C H A P T E R

A Further Look at Financial Statements o STUDY OBJECTIVES

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T H E N AV I G AT O R
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Scan Study Objectives Read Feature Story Read Preview Read text and answer Before You Go On p. 58 p. 63 p. 69 p. 72 p. 75 Work Using the Decision Toolkit Review Summary of Study Objectives Work Demonstration Problem Answer Self-Study Questions Complete Assignments

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After studying this chapter, you should be able to:
1 meaning N Explain the principlesof generally accepted accounting and describe the

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basic objective of financial reporting.

F E AT U R E S T O R Y

2 qualitative N Discuss theinformation.characteristics of accounting 3 N Identify two constraints in accounting. 4 N Identify the sections of a classified balance sheet. 5 compute ratios N Identify andprofitability. for analyzing a company’s 6 N Explain the relationship between a retained earnings statement and a statement of

JUST FOOLING AROUND?
Few people could have predicted how dramatically the Internet would change the investment world. One of the most interesting results is how it has changed the way ordinary people invest their savings. More and more people are spurning investment professionals and instead are striking out on their own, making their own investment decisions. Two early pioneers in providing investment information to the masses were Tom and David Gardner, brothers who created an online investor bulletin board called the Motley Fool. The name comes from Shakespeare’s As You Like It. The fool in Shakespeare’s plays was the only one who could speak unpleasant truths to kings and queens without being killed. Tom and David view themselves as 20th-century “fools,” revealing the “truths” of Wall Street to the small investor, who they feel has been taken advantage of by Wall Street insiders. Their online bulletin board enables investors to