Hampshire University University of Evansville University of Dayton
Amy Bourne Benjamin W. Johnson Gregory Sinclair, CPA
Oregon State University University of Evansville San Francisco State University
Scott Boylan Kailani Knutson Jere Smith, MBA, PhD (ABD)
Washington and Lee University Porterville College Avila University
Justin Breidenbach Christopher Kwak Ahmad Sohrabian
Ohio Wesleyan University De Anza College California State Polytechnic University,
Amy Browning Brandon Lanciloti Pomona
Ivy Tech Community College Freed-Harmon University Leslie ‘‘Andy’’ Speck
Teresa Buckner Greg Lauer Embry-Riddle Aeronautical University
West Virginia Wesleyan College North Iowa Area Community College Jason Stanfield
Rachel Butts Natasha Librizzi Purdue University
Embry-Riddle Aeronautical University Milwaukee Area Technical College George Starbuck
Edward J. Bysiek Anthony Masino McMurry University
St. Bonaventure University East Tennessee State University Ronald Strittmater
Allen Cherry Keith McBride North Hennepin Community College
Loyola Marymount University Northeast Alabama Community College John Surdick
Cheryl Corke Allison McLeod Xavier University
Genesee Community College University of North Texas Steven Thoede
Louann Cummings Tammy McWherter Texas State University, San Marcos
The University of Findlay Mid-Continent University Robin Thomas
Terena Dampier Michael Meyer North Carolina State University
Embry-Riddle Aeronautical University University of Notre Dame MaryBeth Tobin
Dana D’Angelo Jacqueline Michaud Bridgewater State University
Drexel University Alvirne High School Greg Tondi
Dori Danko Paul San Miguel New Jersey City University
Grand Valley State University Western Michigan University Melanie Torborg
Robert Derstine Don Minyard Globe University/Minnesota School of
West Chester University of Pennsylvania University of Alabama Business
Patricia Dorris-Crenny Jennifer Morton Jeannette Toth
Villanova University Ivy Tech Community College University at Buffalo
Gerald Doyle, CPA Rania Mousa Mark Ulrich
Mountwest Community & Technical University of Evansville St. John’s University
College Albert Nagy Dale Walker
James Emig John Carroll University Harding University; Heifer
Villanova University Ramesh Narasimhan International Education Program
John A. Falk Montclair State University Roddrick West
DeSales University Sy Pearlman Everest College, Dallas
Lucile Faurel California State University Long Beach Wendy Wilson
Arizona State University Janice Pitera Texas Christian University
Kenneth W. Gaines SUNY-Broome Bijan Zayer
East-West University DeVry University
Throughout previous editions, many other individuals have contributed helpful suggestions that have resulted in many
positive changes. Although they are not cited here, we remain grateful for their assistance.
Preface xxvii
We also wish to thank Domenic Tavella, Carlow University. His help with supplements and verification aided us greatly.
We are grateful to Cenveo Publisher Services for their invaluable production assistance. Finally, we are grateful to the editorial,
marketing, media, and production staffs at Cengage Learning, primarily Matt Filimonov, Danny Celenza, Jonathan Gross,
Andrea Meyer, Robin LeFevre, Sally Nieman, and Tim Bailey for their extensive help with the tenth edition and its
supplements.
Gary A. Porter
Curtis L. Norton
September 2016
About the Authors
Gary A. Porter is currently a Distinguished Lecturer at Drake University. He

earned Ph.D. and M.B.A. degrees from the University of Colorado and his B.S.B.A.
from Drake University. As Professor of Accounting, Dr. Porter served as Department
Chair and taught at numerous universities. He has published in the Journal of
Accounting Education, Journal of Accounting, Auditing & Finance, and Journal
of Accountancy, among others, and has conducted numerous workshops on the subjects
of introductory accounting education and corporate financial reporting.
Dr. Porter’s professional activities include experience as a staff accountant with
Deloitte & Touche, a participant in KPMG Peat Marwick Foundation’s Faculty
Development program, and a leader in numerous bank training programs. He has won
an Excellence in Teaching Award from the University of Colorado and Outstanding
Professor Awards from both San Diego State University and the University of Montana.
He served on the Illinois CPA Society’s Innovations in Accounting Education Grants
Committee, the steering committee of the Midwest region of the American Accounting
Association, and the board of directors of the Chicago chapter of Financial Executives
International.
Dr. Porter currently serves on the National Advisory Council for Drake University’s
College of Business and Public Administration. He is a member of the American
Accounting Association and Financial Executives International.
Curtis L. Norton is currently a Clinical Professor at Arizona State University.

He is also a Professor Emeritus at Northern Illinois University in Dekalb, Illinois, where
he has taught since 1976. Dr. Norton received his Ph.D. from Arizona State University
and an M.B.A. from the University of South Dakota. Dr. Norton earned the University
Excellence in Teaching Award at NIU and has published in The Accounting Review, The
Journal of Accounting Education, CPA Journal, and other journals. A member of the
American Accounting Association and Financial Executives International, he also con-
sults and conducts training for private and governmental authorities, banks, utilities, and
others.
xxviii
Another random document with
no related content on Scribd:
Fig. 2
J, Mechanism of Lever-Action Repeating Rifle; 2, Breechblock; 7,
Cocking Lever; 19, Firing Pin, Front; 21, Firing Pin, Rear; 29, Guard
Finger Lever; 34, Hammer; 36, Lifter; 37, Locking Slide; 45, Mainspring
Plunger; 46, Mainspring Plunger Seat; 63, Trigger
K, Mechanism of Falling-Breechblock, Single-Shot Rifle; L, Gold-Bead
Front Sight; M and N, Combination Rear Aperture or Tang Sight, Raised
and Folded; O, P, Q, Folding-Leaf Rear Sight, Used as V-Crotched Sight,
Straight-Bar Sight, and Folded Flat to Barrel
For outdoor target shooting the .22-caliber, long-rifle cartridge will

give very accurate results up to 100 yd. The standard target has a
bull’s-eye measuring 6 in. in diameter for 150 yd. Shooting may be
tried for a while at a fixed range, then the target may be moved to an
unknown distance and angle, and the marksman can try his hand at
estimating distance. Instead of changing his sights at varying
distances, the sportsman should learn how to estimate the distance
of the mark and the approximate elevation of the sights to land the
bullet within the circle. This is valuable practice for good shooting in
the woods.
After considerable practice at the stationary target, quick firing
may be varied by rigging up a sliding trolley arrangement, like that
shown in the page illustration. It is easily made by setting up two
poles, properly braced, one about 30 ft. tall, and the other about 10
ft., spaced 30 ft. apart. Between the poles, about 8 ft. from the
ground, stretch a length of stiff telephone wire, and make a wooden
target block W, with a metal sheave wheel, so that it may slide freely
along the wire. On the tallest post, a little above the wire, fasten a
metal pulley, Z, and at the top of the pole place a sash pulley. Then
attach a stout cord to the target block, reeve it through the two
pulleys, and attach a sandbag, or other weight, to the end of the
cord, On the shorter post, a latch, or trigger, Y, is fastened to hold the
target, which is released by pulling a string. With this easily
constructed device, much valuable practice may be had, for if the
pole is fairly high, the weight will cause the target to slide as rapidly
as the average game bird travels. In using this moving target, just as
good practice is obtained with a .22-caliber repeater as with a high-
power gun. In fact, the high-velocity ammunition should be used only
on a regular range, or where a suitable backstop is erected to stop
the high-power bullets. Such a backstop may be constructed of
heavy lumber, like old railroad ties, in the form of a crib, which is
filled in with sand or earth. When a natural background, such as a
mound or hill, is at hand, this may be used with safety, but a rocky
hillside is not satisfactory, for it is likely to deflect the bullets, and
may cause injury through stray shots.
Fig. 3
As our antlered game, like the moose, the Virginia deer, the
caribou, and the elk, are held in higher esteem than other American
big-game animals, a few practical hints on where to sight, may serve
to bring better luck to the sportsman who has yet to bring in his first
head. The shoulder shot, shown in the rectangular sketch at S, T
and U, is taken by the experienced hunter whenever possible, in
preference to any other. It is the object of this shot to break the
shoulder joint, and thus prevent use of the forelegs. It is a vital shot,
also, because there is a good chance of the bullet passing through
either the heart or lungs, which will drop the game in its tracks. This
is the most effective of all shots, and as the hunter more often draws
a bead while the game is running away, the shoulder shot is used
more than any other. The exact spot, at which the aim should be
taken, depends upon the distance of the animal, and its rate of
movement. If on the run and the range of 100 yd. or more, the sight
should be taken at the point S. If less than this distance, sight at T,
and, if the animal is standing still, take deliberate aim at U, within the
dotted inclosure. This area represents what big-game hunters call
the vital zone, and a soft-nose bullet, placed anywhere within this
spot, will be certain to stop the game, often dropping it on the spot. It
is possible to land a bullet in a vital spot at distances up to 500 yd.
with a high-power rifle, but it is very likely that the game will be
wounded only, and may escape to die a lingering death. In taking
long shots at big game on the run, the sight should be taken well
forward and a trifle higher than the marks given, since the hunter
must allow for the trajectory of his arm and the time the bullet takes
to reach its mark.
The front shot, shown at the right, has as its object to hit the heart
or lungs. It is a useful shot, and the sight is taken at the cross
indication on the breast. The head shot, shown in the circle, is a
brain shot, and is used only by the experienced hunter, when it is
difficult to land a shoulder or front shot. As the brain is well up to the
top of the head, the best point of aim is shown at V, midway between
the eyes and a trifle higher than their centers. This shot is most
effective when the hunter stands a trifle above the game, or shoots
when the game is charging head down. If on a level, aim just above
the eye, and if close to the game, land the bullet just below the eye.
The ear shot, as indicated by the cross, is taken at close quarters,
and the point to sight for is the inside of the ear at its base.
A good rifle will give a lifetime of service, and the sportsman
should take care of it. The best time to clean a firearm of any kind is
as soon after shooting as possible, for the powder residue is then
fresh and moist, and is more easily and quickly removed. Black
powder can be removed with a wet rag, but smokeless powder not
only leaves a little powder residue, but also a film of gummy residue
on the steel which is not apparent to the eye. Common washing
soda, dissolved in water to make a saturated solution, is used to
remove it. Any of the ready-prepared nitro solvents are good for
cleaning the rifle. A good way to clean a rifle is to use strips of cotton
flannel, cut into squares of such size that they will fit snugly, but may
be easily pushed through the barrel on the head of the metal
cleaning rod. Always clean a rifle from the breech, if possible, by
resting the muzzle on a few folded papers on the floor. Push a
couple of dry wipers down to the floor to remove the carbon residue.
Then saturate another square of cloth with the nitro solvent, and
carefully swab out the barrel, turning the rod so that it will follow the
spiral rifling. Repeat the operation two or three times; then take a
clean wiper, moistened with the solvent, and repeat until the barrel is
well lubricated with the cleaning fluid. The barrel should be well oiled
with any good, thick oil, or liquid vaseline. The lock mechanism of
the arm should be kept clean and very lightly lubricated with any
good thin oil, and the gunstock polished with linseed oil.
Camera for Taking Pictures from a
Kite
By CHARLES I. REID
When watching a kite flying at a considerable height one frequently

wonders how the landscape appears from such a viewpoint as
would be possible from a kite. Few of us can have the experience of
a ride in an aeroplane, but it is quite possible to obtain a view from
the kite, by proxy as it were, through the use of a kite camera. A kite
of large dimensions would be necessary to carry an ordinary camera
taking pictures of fair size, hence it is necessary to devise one of
lighter construction, so that a kite of moderate size may carry it to a
height of several hundred feet. Such a camera is shown in the
illustration attached to a box kite. Details of construction are shown
in the smaller sketches.
A camera consists, briefly, of a light-proof box, with a lens at one
end and a sensitive plate or film at the other. For a kite camera, a
single achromatic lens will suit the purpose. Such a lens is not
expensive and may be taken from a small camera. It must be
obtained before the camera is begun, since the size of the latter is
dependent upon the focal length of the lens and the size of the
picture to be made. A camera taking pictures 2 in. square is
satisfactory for kite photography, and if it is desired to enlarge the
pictures, this may be done in the usual manner.
The box of the camera is made cone-shaped in order to reduce
the weight and air resistance. Its sides are of light-weight, stiff
cardboard, reinforced at the corners to insure that no light will enter.
The back of the camera is a tight-fitting cover of cardboard, having
the same measurements as the picture to be taken. The lens is fitted
to an intermediate partition, as shown in the sketch. It is necessary
to determine the focal length of the lens and to set it at a distance
from the inner side of the cardboard back of the camera—the film
surface—so that it will focus properly for photographing distant
objects.
The Kite Camera Offers a Diversion in Photography, and Has Practical
and Commercial Uses as Well. The Camera Shown Is of Light Weight,
Simple Construction, and Produces Film Exposures Two Inches Square.
A Sectional View of Its Construction is Given at the Left, and the Details
of the Shutter Device at the Right
The front is provided with a circular opening of a size large enough

not to obstruct the view of the lens. A shutter made of thin
pressboard is fitted over the opening, as shown in the sketch at the
right. A slit is cut in the shutter through which light is admitted in
making the exposure as the shutter is drawn back. The size and
width of the slit regulates the exposure, and a few trials must be
made to determine the most suitable speed of exposure for the lens
used. The shutter is pivoted at its lower end and drawn back by a
rubber band. A string, to which a time fuse is attached, controls the
releasing of the shutter to make the exposure. The string holds the
shutter closed against the pull of the rubber band until the fuse burns
up to the string, severing it. The fuse must be long enough to enable
the kite to attain a suitable height before the string is burned. When
the shutter has been set, and the fuse attached ready for lighting, the
camera may be taken into the dark room for loading. A piece of film,
cut to the proper size, is placed carefully into the light-proof sliding
cover, as with a film pack, the sensitive side, of course, being placed
nearest the lens.
The camera is attached to the kite securely at the middle, as
shown, so that when the kite is in flight a view nearly straight down
will be obtained. When all is in readiness the fuse is lighted and the
kite started on its flight. By timing experimental flights, the required
length of fuse may be determined in order to permit the kite to attain
the desired height at the time of exposure.
The kite used for taking pictures from the air should be large
enough to carry the kite easily. One of the box type illustrated is
satisfactory, although other types may be used. A kite camera for the
amateur has great possibilities for experimentation, but requires care
in construction and a reasonable knowledge of photography. To the
person willing to master the details, kite photography offers a
pleasurable diversion as well as practical uses in photographing
plots of ground, groups of buildings, manufacturing plants, and other
subjects which cannot be photographed by other methods.
How to Make a Canteen
Two sheet-metal plates that are well nickelplated may be joined
and provided with a suitable opening, to form a useful canteen for
the camper or hiker. The illustration shows such a convenience fitted
with a shoulder strap ready for use.
It was made as follows: Two good-quality pie plates were soldered
at their edges to form a water-tight container. An opening was cut
into the edge and a screw cap, taken from a metal-polish can, was
fitted carefully and soldered over the opening. A wire was soldered
at each side of the screw cap, providing loops for the snap buckles
of the shoulder straps.—J. R. Townsend, Itasca, Texas.
Mixing Stick That Breaks Up Lumps
In mixing paint, or paste, it is desirable that all lumps be broken up
quickly, and that the forming of lumps be prevented as much as
possible. A mixing stick that will aid in this process is made as
follows: Procure a stick of wood, that will take nails without cracking,
and cut it about 1 in. square and 12 in. long. On one side, beginning
¹⁄₂ in. from the end, drive five 8-penny finishing nails, 1 in. apart. On
the next side, repeat the process, beginning the nails 1 in. from the
end. Place similar nails on the other two sides, spacing them to
offset those on the other sides. The nails cause a thorough mixing of
the paste, or paint, prevent the forming of lumps of any considerable
size, and by careful stirring will break up all lumps in the mixture.—
Edwin R. Mason, Danville, Ill.
Tin Can on Rod for Picking Fruit
The best apple is usually a little beyond reach, as every boy

knows, so I fitted a tin can, cut as shown in the sketch, to a pole and
can easily pick the apple that I want. The device is useful for picking
many varieties of fruit, and prevents damaging it by a fall. For picking
apples or other fruit from the upper branches of trees, where it is
almost impossible to reach by the use of a ladder, the tin-can fruit
picker is especially handy. The small sketch shows how the edges of
the can should be cut to afford the best grip on the stem, making it
possible to cut the twig from above or below.—T. A. Charles,
Hamilton, Ont.
The Shotgun and How to Use It
By STILLMAN TAYLOR
PART I—How a Shotgun is Made
Hunting and fishing have always held the most important places in
the field of sport. Primitive man was an expert hunter and a
skilled fisherman. He had to be in order to secure food and skins,
and while but few men are now dependent upon this method of
getting a living, the call of the outdoor world is still heard by millions
of men and women. This, then, may be reckoned the inheritance
which our primitive ancestors have bequeathed to every man, and
every man will find health and recreation through it. It would be
interesting to begin this chapter at the start and set down the history
of weapons, trace the evolution of the hunting arm all the way from
the bow down to the modern hammerless shotgun, but as this is a
practical article on how to pick out a good gun and the knack of
using it, only modern weapons will be discussed. While the novice
need not know the detailed process of constructing a shotgun, he will
find it an advantage to know something of the way in which a
serviceable weapon is manufactured, for with this knowledge he is
better qualified to pick out a suitable arm for his own particular use.
The Side-Plate Lock Is a Development of the Old Hammer Lock with Striker
Inside
The frame of a shotgun—that is, the part to one end of which the
barrels are affixed, the stock being bolted to the other—contains the
lock mechanism, and that the weapon may give the most satisfaction
for many years, the stock must be of good quality, of the exquisite
temper, and the bolting mechanism—securing the barrels to the
frame—must be simple, yet strong and serviceable. For the frame, a
solid drop forging is milled to make a shell into which the working
mechanism is fitted, and two types of frames are used in making the
modern shotguns. The side-plate lock is really a development of the
old hammer lock, with the striker inside. This lock is preferred by
some shooters because of its neat and graceful lines, and some
manufacturers use this type because it enables them to make use of
a lighter frame.
The Box Type of Frame Likewise Has Its Champions and Possesses Its
Advantages
The Cocking Hook Is an Ingenious Device, with Variations Used on Different

Makes of Arms
The box type of frame likewise has its champions and possesses
certain advantages. Certainly it makes a strong and rigid frame, and
for inexpensive weapons it would be difficult to improve upon. While
its square, boxlike form is not graceful in line, it enables the maker to
use a spiral, or coil, spring instead of a flat spring for operating the
locks, which is an advantage. In brief, the merits of both types may
be summed up in this fashion: The use of the box type of lock
enables the maker to turn out a better quality of gun at a low price,
but in the case of a well-made gun, selling for a reasonable figure,
there is very little choice between them so far as dependability and
long service are concerned. Both are much used by manufacturers
of the finest weapons, hence the shooter may pick out the one which
best suits his fancy.
A Hammerless Gun with Roller Bearings to Overcome the Short Leverage

and Make It Open and Close Easily
The Cocking Mechanism of the Hammerless
The locks of the hammerless shotgun work inside of the frame or

lock, and are cocked by an ingenious little mechanism operated by
the movement of the barrels when they are opened. The Anson &
Deely cocking mechanism is one of the oldest and best of these
devices, and is still used on many American as well as European
arms. The levers of this mechanism are hung with pivots in the end
of the frame—one end projecting into the fore end and the opposite
end resting beneath the hammer toe. As the gun is “broken,” or
opened, it presses down the forward end of the cocking lever, and
the other end rises and pushes the hammers into the cocked
position. This is the principle upon which all cocking devices are
constructed, and while it works smoothly and is so simple that it is
not likely to get out of order, it is mechanically weak, owing to the
short frame required to secure adequate leverage. Perhaps one of
the best variations of the Anson & Deely device is one employed by
an American manufacturer who makes use of a rod running through
the frame from the fore end to the hammer. To each end of this rod is
attached a crank, so hung that as one crank is depressed the other
rises and pushes the hammer to the cock position as the barrels are
swung to open the gun.
A Lug is Forged on the End of Each Barrel, and When Fitted Together They
are Brazed

PDF Using Financial Accounting Information The Alternative To Debits and Credits Gary A Porter Ebook Full Chapter

Uploaded by

Copyright:

Available Formats

You might also like

PDF Using Financial Accounting Information The Alternative To Debits and Credits Gary A Porter Ebook Full Chapter

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PDF Using Financial Accounting Information The Alternative To Debits and Credits Gary A Porter Ebook Full Chapter

Uploaded by

Copyright:

Available Formats

Using Financial Accounting

Information: The Alternative to Debits

Using accounting & financial information : analyzing,

About Financial Accounting A. Rehwinkel

Financial accounting Duchac

Financial accounting and reporting Elliott

Financial Times Guide to Using the Financial Pages 5th

Financial Accounting Robert Libby

Horngren’s Financial and Managerial Accounting, the

Horngren's financial & managerial accounting: the

Cengage Learning products are represented in Canada by

To learn more about Cengage Learning Solutions, visit www.cengage.com

CHAPTER 2 Financial Statements and the Annual Report 50

CHAPTER 5 Inventories and Cost of Goods Sold 208

CHAPTER 11 Stockholders’ Equity 500

APPENDIX A International Financial Reporting Standards A-1

APPENDIX B Excerpts from Chipotle Mexican Grill, Inc. Form 10-K

CHAPTER 1 Why Should Accountants Be Concerned with Ethics? 22

MODULE 1 The Nature of Business 4 CHAPTER 2

MODULE 1 Accounting and Controlling for

MODULE 3 Accounting for Investments 327 CHAPTER 9

Due Date 458 Stock Dividends 512

MODULE 1 Purpose and Format for the

Lululemon Athletica Inc.: Making Business

Seeing the Forest for the Trees

Connecting to the Big Picture

• Connect to the Real World features ask students to

• NEW HOW WILL I USE

• The Ratio Analysis Model guides students

Built for Today’s Students

CengageNOWv2. CengageNOWv2 for Porter/Norton’s Using Financial

Motivation: Set Expectations and Prepare

How Does It Work?

Application: Provide Help Right When Students

• Post-Submission Feedback is available after the assignment has been submitted

Mastery: Help Students Go Beyond

Enhanced Reporting Capabilities. CengageNOWv2’s new Gradebook Ana-

Additional Instructor and Student

Student Web Resources

Scott Ballantyne Carolyn Galantine Wendy K. Potratz

Gary A. Porter is currently a Distinguished Lecturer at Drake University. He

Curtis L. Norton is currently a Clinical Professor at Arizona State University.

For outdoor target shooting the .22-caliber, long-rifle cartridge will

When watching a kite flying at a considerable height one frequently

The front is provided with a circular opening of a size large enough

The best apple is usually a little beyond reach, as every boy

PART I—How a Shotgun is Made

The Cocking Hook Is an Ingenious Device, with Variations Used on Different

A Hammerless Gun with Roller Bearings to Overcome the Short Leverage

The Cocking Mechanism of the Hammerless

The locks of the hammerless shotgun work inside of the frame or

You might also like