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Financial Accounting
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Financial Accounting

Eighth Edition


January 2026 | 733 pages | Cambridge Business Publishers

Formerly published by Cambridge Business Publishers, now published by Sage

Financial Accounting equips students with the essential techniques and insights to succeed in today’s business environment. Written for future business leaders, this text balances the preparation of financial statements with their analysis and interpretation. Real-world company data is integrated throughout, helping students learn how investors, creditors, analysts, and managers use financial information to make decisions. Engaging, relevant, and accessible, this book is ideal for both undergraduate and graduate level students and courses ranging from short modules to full-semester programs.

A Complete Teaching and Learning Package
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Learning Platform: This text is available with myBusinessCourse™, an easy-to-use online platform that helps students learn accounting. It includes auto-graded homework, integrated Excel® assignments, and engaging, author-created videos that reinforce key concepts. Designed to complement classroom instruction, it offers interactive tools that build understanding, improve retention, and boost student readiness for the CPA Exam and their entry into the professional world. And it works — 95.5% of students said it helped them learn accounting. myBusinessCourse™ is available with LTI integration for Blackboard, Canvas, Brightspace (D2L), and Moodle.

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About the Authors
 
Preface
 
Brief Contents
 
Contents
 
Chapter 1: Introducing Financial Accounting
Nike

 
Demand for Accounting Information

 
Business Activities

 
Financial Statements

 
Financial Reporting Environment

 
Analyzing Financial Statements

 
Organization of the Book

 
Appendix 1A: Conceptual Framework for Financial Reporting

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualization, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 2: Constructing Financial Statements
NVIDIA

 
Reporting Financial Condition

 
Reporting Financial Performance

 
Reporting on Equity

 
Journalizing and Posting Transactions

 
Analyzing Financial Statements

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 3: Adjusting Accounts for Financial Statements
NVIDIA

 
Accounting Cycle

 
Analyzing, Recording, and Posting

 
Adjusting the Accounts

 
Constructing Financial Statements from Adjusted Accounts

 
Closing Temporary Accounts

 
Summarizing the Accounting Cycle

 
Financial Statement Analysis

 
Summary

 
Guidance Answers . . . You Make the Call

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 4: Reporting and Analyzing Cash Flows
CVS Health Corporation

 
Purpose of the Statement of Cash Flows

 
Framework for the Statement of Cash Flows

 
Preparing the Statement of Cash Flows-Operating Activities

 
Preparing the Statement of Cash Flows-Investing and Financing Activities

 
Additional Detail in the Statement of Cash Flows

 
Analyzing Financial Statements

 
Appendix 4A: A Spreadsheet Approach to Preparing the Statement of Cash Flows

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 5: Analyzing and Interpreting Financial Statements
Pepsico

 
Introduction

 
Vertical and Horizontal Analysis

 
Return on Investment

 
Appendix 5A: Analyzing and Interpreting Core Operating Activities

 
Appendix 5B: Financial Statement Forecasts

 
Summary

 
Key Ratios

 
Guidance Answers . . . You Make the Call

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 6: Reporting and Analyzing Revenues, Receivables, and Operating Income
MICROSOFT CORPORATION

 
Reporting Operating Income

 
Reporting Accounts Receivable

 
Analyzing Financial Statements

 
Earnings Management

 
Appendix 6A: Reporting Nonrecurring Items

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 7: Reporting and Analyzing Inventory
Home Depot

 
Reporting Operating Expenses

 
Inventory Costing Methods

 
Financial Statement Effects and Disclosure

 
Analyzing Financial Statements

 
Appendix 7A: LIFO Liquidation

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Project

 
Solutions to Review Problems

 
 
Chapter 8: Reporting and Analyzing Long-Term Operating Assets
Procter & Gamble

 
Introduction

 
Property, Plant, and Equipment (PPE)

 
Analyzing Financial Statements

 
Intangible Assets

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 9: Reporting and Analyzing Liabilities
Verizon

 
Introduction

 
Current Liabilities

 
Long-Term Liabilities

 
Analyzing Financial Statements

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 10: Reporting and Analyzing Leases, Pensions, Income Taxes, and Commitments and Contingencies
Deere & Company

 
Introduction

 
Leases

 
Pensions

 
Accounting For Income Taxes

 
Commitments and Contengencies and Other Disclosures

 
Analyzing Financial Statements

 
Summary

 
Guidance Answers . . . You Make The Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 11: Reporting and Analyzing Stockholders’ Equity
JP Morgan Chase

 
Introduction

 
Contributed Capital

 
Earned Capital

 
Analyzing Financial Statements

 
Earnings Per Share

 
Appendix 11A: Dilutive Securities: Accounting for Convertible Securities, Stock Options, and Restricted Stock

 
Summary

 
Guidance Answers . . . You Make the Call

 
Key Ratios

 
Questions

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
 
Chapter 12: Reporting and Analyzing Financial Investments
Alphabet

 
Introduction

 
Fair Value: An Introduction

 
Passive Investments in Debt Securities

 
Passive Investments in Equity Securities

 
Investments with Significant Influence

 
Investments with Control

 
Financial Statement Analysis

 
Appendix 12A: Equity Method Mechanics

 
Appendix 12B: Consolidation Accounting Mechanics

 
Appendix 12C: Accounting for Investments in Derivatives

 
Summary

 
Guidance Answers . . . You Make the Call

 
Research and Analysis Using Artificial Intelligence

 
Data Analytics, Data Visualizations, Integrated Excel

 
Multiple Choice

 
Mini Exercises

 
Exercises

 
Problems

 
Cases and Projects

 
Solutions to Review Problems

 
Appendix A: Compound Interest and the TimeValue of Money

 
Future Value Concepts

 
Present Value Concepts

 
Using Excel to Compute Time-Value

 
Exercises

 
Appendix B: Data Analytics and Blockchain Technology

 
Data Analytics

 
Blockchain Technology

 
Summary

 
Video Resources For Tableau

 
Multiple Choice

 
Exercises

 
Problems

 
 
Index
Key features
NEW TO THIS EDITION:
  • The new edition is available with myBusinessCourse™, an easy-to-use online platform that helps students learn accounting. It includes auto-graded homework, integrated Microsoft Excel® assignments, and engaging, author-created videos that reinforce key concepts. Designed to complement classroom instruction, it offers interactive tools that build understanding, improve retention, and boost student readiness for the CPA Exam and their entry into the professional world. And it works—95.5% of students said it helped them learn accounting.
  • Expanded Coverage and Resources: Enhanced focus on data analytics and Excel skill development for career readiness.
  • New Research and Analysis using Artificial Intelligence activities expose students to the implications of AI in accounting.
  • Chapter-Specific Updates: Updates include new content on artificial intelligence, accrual vs. cash accounting, industry ratios, non-GAAP income, partial-year depreciation, lease accounting, digital assets, stock splits, and more, with revised examples, insights, and assignments.
  • Focus Company Changes:
    • NVIDIA replaces Walgreens Boots Alliance Inc. in Chapters 2 and 3.
    • JPMorgan Chase replaces Pfizer in Chapter 11.
  • Global Updates Across the Book:
    • Expanded multiple-choice sections at the end of each chapter.
    • Additional end-of-chapter mini-exercises and exercises.
    • AI-based research and learning questions for each chapter.
    • Updated real data for examples, illustrations, exhibits, and assignments.
    • Revised note disclosures and nonfinancial disclosures.
    • Updated excerpts from business and popular press.
    • Nearly all assignments revised or replaced with new company focuses.
KEY FEATURES:
  • Real Data Incorporated Throughout: Students gain hands-on experience analyzing real financial statements and nonfinancial disclosures, updated with the latest data, including the impact of recent events like the COVID-19 pandemic.
  • Focus Companies for Each Chapter: Each chapter highlights a real-world company, engaging students with practical examples and industry diversity.
  • Road Maps: Action Plans at the start of each chapter outline learning objectives, page references, and assignments for easy navigation.
  • Note and Management Disclosures: Integrated note disclosures teach students how to interpret and apply disclosed information for managerial decision-making.
  • Financial Analysis Discussions: Key financial ratios and their applications are introduced in every chapter, fostering a deeper understanding of accounting methods.
  • Assignments Using Real Data: Abundant assignments based on real company data help students apply their knowledge to real-world scenarios.
  • Balanced Approach: Combines financial reporting, analysis, and decision-making with foundational accounting practices like journal entries and financial statement preparation.
  • 3-Step Process: Analyze, Journal, Post: A structured approach using the Financial Statement Effects Template (FSET) simplifies transaction analysis and recording.
  • Innovative Pedagogy:
    • Business Insights: Real-world examples in every chapter connect classroom learning to practical applications.
    • Decision-Making Orientation: You Make the Call boxes challenge students to solve real business problems.
    • Learning Objective Reviews: Guided review problems with video support reinforce comprehension.
    • Research Insights: Relevant academic research highlights the connection between modern research and business practices.
  • Flexibility for Courses of Varying Lengths: Suggested chapter coverage accommodates both short and extended course formats.