Understanding and Analyzing Financial Statements (6th Edition)
This book introduces a financial statement analysis approach to the first course in accounting. As we developed this new approach, we identified two fundamental skills that students should learn in the first accounting course. First, business students should be able to analyze a company’s annual report and conclude as to its profitability, efficiency, liquidity, and solvency. Second, students should be able to record basic debit–credit journal entries and prepare simple financial statements. The traditional first course in financial accounting emphasizes building students’ knowledge of different kinds of transactions and accounts. While retaining the course content that has been collectively developed by the Academy over many decades, we shifted the emphasis of the course toward building students’ skills first in financial statement analysis, as analysis takes time to develop, and second in transaction analysis. As such, the redesigned course that we present in this book appeals to the needs and interests of today’s students, fits beautifully into the standard curriculum, and is a joy for the experienced instructor to teach.
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