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Enhancements for This Edition
Chapter 1
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Overall chapter content revisions for clarity and
general updates, including an updated discussion
of international financial reporting issues.
∙ Updated references to Campbell’s 2017 annual
report information.
∙ Update and revision of the Test Bank.
∙ Update and revision of the PowerPoints.
Chapter 2
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates.
∙ Updated references to Campbell’s 2017 annual
report information.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M2.2, M2.4, E2.10, E2.12,
E2.14, P2.16, P2.18, P2.22, P2.24, P2.25, and
P2.26.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
10 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 3
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates.
∙ Reintegrated Campbell’s 2017 annual report
information for the financial and graphical analysis
of liquidity and profitability trends.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have been
viii
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refreshed include: M3.2, M3.4, M3.6, E3.7, E3.8.
E3.10, E3.12, E3.14, E3.16, E3.17, P3.20, P3.22,
and C3.24.
∙ Update and revision of the Test Bank now
includes quantitative multiple-choice questions,
with 50 percent new multiple-choice questions
added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 4
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates. Specific rewrites or enhancements
to add clarity or visualization of concepts have
been added for the following content items: the
adjustments section of the chapter, the Business
in Practice Box on Bookkeeping Language In
Everyday English, and the flowchart illustrating
the bookkeeping process.
∙ A Study Suggestion has been added to explain
that adjustments are necessitated by cash leads
and cash lags.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M4.4, E4.6, E4.8, E4.10,
E4.12, E4.14, E4.16, E4.18, E4.20, P4.24, P4.26,
P4.27, and C4.30.
∙ Update and revision of the Test Bank now
includes quantitative multiple-choice questions,
with 10 percent new multiple-choice questions
added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 5
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates.
10/29/18 03:01 PM

∙ Updated discussion and analysis of Campbell’s
2017 annual report information for the accounting
and presentation of current assets, including cash,
accounts receivable, and inventories.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M5.1, M5.2, M5.3, M5.4,
M5.6, E5.8. E5.10, E5.12, E5.16, E5.20, E5.22,
E5.24, P5.26, P5.27, P5.28, P5.30, P5.32, P5.34,
and P5.36. Note also that C5.38 has been deleted.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
19 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 6
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates. The Accounting for Leases
section of the chapter was significantly rewritten
to reflect recent accounting standards updates.
∙ Updated discussion and analysis of Campbell’s
2017 annual report information for the accounting
and presentation of property, plant, and equipment,
and other noncurrent assets.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M6.2, M6.3, M6.4, M6.6,
E6.8, E6.14, E6.16, E6.18, E6.20, P6.22, P6.24,
P6.26, P6.28, P6.29, P6.30, P6.32, and C6.34.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
17 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 7
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
mar69525_fm_i-xix.indd ix
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∙ Overall chapter content revisions for clarity and
general updates.
∙ Updated discussion and analysis of Campbell’s
2017 annual report information for the accounting
and presentation of liabilities.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M7.2, M7.4, E7.6, E7.8,
E7.10, E7.12, E7.14, E7.16, E7.18, E7.22, E7.24,
P7.25, P7.26, P7,28, P7.30, and P7.32.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
13 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 8
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates, with a specific rewrite of the
accumulated other comprehensive income section.
∙ Updated discussion and analysis of Campbell’s
2017 annual report information for the accounting
and presentation of stockholders’ equity.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M8.2, M8.4, E8.6, E8.8,
E8.10, E8.12, E8.14, E8.18, E8.20, E8.22, P8.24,
P8.26, P8.28, P8.30, P8.32, C8.34, C8.35, and
C8.36.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
30 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 9
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
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10/29/18 03:01 PM

∙ Overall chapter content revisions for clarity and
general updates.
∙ Updated discussion and analysis of Campbell’s
2017 annual report information for the presentation
and disclosure of income statement and statement
of cash flows data.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M9.2, M9.4, E9.6, E9.8,
E9.9. E9.10. E9.12, E9.13, E9.16, E9.18. P9.20.
P9.22, P9.24, P9.26, and C9.33.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
54 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 10
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates. Specific rewrites have been
added for the following content items: mention
of the impact of the Internal Control - Integrated
Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway
Commission (COSO) and the Tax Cuts and Jobs
Act of 2017; updates to the “general organization
of the notes” with more detail regarding the types
of financial statements presented, and the order in
which they usually appear; new discussion of “Big
R” and “little r” financial statement restatements
and the recent trends observed in each category.
∙ Updated discussion and analysis of Campbell’s
2017 annual report information for the Notes to
the Financial Statements section of the chapter.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M10.2, E10.3, E10.8,
E10.10, P10.11, P10.12, and C10.14.
∙ Update and revision of the Test Bank.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
mar69525_fm_i-xix.indd x
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Chapter 11
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for end of
chapter Mini-Exercises and Exercises have been
updated.
∙ Overall chapter content revisions for clarity and
general updates.
∙ Updated discussion of Campbell’s 2017 annual
report information for the performance of financial
ratio analysis.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. Specific items that have
been refreshed include: M11.2, M11.4, P11.9,
P11.10, P11.14, C11.16, and C11.18.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with 64
percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 12
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for new
end of chapter Mini-Exercises have been added.
∙ Overall chapter content revisions for clarity and
general updates. Specific rewrites or enhancements
to add clarity or visualization of concepts have
been added for the following content items: the
management control process, the relevant range
assumption, expressing fixed costs per unit, the
cost formula, the contribution margin ratio, and
interpreting a break-even chart.
∙ Chapter Study Suggestion, FYI, and Business in
Practice boxes updated or replaced.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. New Mini-exercises M12.6
and M12.7 have been added. Specific items that
have been refreshed include: M12.2, M12.4,
M12.8, E12.10, E12.12, E12.14, E12.16, E12.18,
P12.20, P12.22, P12.24, P12.26, P12.28, P12.30,
and P12.34.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
14 percent new multiple-choice questions added.
10/29/18 03:01 PM

∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 13
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for new
end of chapter Mini-Exercises have been added.
∙ Overall chapter content revisions for clarity and
general updates. Specific rewrites or enhancements
to add clarity or visualization of concepts have
been added for the following content items: chapter
introduction, the value chain, manufacturing
inventory accounts, product costing process steps,
Campbell Soup discussion, process costing and
equivalent units of production, and reporting
differences using absorption vs. direct costing.
New section headings for Product Costing and
Statement of Cost of Goods Manufactured have
also been added.
∙ Chapter Study Suggestion, FYI, and Business in
Practice boxes updated or replaced.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. New Mini-exercises M13.5
and M13.7 have been added. Specific items that
have been refreshed include: M13.2, M13.4,
M13.8, E13.10, E13.12, E13.14, E13.16, E13.18,
E13.20, E13.22, P13.24, P13.26, P13.28, P13.30,
and C13.33.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
22 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 14
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for new
end of chapter Mini-Exercises have been added.
∙ Overall chapter content revisions for clarity and
general updates. Specific rewrites or enhancements
to add clarity or visualization of concepts have
been added for the following content items:
management’s approach to the budgeting process,
using the model for purchases/production budgets,
mar69525_fm_i-xix.indd xi
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and behavioral implications of standard setting
strategy.
∙ Chapter Study Suggestion, FYI, and Business in
Practice boxes updated or replaced.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. New Mini-exercises M14.1
and M14.6 have been added. Specific items that
have been refreshed include: M14.3, M14.5,
M14.7, M14.8, E14.10, E14.12, E14.14, E14.16,
E14.18, P14.20, P14.24, P14.26, and C14.28.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
18 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 15
∙ SmartBook assessments within each chapter
learning objective have been updated.
∙ Guided example video demonstrations for new
end of chapter Mini-Exercises have been added.
∙ Overall chapter content revisions for clarity
and general updates. Specific rewrites or
enhancements to add clarity or visualization
of concepts have been added for the following
content items: understanding favorable and
unfavorable variances, the design of performance
reports, discussion of Exhibit 15-3, direct and
common fixed expenses, and the transfer pricing
discussion.
∙ Chapter Study Suggestion, FYI, and Business in
Practice boxes updated or replaced.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. New Mini-exercises M15.7 and
M15.8 have been added. Specific items that have been
refreshed include: M15.1, M15.2, M15.3, M15.4,
M15.5, E15.10, M15.12, M15.14, M15.16, M15.18,
M15.20, P15.22, P15.24, P15.26, and C15.34.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
26 percent new multiple-choice questions added.
∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Chapter 16
∙ SmartBook assessments within each chapter
learning objective have been updated.
xi
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∙ Guided example video demonstrations for new
end of chapter Mini-Exercises have been added.
∙ Overall chapter content revisions for clarity
and general updates. Specific rewrites or
enhancements to add clarity or visualization
of concepts have been added for the following
content items: relevant costs, introduction for
analytical considerations for NPV model, new
graphic presentation of payback period, and new
graphic IRR using Excel.
∙ Chapter Study Suggestion, FYI, and Business in
Practice boxes updated or replaced.
∙ General update of all Mini-Exercises, Exercises,
Problems, and Cases. New Mini-exercises M16.4
and M16.5 have been added. Specific items that
have been refreshed include: M16.2, M16.6,
M16.8, E16.12, E16.14, E16.16, E16.18, E16.20,
E16.22, E16.24, E16.26, E16.28, P16.30, P16.32,
P16.34, P16.36, P16.38, C16.40, and C16.41.
∙ Update and revision of the Test Bank now includes
quantitative multiple-choice questions, with
15 percent new multiple-choice questions added.
xii
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∙ Update and revision of the PowerPoints and
Demonstration Problem PowerPoints.
Epilogue:
∙ Overall content revisions for clarity and general
updates. Specific rewrites or enhancements to add
clarity or visualization of concepts have been added
for the following content items: welcome section
and scandals discussion, ethics compliance and
corporate progress, IFRS adoption and reporting
in the U.S., data warehousing, data mining, big
data, predictive analytics, prescriptive analytics,
and artificial intelligence.
∙ New infographic added reporting ethics and
compliance data in large corporations and new
graphic added for IFRS adoption status in the
U.S.
∙ Updated or added FYI box information for the
following items: worst corporate scandals, CPA
Vision Project and Horizons 2025 Report, and
information resources for big data and artificial
intelligence.
10/29/18 03:01 PM
 Final PDF to printer

Acknowledgments
The task of creating and revising a textbook is not accomplished by the work of the authors alone. Thoughtful feed-
back from reviewers is integral to the development process and gratitude is extended to all who have participated in
earlier reviews of Accounting: What the Numbers Mean as well as to our most recent panel of reviewers. Your help
in identifying strengths to further develop and areas of weakness to improve was invaluable to us. We are grateful
to the following for their comments and constructive criticisms that helped us with development of the twelfth edi-
tion, and previous editions:
Janet Adeyiga, Hampton University Robert C. Elmore, Tennessee Tech University Carol Pace, Grayson County College
Gary Adna Ames, Brigham Young University–Idaho Leslie Fletcher, Georgia Southern University Robert Patterson, Penn State–Erie
Sharon Agee, Rollins College Norman Foy, Mercy College Robert M. Peevy, Tarleton State University
Vernon Allen, Central Florida Community College Randy Frye, Saint Francis University Craig Pence, Highland Community College
Tim Alzheimer, Montana State University Harry E. Gallatin, Indiana State University Candace Person, University of California–San Diego
David Anderson, Louisiana State University Regan Garey, Immaculata University Extension
Susan Anderson, North Carolina A&T State Terrie Gehman, Elizabethtown College David H. Peters, Southeastern University
University Daniel Gibbons, Waubonsee Community College Ronald Picker, St. Mary of the Woods College
Florence Atiase, University of Texas–Austin Louis Gingerella, Rensselaer–Hartford Martha Pointer, East Tennessee State University
Benjamin Bae, Virginia Commonwealth University Dan Goldzband, University of California–San Diego James Pofal, University of Wisconsin–Oshkosh
Linda T. Bartlett, Bessemer State Technical College Kyle L. Grazier, University of Michigan Shirley Powell, Arkansas State University–Beebe
Jean Beaulieu, Westminster College Alice M. Handlang, Southern Christian University Barbara Powers-Ingram, Wytheville Community
Robert Beebe, Morrisville State College Betty S. Harper, Middle Tennessee State University College
Jekabs Bikis, Dallas Baptist University Elaine Henry, Rutgers University M. Jeff Quinlan, Madison College
David Bilker, Temple University William Hood, Central Michigan University John Rush, Illinois College
Scott Butler, Dominican University of California Fred Hughes, Faulkner University Robert W. Rutledge, Texas State University
Marci L. Butterfield, University of Utah Kim Hurt, Central Community College Robert E. Rosacker, The University of South
Sandra Byrd, Southwest Missouri State University Lori Jacobson, North Idaho College Dakota
Harlow Callander, University of St. Thomas Linda L. Kadlecek, Central Arizona College Paul Schwin, Tiffin University
John Callister, Cornell University Zulfiqar Khan, Benedictine University Raymond Shaffer, Youngstown State University
Sharon Campbell, University of North Alabama Charles Kile, Middle Tennessee State University Erin Sims, DeVry University
Elizabeth D. Capener, Dominican University of CA Nancy Kelly, Middlesex Community College Forest E. Stegelin, University of Georgia
Kay Carnes, Gonzaga University Ronald W. Kilgore, University of Tennessee Mark Steadman, East Tennessee State University
Thomas J. Casey, DeVry University Bert Luken, Wilmington College–Cincinnati Charles Smith, Iowa Western Community College
Royce E. Chaffin, University of West Georgia Anna Lusher, West Liberty State College Ray Sturm, University of Central Florida
James Crockett, University of Southern Mississippi Suneel Maheshwari, Marshall University John Suroviak, Pacific University
Alan B. Czyzewski, Indiana State University Gwen McFadden, North Carolina A&T State Linda Tarrago, Hillsborough Community College
Weldon Terry Dancer, Arkansas State University University Judith A. Toland, Bucks County Community
Thomas D’Arrigo, Manhattan College Tammy Metzke, Milwaukee Area Technical College College
Patricia Davis, Keystone College Melanie Middlemist, Colorado State University Catherine Traynor, Northern Illinois University
Francis Dong, DeVry University Richard Monbrod, DeVry University Michael Vasilou, DeVry University
Martha Doran, San Diego State University Murat Neset Tanju, University of David Verduzco, University of Texas–Austin
Robert Dunn, Columbus State University Alabama–Birmingham Joseph Vesci, Immaculata University
Marthanne Edwards, Colorado State University Eugene D. O’Donnell, Harcum College William Ward, Mid-Continent University
Craig Ehlert, Montana State University–Bozeman William A. O’Toole, Defiance College Kortney White, Arkansas State University
John A. Elfrink, Central Missouri State University Sandra Owen, Indiana University–Bloomington Dennis Wooten, Erie Community College–North

xiii

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 Final PDF to printer

We Are Grateful . . . Although the approach to the material and the scope of coverage in this text are
the results of our own conclusions, truly new ideas are rare. The authors whose textbooks we have used in the past
have influenced many of our ideas for particular accounting and financial management explanations. Likewise,
students and colleagues through the years have helped us clarify illustrations and teaching techniques. Many of the
users of the first 11 editions—both teachers and students—have offered comments and constructive criticisms that
have been encouraging and helpful. All this input is greatly appreciated.
We extend special thanks to Robert Picard of Idaho State University, for his careful accuracy check of the text
manuscript and solutions manual and ancillaries, and to April L. Mohr of Jefferson Community and Technical
College, SW, in Louisville, Kentucky, for her invaluable assistance and guidance in the development of our text’s
LearnSmart content.
We also wish to thank our many colleagues at McGraw-Hill, who, for more than 25 years, have provided excep-
tional editorial assistance and product development guidance. Your collective efforts have helped to shape every
aspect of this text, and it continues to be a pleasure to work with such a fine group of publishing professionals.
Finally, we wish to thank David H. Marshall for making this text possible, and for his many years of guidance,
kindness, and deep and abiding friendship. Were it not for his insight, vision, and determination, this book would
have forever remained a dream. Thank you, David. We are proud to carry on your legacy through our work on
Accounting: What the Numbers Mean.

Wayne W. McManus Daniel F. Viele

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Brief Contents

1. Accounting—Present and Past 2 10. Corporate Governance, Notes to

the Financial Statements, and Other
Disclosures 368
Part 1:
11. Financial Statement Analysis 396
Financial Accounting
2. Financial Statements and Accounting
Part 2:
Concepts/Principles 28
Managerial Accounting
3. Fundamental Interpretations Made from
Financial Statement Data 68 12. Managerial Accounting and Cost–
Volume–Profit Relationships 432
4. The Bookkeeping Process and
Transaction Analysis 94 13. Cost Accounting and Reporting 476
5. Accounting for and Presentation of 14. Cost Planning 520
Current Assets 138 15. Cost Control 562
6. Accounting for and Presentation of 16. Costs for Decision Making 602
Property, Plant, and Equipment, and
Other Noncurrent Assets 186 Epilogue: Accounting—The Future 650
7. Accounting for and Presentation of Appendix: Campbell Soup Company 2017
Liabilities 234 Annual Report 662
Index 725
8. Accounting for and Presentation of
Stockholders’ Equity 276
9. The Income Statement and the Statement
of Cash Flows 320

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Contents

Preface iv Illustration of Financial Statement

Relationships 41
1. Accounting—Present and Past 2 Accounting Concepts and Principles 44
Concepts/Principles Related to the Entire
What Is Accounting? 3
Model 44
Financial Accounting 6
Concepts/Principles Related to Transactions 45
Managerial Accounting/Cost Accounting 7
Concepts/Principles Related to Bookkeeping
Auditing—Public Accounting 7 Procedures and the Accounting Process 46
Internal Auditing 8 Concepts/Principles Related to Financial
Governmental and Not-for-Profit Accounting 8 Statements 46
Income Tax Accounting 9 Limitations of Financial Statements 47
How Has Accounting Developed? 9 The Corporation’s Annual Report 49
Early History 9
The Accounting Profession in the United 3. Fundamental Interpretations Made
States 9
from Financial Statement Data 68
Financial Accounting Standard Setting at the
Present Time 10 Financial Ratios and Trend Analysis 69

Standards for Other Types of Accounting 12 Return on Investment 70

International Accounting Standards 13 The DuPont Model: An Expansion of the ROI

Calculation 73
Ethics and the Accounting Profession 15
Return on Equity 75
The Conceptual Framework 16
Working Capital and Measures of Liquidity 76
Summary of Concepts Statement No. 8,
Chapter 1: “The Objective of General Purpose Illustration of Trend Analysis 79
Financial Reporting” 16
Objectives of Financial Reporting for 4. The Bookkeeping Process and
Nonbusiness Organizations 19 Transaction Analysis 94
Plan of the Book 20
The Bookkeeping/Accounting Process 95
The Balance Sheet Equation—A Mechanical
Key 95
Part 1:
Transactions 97
Financial Accounting
Bookkeeping Jargon and Procedures 98
2. Financial Statements and Accounting Understanding the Effects of Transactions on
Concepts/Principles 28 the Financial Statements 102
Adjustments 106
Financial Statements 29
Transaction Analysis Methodology 110
From Transactions to Financial Statements 29
Financial Statements Illustrated 31
Explanations and Definitions 31
5. Accounting for and Presentation of
Current Assets 138
Comparative Statements in Subsequent
Years 40 Cash and Cash Equivalents 141
xvi

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Contents xvii

The Bank Reconciliation as a Control over Future Value of an Annuity 210

Cash 142 Present Value 211
Short-Term Marketable Securities 144 Present Value of an Annuity 213
Balance Sheet Valuation 144 Impact of Compounding Frequency 216
Interest Accrual 146
Accounts Receivable 147
7. Accounting for and Presentation of
Bad Debts/Uncollectible Accounts 147
Liabilities 234
Cash Discounts 149
Current Liabilities 237
Notes Receivable 150
Short-Term Debt 237
Interest Accrual 151
Current Maturities of Long-Term Debt 240
Inventories 152
Accounts Payable 241
Inventory Cost Flow Assumptions 153
Unearned Revenue or Deferred Credits 241
The Impact of Changing Costs (Inflation/
Deflation) 157 Payroll Taxes and Other Withholdings 242

Selecting an Inventory Cost Flow Other Accrued Liabilities 243

Assumption 157 Noncurrent Liabilities 245
Inventory Accounting System Alternatives 160 Long-Term Debt 245
Inventory Errors 162 Deferred Tax Liabilities 254
Balance Sheet Valuation at the Lower of Cost or Other Noncurrent Liabilities 255
Market 163 Contingent Liabilities 256
Prepaid Expenses and Other Current Assets 164

8. Accounting for and Presentation of

6. Accounting for and Presentation of Stockholders’ Equity 276
Property, Plant, and Equipment, and
Paid-In Capital 278
Other Noncurrent Assets 186
Common Stock 278
Land 187
Preferred Stock 282
Buildings and Equipment 190
Additional Paid-In Capital 285
Cost of Assets Acquired 190
Retained Earnings 285
Depreciation for Financial Accounting
Cash Dividends 286
Purposes 191
Stock Dividends and Stock Splits 287
Repair and Maintenance Expenditures 197
Accumulated Other Comprehensive Income
Disposal of Depreciable Assets 198
(Loss) 290
Assets Acquired by Lease 200
Treasury Stock 294
Intangible Assets 204
Reporting Changes in Stockholders’ Equity
Leasehold Improvements 204 Accounts 295
Patents, Trademarks, and Copyrights 205 Noncontrolling Interest 296
Goodwill 205 Owners’ Equity for Other Types of Entities 298
Natural Resources 207 Proprietorships and Partnerships 298
Other Noncurrent Assets 207 Not-for-Profit and Governmental
Appendix—Time Value of Money 209 Organizations 298
Future Value 209 Appendix—Personal Investing 301

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xviii Contents
9. The Income Statement and the
Statement of Cash Flows 320
Income Statement 324
Revenues 324
Expenses 328
Cost of Goods Sold 329
Gross Profit or Gross Margin 331
Operating Expenses 333
Income from Operations 334
Other Income and Expenses 335
Income before Income Taxes and Income Tax
Expense 335
Net Income and Earnings per Share 335
Income Statement Presentation
Alternatives 337
Unusual or Infrequently Occurring
Items Sometimes Seen on an Income
Statement 339
Statement of Cash Flows 341
Content and Format of the Statement 341
Interpreting the Statement of Cash
Flows 346
10. Corporate Governance, Notes to the
Financial Statements, and Other
Disclosures 368
Corporate Governance 369
Financial Reporting Misstatements
General Organization of Notes to the Financial
Statements 374
Notes to the Financial Statements
Significant Accounting Policies 375
Details of Other Financial Statement
Amounts 378
Other Disclosures 378
Management’s Statement of
Responsibility 382
Management’s Discussion and Analysis
Five-Year (or Longer) Summary of Financial
Data 383
Independent Auditors’ Report 383
Financial Statement Compilations
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11. Financial Statement Analysis 396
Financial Statement Analysis Ratios 397
Liquidity Measures 397
Activity Measures 398
Profitability Measures 402
Financial Leverage Measures 407
Other Analytical Techniques 411
Book Value per Share of Common Stock 411
Common Size Financial Statements 412
Other Operating Statistics 414
Part 2:
Managerial Accounting
12. Managerial Accounting and Cost–
Volume–Profit Relationships 432
Managerial Accounting Contrasted
to Financial Accounting 433
Cost Classifications 436
Relationship of Total Cost to Volume of
Activity 437
Applications of Cost–Volume–Profit
Analysis 439
Cost Behavior Pattern: The Key 439
Estimating Cost Behavior Patterns 441
A Modified Income Statement Format 441
An Expanded Contribution Margin
371
Model 445
Multiple Products or Services and Sales Mix
Considerations 449
375
Breakeven Point Analysis 449
Operating Leverage 455
13. Cost Accounting and Reporting 476
Cost Management 477
Cost Accumulation and Assignment 480
382 Cost Relationship to Products or Activity 481
Costs for Cost Accounting Purposes 482
Cost Accounting Systems 483
Cost Accounting Systems—General
387 Characteristics 483
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Contents xix

Product Costing 485 Standard Cost Variance Analysis 569

Statement of Cost of Goods Manufactured 493
Cost Accounting Systems—Job Order Costing,
Process Costing, and Hybrid Costing 495
Cost Accounting Methods—Absorption
Costing and Direct Costing 496
Cost Accounting Systems in Service
Organizations 498
Activity-Based Costing 498
Analysis of Variable Cost Variances 569
Analysis of Fixed Overhead Variance 574
Accounting for Variances 578
Analysis of Organizational Units 578
Reporting for Segments of an Organization 578
The Analysis of Investment Centers 580
The Balanced Scorecard 583

14. Cost Planning 520 16. Costs for Decision Making 602
Cost Classifications 604
Cost Classifications 522
Cost Classifications for Other Analytical
Relationship of Total Cost to Volume of
Purposes 604
Activity 522
Short-Run Decision Analysis 605
Cost Classification According to a Time-Frame
Perspective 523 Relevant Costs 605

Budgeting 523 Relevant Costs in Action—The Sell or Process

The Budgeting Process in General 523
The Budget Time Frame 525
The Budgeting Process 526
The Purchases/Production Budget 527
The Cost of Goods Sold Budget
The Operating Expense Budget 533
The Budgeted Income Statement 534
The Cash Budget 535
Further Decision 606
Relevant Costs in Action—The Special Pricing
Decision 607
Relevant Costs in Action—The Target Costing
Question 610
533 Relevant Costs in Action—The Make or Buy
Decision 611
Relevant Costs in Action—The Continue
or Discontinue a Segment Decision 613

The Budgeted Balance Sheet 537 Relevant Costs in Action—The Short-Term

Allocation of Scarce Resources 616
Standard Costs 539
Long-Run Investment Analysis 617
Using Standard Costs 539
Capital Budgeting 617
Developing Standards 539
Investment Decision Special
Costing Products with Standard Costs 541
Considerations 617
Other Uses of Standards 542
Cost of Capital 618
Budgeting for Other Analytical Purposes 543
Capital Budgeting Techniques 619
The Investment Decision 626
15. Cost Control 562 Integration of the Capital Budget with Operating
Cost Classifications 563 Budgets 626
Relationship of Total Cost to Volume of
Activity 563
Cost Classification According to a Time-Frame
Epilogue: Accounting—The
Perspective 564 Future 650
Performance Reporting 565 Appendix: Campbell Soup Company
Characteristics of the Performance Report 565 2017 Annual Report 662
The Flexible Budget 567 Index 725

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1
Accounting—
Present and Past

The worldwide financial and credit crisis that came to a head in the fall of 2008 was precipitated
by many factors. Not the least of these factors were greed, inadequate market regulatory supervi-
sion, and an excess of “financial engineering” involved in the creation of financial instruments that
almost defied understanding even by sophisticated investors. This crisis was preceded in the first
decade of the century by the bankruptcy filings of two large, publicly owned corporations, which
resulted in billions of dollars of losses by thousands of stockholders. In 2001, it had been Enron
Corporation, and a few months later, WorldCom Inc. In each case, a number of factors caused the
precipitous fall in the value of the firms’ stock. The most significant factor was probably the loss
of investor confidence in each company’s financial reports and other disclosures reported to
stockholders and regulatory bodies, including the Securities and Exchange Commission (SEC).
The Enron and WorldCom debacles, and other widely publicized breakdowns of corporate
financial reporting, resulted in close scrutiny of such reporting by the accounting profession itself
and also by the U.S. Congress and other governing bodies. The accounting practices that were
criticized generally involved complex transactions.
Also contributing to the issue were aggressive attempts by some executives to avoid the
spirit of sound accounting, even though many of the financial reporting practices in question
were not specifically forbidden by existing accounting pronouncements at that time. To be sure,
the financial reporting requirements faced by companies whose securities are publicly traded
have since become more strenuously scrutinized under the Sarbanes–Oxley Act of 2002 (SOX)
and the watchful eye of the Public Company Accounting Oversight Board (PCAOB), which is
the regulatory body created under SOX to oversee the activities of the auditing profession and
further protect the public interest. These enhanced regulatory efforts have helped to increase the
transparency of the financial reporting process and the understandability of financial statements.
Although the financial crisis that disrupted the financial world in 2008 was not directly blamed on
financial accounting or auditing weaknesses, some accounting and financial reporting practices
that existed at that time were severely criticized. This book briefly addresses some of the more
troublesome technical issues still faced by the accounting profession today, but the elaborate
attempts to embellish the financial image of those companies in question certainly went beyond
the fundamentals described in the following pages.
 Chapter 1 Accounting—Present and Past 3

The objective of this text is to present enough of the fundamentals of accounting to permit
the nonaccountant to understand the financial statements of an organization operating in our
society and to understand how financial information can be used in the management planning,
control, and decision-making processes. Although usually expressed in the context of profit-
seeking business enterprises, most of the material presented here is equally applicable to not-
for-profit social service and governmental organizations.
Accounting is sometimes called the language of business, and it is appropriate for people
who are involved in the economic activities of our society—and that is just about everyone—to
know at least enough of this language to be able to make decisions and informed judgments
about those economic activities.

L E A RNI NG OBJEC T IVES ( LO)

After studying this chapter, you should understand and be able to

LO 1-1 Explain the definition of accounting.

LO 1-2 Identify who the users of accounting information are and explain why they find
accounting information useful.

LO 1-3 Identify the variety of professional services that accountants provide.

LO 1-4 Summarize the development of accounting from a broad historical perspective.

LO 1-5 Explain the role that the FASB plays in the development of financial accounting standards.

LO 1-6 Generalize about how financial reporting standards evolve.

LO 1-7 Identify the key elements of ethical behavior for a professional accountant.

LO 1-8 Summarize the reasons for the FASB’s Conceptual Framework project.

LO 1-9 Summarize the objective of general-purpose financial reporting.

LO 1-10 Describe the plan of the book.

What Is Accounting?
In a broad sense, accounting is the process of identifying, measuring, and communi- LO 1
cating economic information about an organization for the purpose of making deci- Explain the definition
sions and informed judgments. (Accountants frequently use the term entity instead of of accounting.
organization because it is more inclusive.)
This definition of accounting can be expressed schematically as follows:
Accounting is the process of

Identifying

Communicating}
Economic information For decisions and
Measuring​​ ​ ​ ​   ​ →​ ​  ​ ​
​  
about an entity informed judgments
4 Chapter 1 Accounting—Present and Past

Exhibit 1-1
User Decision/Informed Judgment Made
Users and Uses of
Accounting Information Management When performing its functions of planning, directing, and controlling,
management makes many decisions and informed judgments. For
example, when considering the expansion of a product line, planning
involves identifying and measuring costs and benefits; directing involves
communicating the strategies selected; and controlling involves identifying,
measuring, and communicating the results of the product line expansion
during and after its implementation.
LO 2 Investors/ When considering whether to invest in the common stock of a company,
Identify who the users shareholders investors use accounting information to help assess the amounts, timing,
and uncertainty of future cash returns on their investment.
of accounting informa-
tion are and explain why Creditors/ When determining how much merchandise to ship to a customer before
suppliers receiving payment, creditors assess the probability of collection and the
they find accounting
risks of late (or non-) payment. Banks also become creditors when they
information useful. make loans and thus have similar needs for accounting information.
Employees When planning for retirement, employees assess the company’s ability to
offer long-term job prospects and an attractive retirement benefits package.
SEC (Securities When reviewing for compliance with SEC regulations, analysts determine
and Exchange whether financial statements issued to investors fully disclose all required
Commission) information.

Who makes these decisions and informed judgments? Users of accounting infor-
mation include the management of the entity or organization; the owners of the organi-
zation (who are frequently not involved in the management process); potential investors
in and creditors of the organization; employees; and various federal, state, and local
governmental agencies that are concerned with regulatory and tax matters. Exhibit 1-1
describes some of the users and uses of accounting information. Pause, and try to think
of at least one other decision or informed judgment that each of these users might make
from the economic information that could be communicated about an entity.
Accounting information is required for just about every kind of organization.
When accounting is mentioned, most people initially think of the information needs
and reporting requirements of business firms, but not-for-profit social service organiza-
tions, governmental units, educational institutions, social clubs, political committees,
and other groups all require accounting for their economic activities as well.
Accounting is frequently perceived as something that others who are good with
numbers do, rather than as the process of providing information that supports deci-
sions and informed judgments. Relatively few people become accountants, but almost
all people use accounting information. The principal objective of this text is to help
you become an informed user of accounting information, rather than to prepare you to
become an accountant. However, the essence of this user orientation provides a solid
foundation for students who choose to seek a career in accounting.
If you haven’t already experienced the lack of understanding or confusion that
results from looking at a set of financial statements, you have been spared one of life’s
frustrations. Certainly during your formal business education and early during your
employment experience, you will be presented with financial data. Being an informed
user means knowing how to use those data as information.
The following sections introduce the major areas of practice within the account-
ing discipline and will help you understand the types of work done by professional
 Chapter 1 Accounting—Present and Past 5

accountants within each of these broad categories. In a similar way, the accompanying
Business in Practice discussion highlights career opportunities in accounting.

1. What does it mean to state that the accounting process should support decisions
and informed judgments?
Q What Does
It Mean?
Answer on
page 27

Career Opportunities in Accounting

Because accounting is a profession, most entry-level positions require at least a bachelor’s
degree with a major in accounting. Individuals are encouraged to achieve Certified Public
Accountant (CPA) licensure as quickly as feasible and/or to attend graduate school to pursue an
area of specialization. Persons who work hard and smart can expect to attain high professional Business in
levels in their careers. The major employers of accountants include public accounting firms, Practice
industrial firms, government, and not-for-profit organizations.

Public Accounting
The work done by public accountants varies significantly depending on whether they are employed
by a local, regional, or international CPA firm. Small local firms concentrate on the bookkeeping,
accounting, tax return, and financial planning needs of individuals and small businesses. These
firms need generalists who can adequately serve in a variety of capacities. The somewhat larger,
regional firms offer a broad range of professional services but concentrate on the performance
of audits (frequently referred to as attestation or compliance services), corporate tax returns, and
management advisory services. They often hire experienced financial and industry specialists to
serve particular client needs, in addition to recruiting well-qualified recent graduates.
The large, international CPA firms also perform auditing, tax, and consulting services. Their
principal clients are large domestic and international corporations. The “Big 4” CPA firms are
Deloitte Touche Tohmatsu (Deloitte), PricewaterhouseCoopers (known as PwC), EY (formerly
Ernst & Young), and KPMG International (KPMG). These firms dominate the market in terms of
total revenues; number of corporate audit clients; and the number of offices, partners, and
staff members. The Big 4 international firms generally recruit outstanding graduates and highly
experienced CPAs and encourage the development of specialized skills by their personnel.
(Visit any of the Big 4 websites for detailed information regarding career opportunities in public
accounting: deloitte.com, pwc.com, ey.com, or kpmg.com.)

Industrial Accounting
More accountants are employed in industry than in public accounting because of the vast
­number of manufacturing, merchandising, and service firms of all sizes. In addition to using the
services of public accounting firms, these firms employ cost and management accountants, as
well as financial accountants. Many accountants in industry start working in this environment
right out of school; others get their start in public accounting as auditors but move to industry
after getting at least a couple of years of experience.

Government and Not-for-Profit Accounting

Opportunities for accounting professionals in the governmental and not-for-profit sectors of the
economy are constantly increasing. In the United States, literally thousands of state and local
government reporting entities touch the lives of every citizen. Likewise, accounting specialists
are employed by colleges and universities, hospitals, and voluntary health and welfare organiza-
tions such as the American Red Cross, United Way, and Greenpeace.
6 Chapter 1 Accounting—Present and Past

Financial Accounting
LO 3 Financial accounting generally refers to the process that results in the preparation
Identify the variety of and reporting of financial statements for an entity. As will be explained in more detail,
professional services financial statements present the financial position of an entity at a point in time, the
that accountants provide. results of the entity’s operations for some period of time, the cash flow activities for
the same period, and other information (the notes to the financial statements or finan-
cial review) about the entity’s financial resources, obligations, owners’/stockholders’
interests, and operations.
Financial accounting is primarily oriented toward the external user. The financial
statements are directed to individuals who are not in a position to be aware of the
day-to-day financial and operating activities of the entity. Financial accounting is also
primarily concerned with the historical results of an entity’s performance. Financial
statements reflect what has happened in the past. Although readers may want to proj-
ect past activities and their results into future performance, financial statements are
not a crystal ball. Many corporate annual reports refer to the historical nature of finan-
cial accounting information to emphasize that users must make their own judgments
about a firm’s future prospects.
Bookkeeping procedures are used to accumulate the financial results of many
of an entity’s activities, and these procedures are part of the financial accounting
process. Bookkeeping procedures have been thoroughly systematized using manual,
mechanical, and computer techniques. Although these procedures support the finan-
cial accounting and reporting process, they are only a part of the process.
Financial accounting is done by accounting professionals who have generally
earned a bachelor’s degree with a major in accounting. The financial accountant is
employed by an entity to use her or his expertise, analytical skills, and judgment in the
many activities that are necessary for the preparation of financial statements. The title
controller is used to designate the chief accounting officer of a corporation. The con-
troller is usually responsible for both the financial and managerial accounting func-
tions of the organization (as discussed later). Sometimes the title comptroller (the Old
English spelling) is used for this position.
An individual earns the Certified Public Accountant (CPA) professional designa-
tion by fulfilling certain education and experience requirements and passing a compre-
hensive four-part examination. A uniform CPA exam is given nationally, although it is
administered by individual states.1 Some states require that candidates have accounting
work experience before sitting for the exam. A total of 54 of the 55 U.S. jurisdictions,
including all 50 states, have now enacted legislation increasing the educational require-
ments for CPA candidates from 120 semester hours of college study, or a bachelor’s
degree, to a minimum of 150 semester hours of college study to be granted licensure
as a CPA.2 Thirty-two of these states allow candidates to sit for the CPA exam with
120 hours, but require 150 hours for certification.3 The American Institute of Certified
Public Accountants (AICPA), the national professional organization of CPAs, has
also endorsed this movement by requiring that an individual CPA wanting to become

1
Since 2004, CPA candidates have been allowed to schedule their own exam dates; they may sit for one
part at a time because the examination is now computer-based. The former “pencil and paper” CPA exam has
become a relic of the past.
2
The U.S. Virgin Islands is the only jurisdiction that has not enacted the 150-hour education requirement
as this text goes to print.
3
See becker.com/cpa-review/resources/about-exam/requirements for the exam requirements of your state.
Another random document with
no related content on Scribd:
The Project Gutenberg eBook of Historia de la
lengua y literatura castellana, Tomo 2
 This ebook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it away
or re-use it under the terms of the Project Gutenberg License
included with this ebook or online at www.gutenberg.org. If you
are not located in the United States, you will have to check the
laws of the country where you are located before using this
eBook.

Title: Historia de la lengua y literatura castellana, Tomo 2

Época de Carlos V

Author: Julio Cejador y Frauca

Release date: March 24, 2024 [eBook #73257]

Language: Spanish

Original publication: Madrid: Tip. de la "Rev. de arch., bibl. y

museos", 1915

Credits: Andrés V. Galia, Santiago, and the Online Distributed

Proofreading Team at https://www.pgdp.net (This file
was produced from images generously made available
by The Internet Archive)

*** START OF THE PROJECT GUTENBERG EBOOK HISTORIA

DE LA LENGUA Y LITERATURA CASTELLANA, TOMO 2 ***
 NOTAS DEL TRANSCRIPTOR

En la versión de texto sin formatear

las palabras en itálicas están
indicadas con _guiones bajos_; las
palabras en Versalitas se han
escrito en MAYÚSCULAS y las
palabras en negrita se indican =así=.
Además, una letra precedida por el
signo “^” indica que esa letra es un
superíndice. Por ejemplo ^e
representa la letra “e” en tamaño más
pequeño que la escritura del resto del
texto, y se encuentra ligeramente por
encima de la línea de escritura.

En algunas partes del texto original

se emplea el signo del antiguo et
latino. Para esta transcripción se ha
utilizado el 2 invertido (ᘔ) para su
representación.

Para el texto escrito por Cejador y

Frauca, el criterio utilizado para llevar
a cabo esta transcripción ha sido el
de respetar las reglas de la Real
Academia Española, vigentes cuando
la presente edición de la obra fue
publicada. El lector interesado puede
consultar el Mapa de Diccionarios
Académicos de la Real Academia
Española.

Para el texto citado de otros autores,

el criterio fue privilegiar que
coincidiese con el texto que figura en
la imagen utilizada para llevar a cabo
la transcripción. No se han
modificado evidentes errores
tipográficos ni de ortografía en esos
textos, estimando que la intención de
Cejador y Frauca fue de preservar la
grafía original. Se ha respetado la
ortografía usada en los epígrafes de
las láminas incluidas en la obra, a
pesar de que la misma no refleja las
normas actuales de la RAE. Es por
todo esto que se encontrarán
inconsistencias en la forma que están
escritos varios vocablos.

El transcriptor ha incluido al principio

un Índice y ha mudado la Lista de
láminas presentadas en la edición
impresa al principio de la obra.

El transcriptor ha modificado la
imagen de la cubierta original y la ha
puesto en el dominio público.
 HISTORIA DE LA LENGUA
Y
LITERATURA CASTELLANA
(ÉPOCA DE CARLOS V)

POR

D. JULIO CEJADOR Y FRAUCA

CATEDRÁTICO DE LENGUA Y LITERATURA
LATINAS
DE LA UNIVERSIDAD CENTRAL
 MADRID
TIP. DE LA "REV. DE ARCH., BIBL. Y MUSEOS"
Olózaga, 1.—Teléfono 3.185.
1915
ES PROPIEDAD DEL AUTOR Y QUEDA HECHO
EL DEPÓSITO
QUE MARCA LA LEY
 AL INSIGNE HISPANÓFILO
MR. ARCHER MILTON HUNTINGTON

Señor:

Los escritores y eruditos españoles todos se honran

con vuestra cariñosa amistad, la literatura española
os adeuda beneficios sin cuento, el nombre español
brilla cada día con nuevas luces en vuestra nación
merced á las empresas que habéis acabado para
enaltecerlo, la España culta os cuenta entre sus hijos
predilectos, el Rey os tiene por amigo y familiar, vos
mismo sois tan apasionadamente aficionado y
devoto, no sólo de las letras, antigüedades é historia
de España, sino de cuanto á España atañe, que sólo
sentís no haber nacido español, teniendo tan
española el alma y en esta nuestra tierra todos
vuestros amores.

Permitid, pues, que el último de los eruditos de

España, aunque no lo es de los que os admiran y
quieren, os dirija este liviano trabajo sobre la
"Historia de la lengua y literatura castellana durante
la época de Carlos V", que tan hondamente conocéis
y cuyos mejores monumentos escritos guardáis
como el más preciado de vuestros tesoros.

Llamaros Mecenas de las letras españolas sería

llamaros bien poca cosa, para lo que de hecho
habéis sido, sois y habéis de ser respecto de ellas.
Harto lo tenemos sabido cuantos en ellas
entendemos; pero justo es no guardárnoslo
agradecidos, sin que lo pregonemos á cada paso por
todas partes para que el mundo entero lo sepa y os
lo reconozca debidamente. Interesamos en ello los
españoles, porque ensalzar vuestras obras es
ensalzar á nuestra misma patria.

Como disfrutaseis en vuestra tierra de la magnífica

biblioteca de libros españoles allegada por el
benemérito hispanista Ticknor, á quien debe la
literatura española la primera y mejor historia que
tenemos, os tomó tan desapoderada afición por
nuestras letras, que no descansasteis hasta venir á
España, y, enamorado de la vieja epopeya de
Castilla, os entregasteis de lleno al estudio del añejo
pergamino que del "Cantar de Mio Cid" guardaba en
cofrecito de hierro, como oro en paño, don Alejandro
Pidal. Planeasteis los tres magníficos tomos de la
obra, con la edición crítica, la versión inglesa,
variantes del texto y comentarios; recorristeis paso á
paso los que el héroe castellano hubo de dar con
sus mesnadas; paseasteis la tierra, le bebisteis el
espíritu, sacasteis costosas fotografías y disteis al
cabo á la estampa el maravilloso monumento de
vuestra obra, digna de parearse con la que Alejandro
ordenó sobre la epopeya homérica.

Erais además arqueólogo, porque no hay campo de

la cultura que á vuestra alteza de pensamientos esté
vedado, y os fuisteis á Itálica, arrendasteis los
terrenos particulares arrendables de Santiponce,
pagando más que si los hubieseis comprado, y
ordenasteis las excavaciones á todo coste.
Desenterrados magníficos tesoros, las piezas
mayores regalásteislas al Museo Arqueológico de
Sevilla; con lo demás enriquecisteis el Museo que á
las antigüedades españolas levantabais en Nueva
York, así como en la Biblioteca hispánica, que
juntamente fundabais, habíais recogido ya hasta
18.000 volúmenes, comprados parte de la biblioteca
de Ticknor en Boston, parte en España, pagando
aquí y allá á peso de oro, libro por libro, cuanto de
más raro y precioso sabía rebuscar el ansia que os
aquejaba de allegar cosas españolas.
Dos años mortales luchasteis con el Marqués de
Jerez de los Caballeros por que os vendiese su
inestimable biblioteca de 22.000 volúmenes, la flor y
nata de los más exquisitos y rebuscados libros de la
antigua España. Cuando al cabo vencisteis, y,
pagados un millón de francos, sacasteis de España
tamaño tesoro literario, con lágrimas del corazón
lloraron los eruditos españoles aquel, al parecer,
triste y fatal acontecimiento. Los pergaminos de
nuestra antigua hidalguía salían de la casa solariega,
dejábannos sin los últimos testigos que acreditasen
nuestras glorias pasadas. Pero bien pronto
enjugaron los eruditos sus lágrimas, y no sólo se
consolaron, sino que se congratularon y á buena
estrella para la cultura española atribuyeron el que
hubieran pasado á tales manos, que sabrían
guardarlos mejor que no los hubiéramos nosotros
sabido guardar.

Habíais comprado en el Andubon Park de Nueva

York, donde cada día se extiende lo más granado de
aquella gran ciudad, terrenos bastantes para labrar,
como labrasteis en ellos, el magnífico palacio del
"Museo y Biblioteca hispana", verdadero templo del
arte y del saber español, obra única en el mundo,
como no la hay consagrada al arte y saber de ningún
otro pueblo.
No contento con esto, comenzasteis á devolvernos
los mejores libros, rica y fielmente reproducidos,
regalando ejemplares á los centros de cultura y á
cuantos particulares eruditos pudieran
aprovecharlos, como la reproducción de las dos
primeras ediciones de la primera parte del "Quijote",
hechas por Cuesta en 1605, y la de la segunda de
1615: la reproducción del famoso manuscrito del
"Abecedarium", de Hernando Colón, índice de la
antigua biblioteca colombina, y tantas y tantas otras
reproducciones que allanan las antes insuperables
dificultades que ofrecía el estudio de nuestra
literatura.

¿Qué más? No hay libro, no hay obra de arte, no hay

papel, pergamino, lienzo, tabla ó cascote que
atestigüe el menor pedazo de nuestra antigua
cintura, que no lo apreciéis como un inapreciable
pedazo del alma española, que tan al alma propia os
llega, y no derrochéis vuestros bien empleados
caudales para haceros con ello, depositándolo en
aquel templo de las glorias españolas que habéis
levantado en el corazón de la capital de la más rica y
poderosa de las naciones. Exposiciones de pinturas
españolas, compra de cuadros, todo lo hacéis y no
os cansáis de glorificar con ello á España.
Y para que la obra fuese duradera, fundasteis allí en
1914 "The Hispanic Society of America", la Sociedad
hispana de América, que os nombró su Presidente,
la cual lleva y llevará adelante lo emprendido, será
perpetua vocera del nombre español, guardará los
tesoros de la española cultura y facilitará todo linaje
de estudios y trabajos sobre cosas españolas.

Sólo sentís no haber nacido en España; pero sois

tan español de alma, de sentimientos, de cariños,
como el mejor de los españoles. Pasa tan de la raya
este vuestro encariñamiento por España y por todos
sus hijos, que con el fin de regalarles y hacerles á
todos gustosa la estancia en aquel Palacio que les
habéis aparejado, siendo protestante os ocurrió la
peregrina idea de levantar un templo católico, y lo
habéis levantado, luciendo en él una hermosa
lámpara de bronce, regalo de S. M. Alfonso XIII.

Justamente nuestro augusto Monarca os trata de

amigo y os asienta á su mesa particular con su
esposa la Majestad de nuestra augusta Reina, así
como á vuestra propia esposa, cuando á Madrid os
acompaña.

Éstas son, señor, sin ponderaciones y llanamente

recordadas, las cosas que habéis emprendido y
acabado para honra de España. Éste el amor
entrañable, el cariño de hijo, que á España tenéis.

Permitid que vuestro claro nombre venga á honrar

este mi trabajo, dirigiéndooslo como escasa muestra
de la admiración y amistad que os tiene

Julio Cejador.
 ÍNDICE

PÁG.

Dedicatoria
á Archer
Milton
Huntington v
Bibliografía
de la
historia del
teatro 1
Época de
Carlos V. El
Renacimiento
Clásico y el
Eramismo
la lírica
y la prosa 5
Índice por 273
año de
autores y
obras
anónimas
COLOCACIÓN DE LAS LÁMINAS

PÁG.

Gonzalo
Hernández
de Oviedo 44
Dr. Andrés
Laguna 118
El M. Fray
Luis de
Granada 122
El
magnífico
cavallero
Pero Mexía 154
Martín de
Azpilcueta 164
Gutierre
de Cetina 168
Don 174