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Financial Accounting for Future Business Leaders.

CARL S. WARREN and JAMES M. REEVE, Financial Accounting for Future Business Leaders, (Cincinnati, OH: South-Western, a division of Thomson Learning, 2004, pp., iv, 730).

This new undergraduate introductory financial accounting book uses effective pedagogical approaches with multiple graphics and visual presentations to increase students' interest and understanding of accounting. The material is easy to read and the flow of topics helps students build on the concepts throughout the 14 chapters. Each chapter integrates real-world examples, business concepts, analysis and interpretation, international differences, ethical decision making, and leadership skills.

The book first emphasizes cash flows in a framework for which students have a reference and understanding, which the authors build upon to develop a more concise horizontal analysis model approach than found in many new books, concentrating on the balance sheet and showing the effects of transactions on revenues, expenses, and dividends through an extensive presentation of retained earnings. This approach interrelates the income statement, statement of retained earnings, and the balance sheet. By Chapter 4, these concepts are developed and the accounting cycle is introduced, after which the effect of transactions and analysis of financial statements are explained using journal entries, ledgers, and the preparation of financial statements.

The presented materials will stimulate student interest. The authors use businesses that students recognize (e.g., Wal-Mart, Southwest Airlines, Wendy's, Amazon.com, and Hershey Foods) and examples relevant to the students (using tuition payments to explain deferred revenue and expenses). Even in the chapter problems, instead of using hypothetical companies and situations, the authors incorporate management and financial information from actual companies. The exercises and problems require students to apply the concepts and not just repeat the examples used in the chapter. The cases provide comprehensive problems within one scenario to emphasize the interrelationship of the concepts. Also included are "Building Leadership Skills" activities that require analysis and interpretation skills and challenge students to contemplate the ethical and professional aspects of business decisions.

Another feature is the presentation of material. Chapter topic headings indicate the addressed learning objectives. Many examples, colorful graphics, and visuals aids provide multiple presentations of the topics so that students can read, visualize, and apply the concepts and theories. All chapters also contain many "Strategy for Business," "International Perspective," and "Ethics in Action" scenarios of current business practices that show how to use the concepts and principles for decision making, applied internationally, and shape professional conduct.

For instructors wanting to address more advanced topics or incorporate current professional issues, the chapter and book appendices allow flexibility. Advanced topics like LIFO Reserves are found in chapter appendices. The book appendices include the Annual Report for The Home Depot, the Code of Professional Ethics, and Using the Internet for Financial Research.

In summary, this book provides an approach for introductory accounting students to relate to and grasp easily. It includes interesting and contemporary examples, simplifies many confusing topics, and incorporates ethics and international aspects throughout. It is good for first semester financial accounting course instructors who want to develop students' understanding of how accounting information supports business analysis and decision making.

GAIL HOOVER

Associate Professor

Rockhurst College
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Title Annotation:Book Reviews
Author:Hoover, Gail
Publication:Issues in Accounting Education
Date:Feb 1, 2004
Words:518
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