This page intentionally left blank ADVANCED ACCOUNTING Editorial Director: Sally Yagan Editor in Chief: Donna Battista Director of Editorial Services: Ashley Santora Senior Editorial Project Manager: Karen Kirincich Editorial Assistant: Jane Avery Director of Marketing: Patrice Jones Marketing Assistant: Ian Gold Senior Managing Editor: Cindy Zonneveld Production Project Manager: Carol O’Rourke Senior Art Director: Jonathan Boylan Interior Design: Jonathan Boylan Cover Designer: Jonathan Boylan Composition: PreMediaGlobal Full-Service Project Management: Kristy Zamagni Senior Operations Specialist: Diane Peirano Printer/Binder: Edwards Brothers Cover Printer: Demand Production Center Typeface: 10/12 Times Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. The GASB Statement No. 33, Accounting for Financial Reporting for Nonexchange Transactions, Appendix C summary chart, “Classes and Timing of Recognition of Nonexchange Transactions,” copyright by the Governmental Accounting Standards Board, 401 Merritt 7, Norwalk, CT 06856-5116, U., is reprinted with permission. Complete copies of this document are available from the GASB.
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Ltd Pearson Education–Japan Pearson Education Upper Saddle River, New Jersey Pearson Education Australia PTY, Limited CIP data is on file at the Library of Congress. 10 9 8 7 6 5 4 3 2 1 ISBN-13: 978-0-13-256896-8 ISBN-10: 0-13-256896-9 ELEVENTH EDITION ADVANCED ACCOUNTING Floyd A. Beams Virginia Polytechnic Institute and State University Joseph H. Anthony Michigan State University Bruce Bettinghaus Grand Valley State University Kenneth A.
Smith University of Washington This page intentionally left blank In memory of Madeline To Trish To Karen, Madelyn and AJ JOE ANTHONY BRUCE BETTINGHAUS KENNETH A. SMITH This page intentionally left blank ABOUT THE AUTHORS FLOYD A., authored the first edition information in the securities markets. He has published a number of Advanced Accounting in 1979 and actively revised his text of articles in leading accounting and finance journals, includ- through the next six revisions and twenty-one years while main- ing The Journal of Accounting & Economics, The Journal of taining an active professional and academic career at Virginia Finance, Contemporary Accounting Research, The Journal of Tech where he rose to the rank of Professor, retiring in 1995. Accounting, Auditing, & Finance, and Accounting Horizons.
Beams earned his B. degrees from the Univer- sity of Nebraska, and a Ph. from the University of Illinois. He BRUCE BETTINGHAUS, PH., is an Assistant published actively in journals including The Accounting Review, Professor of Accounting in the School of Accounting in The Journal of Accounting, Auditing and Finance, Journal of Account- Seidman College of Business at Grand Valley State University.
ancy, The Atlantic Economic Review, Management Accounting, His teaching experience includes corporate governance and and others. He was a member of the American Accounting Asso- accounting ethics, as well as accounting theory and financial ciation and the Institute of Management Accountants and served reporting for both undergraduates and graduate classes. He on committees for both organizations. Beams was honored with earned his Ph.D at Penn State University and his B.
at the National Association of Accounts’ Lybrand Bronze Medal Grand Valley State University. Bruce has also served on the Award for outstanding contribution to accounting literature, the faculties of the University of Missouri and Michigan State Distinguished Career in Accounting award from the Virginia University. He has been recognized for high quality teaching Society of CPAs, and the Virginia Outstanding Accounting Edu- at both Penn State and Michigan State universities. His cator award from the Carman G.
Blough student chapter of the research interests focus on governance and financial reporting Institute of Management Accountants. Professor Beams passed for public firms. He has published articles in The International away three years ago; however, we continue to honor his contri- Journal of Accounting and The Journal of Corporate bution to the field, and salute the impact he had on this volume. Accounting and Finance., is a Senior Lecturer in JOSEPH H., joined the Michigan the Evans School of Public Affairs at the University of Wash- State University faculty in 1983 and is an Associate Professor of ington.
He earned his Ph. from the University of Missouri, Accounting at the Eli Broad College of Business. He earned his his M. from Ball State University and his B.
in 1971 and his M. in 1974, both awarded by Pennsylvania ing from Anderson University (IN). He is a Certified Public State University, and he earned his Ph. from The Ohio State Accountant.
Smith’s research interests include government University in 1984. He is a Certified Public Accountant, and is accounting and budgeting, non-profit financial management, a member of the American Accounting Association, American non-financial performance reporting and information systems Institute of Certified Public Accountants, American Finance in government and non-profit organizations. He has published Association, and Canadian Academic Accounting Association. articles in such journals as Accounting Horizons, Journal of He has been recognized as a Lilly Foundation Faculty Teaching Government Financial Management, Public Performance & Fellow and as the MSU Accounting Department’s Outstanding Management Review, Nonprofit and Voluntary Sector Quar- Teacher in 1998–99 and in 2010–2011.
terly, International Public Management Journal, Government Anthony teaches a variety of courses, including undergradu- Finance Review, and Strategic Finance. ate introductory, intermediate, and advanced financial account- Smith’s professional activities include membership in ing. He also teaches financial accounting theory and financial the American Accounting Association, the Association of statement analysis at the master’s level, as well as financial Government Accountants, the Government Finance Officers accounting courses in Executive MBA programs, and a doctoral Association, the Institute of Internal Auditors, and the Institute seminar in financial accounting and capital markets research. of Management Accountants.
He serves on the Steering He co-authored an introductory financial accounting textbook. Committee for the Public Performance Measurement Reporting Anthony’s research interests include financial statement Network and as the Executive Director for the Oregon Public analysis, corporate reporting, and the impact of accounting Performance Measurement Association.