Preface

Customization

Principles of Accounting is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA) license, which means that you can distribute, remix, and build upon the content, as long as you provide attribution to OpenStax and its content contributors, do not use the content for commercial purposes, and distribute the content under the same CC BY-NC-SA license.

Because our books are openly licensed, you are free to use the entire book or pick and choose the sections that are most relevant to the needs of your course. Feel free to remix the content by assigning your students certain chapters and sections in your syllabus, in the order that you prefer. You can even provide a direct link in your syllabus to the sections in the web view of your book.

Instructors also have the option of creating a customized version of their OpenStax book. The custom version can be made available to students in low-cost print or digital form through their campus bookstore. Visit the Instructor Resources section of your book page on openstax.org for more information.

Art attribution in Principles of Accounting

In Principles of Accounting, most art contains attribution to its title, creator or rights holder, host platform, and license within the caption. Because the art is openly licensed, anyone may reuse the art as long as they provide the same attribution to its original source.

To maximize readability and content flow, some art does not include attribution in the text. If you reuse art from this text that does not have attribution provided, use the following attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license.

Errata

All OpenStax textbooks undergo a rigorous review process. However, like any professional-grade textbook, errors sometimes occur. Since our books are web based, we can make updates periodically when deemed pedagogically necessary. If you have a correction to suggest, submit it through the link on your book page on openstax.org. Subject matter experts review all errata suggestions. OpenStax is committed to remaining transparent about all updates, so you will also find a list of past errata changes on your book page on openstax.org.

Format

You can access this textbook for free in web view or PDF through openstax.org, and for a low cost in print.

Coverage and scope

Our Principles of Accounting textbook adheres to the scope and sequence requirements of accounting courses nationwide. We have endeavored to make the core concepts and practical applications of accounting engaging, relevant, and accessible to students.

Principles of Accounting, Volume 1: Financial Accounting

Chapter 1: The Role of Accounting in Society

Chapter 2: Introduction to Financial Statements

Chapter 3: Analyzing and Recording Transactions

Chapter 4: The Adjustment Process

Chapter 5: Completing the Accounting Cycle

Chapter 6: Merchandising Transactions

Chapter 7: Accounting Information Systems

Chapter 8: Fraud, Internal Controls, and Cash

Chapter 9: Accounting for Receivables

Chapter 10: Inventory

Chapter 11: Long-Term Assets

Chapter 12: Current Liabilities

Chapter 13: Long-Term Liabilities

Chapter 14: Corporation Accounting

Chapter 15: Partnership Accounting

Chapter 16: Statement of Cash Flows

Principles of Accounting, Volume 2: Managerial Accounting

Chapter 1: Accounting as a Tool for Managers

Chapter 2: Building Blocks of Managerial Accounting

Chapter 3: Cost-Volume-Profit Analysis

Chapter 4: Job Order Costing

Chapter 5: Process Costing

Chapter 6: Activity-Based, Variable, and Absorption Costing

Chapter 7: Budgeting

Chapter 8: Standard Costs and Variances

Chapter 9: Responsibility Accounting and Decentralization

Chapter 10: Short-Term Decision-Making

Chapter 11: Capital Budgeting Decisions

Chapter 12: Balanced Scorecard and Other Performance Measures

Chapter 13: Sustainability Reporting

Engaging feature boxes

Throughout Principles of Accounting, you will find features that engage students by taking selected topics a step further.

• Your Turn. This feature provides students an opportunity to apply covered concepts.
• Concepts in Practice. This feature takes students beyond mechanics and illustrates the utility of a given concept for accountants and non-accountants. We encourage instructors to reference these as part of their in-class lectures and assessments to provide easily relatable applications.
• Think It Through. This scenario-based feature puts students in the role of decision-maker. With topics ranging from ethical dilemmas to conflicting analytical results, the purpose of this feature is to teach students that in the real world not every question has just one answer.
• Continuing Application at Work. This feature follows an individual company or segment of an industry and examines how businesspeople conduct the decision-making process in different situations. It allows students to see how concepts build on each other.
• Ethical Considerations. This feature illustrates the ethical implication of decisions, how accounting concepts are applied to real-life examples, and how financial and managerial decisions can impact many stakeholders.
• IFRS Connection. This feature presents the differences and similarities between U.S. GAAP and IFRS, helping students understand how accounting concepts and rules between countries may vary and thus affect financial reporting and decision-making.
• Link to Learning. This feature provides a very brief introduction to online resources and videos that are pertinent to students’ exploration of the topic at hand.

Pedagogical features that reinforce key concepts

• Learning Objectives. Each chapter is organized into sections based on clear and comprehensive learning objectives that help guide students on what they can expect to learn. After completing the modules and assessments, students should be able to demonstrate mastery of the learning objectives.
• Summaries. Designed to support both students and instructors, section summaries distill the information in each module down to key, concise points.
• Key Terms. Key terms are bolded the first time that they are used and are followed by a definition in context. Definitions of key terms are also listed in the glossary, which appears at the end of the chapter.

Assessments to test comprehension and practice skills

An assortment of assessment types are provided in this text to allow for practice and self-assessment throughout the course of study.

• Multiple Choice are basic review questions that test comprehension.
• Questions include brief, open-response questions to test comprehension.
• Exercises (Sets A and B) are application questions that require a combination of quantitative and analytical skills.
• Problems (Sets A and B) are advanced activities that allow students to demonstrate learning and application of multiple learning objectives and skills concurrently in one set of facts. Problems are designed to assess higher levels of Bloom’s taxonomy.
• Thought Provokers are open-ended questions, often with more than one acceptable response, designed to stretch students intellectually.

Effective art program

Our art program is designed to enhance students’ understanding of concepts through clear and effective presentations of financial materials and diagrams.

Figure 1 Journal Entry.

Figure 2 Work in Process Inventory T-Account.

Figure 3 Income Statement.

Figure 4 Organizational Chart.

Figure 5 Cash Interest Payment.

Figure 6 General Ledger.

Answers to Questions in the Book

Students can find odd-numbered answers to Multiple Choice and Questions in the Answer Key. Answers to all odd and even-numbered Multiple Choice, Questions, Exercises, Problems, and Thought Provokers are provided only to instructors in the Instructor Answer Guide via the Instructor Resources page.

Student and instructor resources

We’ve compiled additional resources for both students and instructors, including Getting Started Guides, an instructor solution guide, and companion presentation slides. Instructor resources require a verified instructor account, which you can apply for when you log in or create your account on openstax.org. Instructor and student resources are typically available within a few months after the book’s initial publication. Take advantage of these resources to supplement your OpenStax book.

Community Hubs

OpenStax partners with the Institute for the Study of Knowledge Management in Education (ISKME) to offer Community Hubs on OER Commons—a platform for instructors to share community-created resources that support OpenStax books, free of charge. Through our Community Hubs, instructors can upload their own materials or download resources to use in their own courses, including additional ancillaries, teaching material, multimedia, and relevant course content. We encourage instructors to join the hubs for the subjects most relevant to your teaching and research as an opportunity both to enrich your courses and to engage with other faculty.

To reach the Community Hubs, visit www.oercommons.org/hubs/OpenStax.

Technology partners

As allies in making high-quality learning materials accessible, our technology partners offer optional low-cost tools that are integrated with OpenStax books. To access the technology options for your text, visit your book page on openstax.org.