Principles of Accounting Volume 2 Managerial Accounting

Reviewed by Jorge Zazueta, Adjunct Faculty, American University on 1/19/21

Comprehensiveness rating: 4 see less

The text covers all the usual topics in a Managerial Accounting(MA) course. Service costing and outsourcing are integrated with manufacturing and merchandising costing. Beyond the material discussed in the text, there are consistent references to additional resources for the student to deepen her understanding or get a different perspective. I wish the appendix on Financial Statement Analysis became a regular chapter and that the discussion on Theory of Constraints included a review of Throughput Accounting. There is a useful glossary at the end of each chapter and, by being fully searchable, the book obviates the need for an index.

Content Accuracy rating: 4

I didn't find any significant errors in the text. There is a material variance calculation where the total variance is incorrect, but the mistake is obvious and doesn't affect the general point. From my perspective, there is too much emphasis on payback and IRR in the Capital Budgeting chapter, as the student should be warned more strongly about the flaws of those techniques and the theoretical and practical superiority of Net Present Value.

Relevance/Longevity rating: 5

The overall subject of Managerial Accounting and the topics discussed within the text are as relevant as always. The classical discussions of MA techniques are profusely illustrated with numerous examples and a timely discussion on Enterprise Resource Planning (ERP) solutions.

Clarity rating: 5

The text can be seen as an accessible yet complete manual to perform the typical MA analysis. It is easy to read and easy to scan in search of a detail or formula necessary for a given project.

Consistency rating: 5

The style, terminology, and structure are consistent throughout the text, making it easy to navigate and study.

Modularity rating: 5

While the topics follow a logical order within the text structure, there is little dependence among chapters, and subjects can be approached independently, for the most part, making the book a valuable reference for real work analysis.

Organization/Structure/Flow rating: 5

The chapters follow a coherent order, presenting progressively complex topics while maintaining modularity. The chapters' structure—motivation, discussion, exercises— makes teaching and learning easy and facilitates further consultation and review.

Interface rating: 5

The interface for the online version of the book is user friendly and offers a variety of options for reading and exploring. The hyperlinked table of contents is handy when navigating the text. There are links to instructor and student resources and options for downloading PDF and Kindle formats.

Grammatical Errors rating: 5

There were no major grammar or spelling issues.

Cultural Relevance rating: 5

The text is culturally neutral and focused on the technical aspects of MA.

Reviewed by David Thrope, Adjunct Professor, Mount Wachusett Community College on 6/30/20

Comprehensiveness rating: 5 see less

Typical managerial topics are covered appropriately through text, illustrations and examples including links to videos (in the web based, app based and PDF versions of the book). These topics include:
Understanding cost behavior
Fixed vs. Variable Cost
Cost-Volume-Profit Analysis
Job Order Costing
Process Costing
Activity-Based Costing
Budgeting
Standard Costs and Variances
Decision Making
Capital Budgeting Decisions

There are also two additional topics in the appendices toward the end of the book which are:
Financial Statement Analysis
Time Value of Money

Additionally, there is a section devoted to resources such as accounting software, financial statements from various types of companies, accounting exams and certificates, and accounting organizations. The answer keys are also included here as well as a compressive index. Each chapter has its own glossary which works well if you were to pick and choose which topics you were to include in your course.

Content Accuracy rating: 5

The nature of the topic is that it is rule-based in some instances. The material is presented fairly. If there are multiple methods or situations that involve special treatment, they are covered fully.
An interesting point is that on the website for the book, there is a page devoted to errata and the status of them: (https://openstax.org/errata/?book=Principles%20of%20Accounting%2C%20Volume%202%3A%20Managerial%20Accounting)
An adopter of this book can see that there is a perpetual review from the community to ensure that accuracy is addressed and maintained.

Relevance/Longevity rating: 5

Content is up to date, but not in a way that will quickly make the text obsolete within a short period of time. The text is written and/or arranged in such a way that necessary updates will be relatively easy and straightforward to implement.

The Copyright for this book is 2019©. The versions that appear to be addressed the quickest are the web-based and app versions (Android, IOS, Kindle). The PDF and the print version which is derived from it lag behind a bit. Nonetheless, it is relatively simple for materials to be upgraded. Linked videos, which can become obsolete can be replaced if the material is no longer available.

Clarity rating: 5

The text is written in lucid, accessible prose, and provides adequate context for any jargon/technical terminology used. The text is easy to understand. Formulas are presented in practical ways with plenty of examples and explanations of how to use in Excel.

Consistency rating: 5

The text is internally consistent in terms of terminology and framework. The framework is very consistent from chapter to chapter. It starts with an overview of the topic (Why It Matters), the topics themselves, terminology (Key Terms), a chapter summary, various review problems and exercises and ends with thought-provoking problems. Within each topic, formulas are clearly indicated in a larger size font, bolded and with a background that makes them stand out on the page. The Think It Through paragraphs that appear periodically raise challenging questions that allow a reader to reflex and absorb the material. Your Turn provides an example to work through. The solution is readily visible providing immediate feedback on your success. Occasionally, inserts are included that deal with ethical issues.

Modularity rating: 5

The text can be chopped up and easily rearranged to suit anyone’s needs. There are links to topics within the book but they do not necessarily impede the focus and understanding of a topic. The book can be customized for anyone’s specific needs

Organization/Structure/Flow rating: 5

The standard flow of the topics is utilized in this textbook. It is the familiar and redundant framework of the textbook that will help students navigate through this.

Interface rating: 5

The standard flow of the topics is utilized in this textbook. It is the familiar and redundant framework of the textbook that will help students navigate through this.

Grammatical Errors rating: 4

There are various typos and grammar errors that do appear in the book but have no negligible impact on understanding the topic. These include:
Extra commas where unnecessary: (P51 “7. Make a decision, and take a course of action.” Remove comma)
Unnecessary hyphenations - P53 “The health-care” Should be “healthcare”
Missing letters - P113 “co ts” should be “costs” error in PDF but not website or apps.
Extra words - P124 LO 2.1 “they reported the these revenues and expenses” - Either “the” or “these” - all versions of the book have this error.

Cultural Relevance rating: 5

The textbook is fairly neutral from a cultural point of view.

Comments

The course cartridge easily loads into Canvas. I can’t comment on Blackboard but it should be similar.
There are also Instructor resources that include PowerPoint presentations which faithfully follow the textbook and can be easily modified to meet the needs of instructors. A Solution Manual is also available.
The video links within the textbook are convenient but there are better materials out there. Because “choice” and customization is a hallmark of OER materials, If you can find something better, use it.

Reviewed by Adena Lejeune, Division Chari/Associate Professor, Louisiana College on 4/16/20

Comprehensiveness rating: 4 see less

This book includes all of the chapters typically found in a Principles of Managerial Accounting text. I liked 13-chapter format because that would fit well in a semester. I was a little disappointed that Chapter 8, Standard Costs and Variances, included only a brief introductory paragraph on fixed overhead variances. It did not give any formulas or instructions for calculating the fixed overhead variances. I was also disappointed that the Budgeting chapter only gave a brief explanation of a flexible budget with out really explaining how one is created.

Content Accuracy rating: 5

I did not read every chapter, but I did not find any inaccuracies in the sections I read.

Relevance/Longevity rating: 5

There is always the possibility of a need to update an accounting textbook due to new standards, but principles level books do not need updating as often as higher-level accounting texts. I did not notice any content in this book that would make it more susceptible to obsolescence than is usual.

Clarity rating: 5

In some areas, this book excelled in clarity. I found Chapter 10, Short-Term Decision Making, to be very easy to read and understand. I think my students would be able to comprehend the explanations and follow the examples.

Consistency rating: 5

In terms of consistency, I liked that the variable overhead variances were presented in the same format and using the same terminology as the materials and labor variances. Although the budgeting chapter did not explain flexible budgeting as well as I would have liked, I was glad to see that flexible budgeting was included again in the variances chapter. The created a nice bridge between the two chapters.

Modularity rating: 5

The book included appropriate sections.

Organization/Structure/Flow rating: 4

I would prefer for the chapters on job order costing and process costing to be right after the introduction chapter. This allows for inventory to form a link between the financial accounting class and the managerial accounting class.

Interface rating: 5

I did not notice any problems.

Grammatical Errors rating: 5

I did not notice any grammatical errors in the sections I read.

Cultural Relevance rating: 5

I did not notice anything offensive in the sections I read.

Comments

No other comments.

Reviewed by Beth Sanders, Professor, Hawaii Community Colleges on 1/5/20

Comprehensiveness rating: 4 see less

This text is sufficiently comprehensive for an introductory managerial course. The topics covered are those typical of a 200 level course. My reasons for not rating the text a 5 are (1) there is not a comprehensive problem included in the text, (2) there is not a test bank, (3) students did not find the PowerPoint slides helpful when reviewing, and (4) the instructors manual only provides the numerical or multiple choice answer; steps to the solution are not included. At times it is difficult to know if the manual contains a mistake or if the reader has misunderstood the question or text.

Content Accuracy rating: 5

Most texts contain minor errors and this one does as well. I overlooked a few errors I found in the early chapters but in November 2019 I submitted two issues for review. I received an email acknowledging receipt with a notice that errata received from November to February will be reviewed for the following fall. A check of recent errata submissions for the text shows few submissions requiring corrections. The terminology and examples used in the book are typical of the United States mainland, which can be considered bias but it is not unexpected or even intentional.

Relevance/Longevity rating: 5

As an introductory text, the content focus is basic accounting policies and procedures, which are not prone to frequent change. The nature of the text, therefore, keeps content up-to-date and without risk of becoming obsolete within a short period of time. The Open Stax procedures for handling corrections on an annual basis provides a relatively easy and straightforward means of making updates and revisions. The use of headings and learning objectives means new sections can be added and existing content be updated with relative ease.

The Financial Accounting Standards Board (FASB) has released four major updates since 2014 which go into effect in 2018, 2019, and 2020. There will likely be more coming based on the current political climate. The current updates apply to financial accounting more than managerial, and their complexity places them in higher level accounting classes and more advanced accounting texts. Mentioning them as part of the chapter covering the differences between financial and managerial accounting would increase the perception of the text as current and up-to-date. Similarly, inclusion of simplified explanations of new terms and processes relative to accounting, i.e. bitcoin mining, blockchain, cryptocurrency, would be meaningful to students and keep the textbook relevant and up-to-date.

Clarity rating: 5

The text utilizes appropriate language that is understandable and accessible. Key terms appear in bold text the first time they are used in a chapter and an alphabetical list of all the chapter's key terms and their definition appears on the first page following the chapter conclusion and before the chapter assessment tools. Each chapter also includes a summary by learning objective that condenses the material into key, concise points.

Consistency rating: 5

The text is internally consistent with most terminology and the framework of each chapter is similar. There are 13 chapters, which average 35 pages of reading material exclusive of key terms, summaries and assessment tools. The largest chapter is 44 pages in length and the shortest is 25 pages. There are an average of 5 learning objectives per chapter, with each one discussed, on average, by 7 1/3 pages of reading material. Students considered the length of the chapters and the words per page burdensome, but no more than any other accounting textbook. They found the find function of the PDF version especially helpful.

Modularity rating: 5

In order to cover all chapters of the text in a class that met once a week, students were typically assigned a chapter a week. The use of numbered learning objectives in each chapter makes it feasible to eliminate parts of a chapter or include a section of a chapter with another chapter. The numbered learning objectives assigned to the assessment tools were especially helpful, making it possible to make assignments relative to the material covered in class.

Organization/Structure/Flow rating: 5

The chapters in the book are organized in an order commonly found in managerial accounting textbooks. The only exception I noted was the inclusion of Cost-Volume-Profit Analysis before Job Order, Process, and Other Costing methods. The flow of each chapter is logical and the inclusion of numbered learning objectives is helpful, especially when selecting questions, exercises and problems. Assessment tools are logical and consistent in each chapter, starting with multiple choice questions covering all learning objectives, which are followed by brief, open-response questions. Next is set A and then set B of exercises, which are followed by Sets A and B of problems. Last are thought provoking open-ended questions that have more than one acceptable response.

Interface rating: 5

My students did not complain of interface issues and I did not experience any.

Grammatical Errors rating: 5

I did not write down the few minor errors I saw in the text so I cannot specifically state them. I do know this text had far fewer errors than the open source accounting textbook I previously used.

Cultural Relevance rating: 5

I did not find the text to be culturally insensitive or offensive and my students did not voice concerns regarding such issues. Pictures of individuals and groups in the text portray diverse cultures and ethnicity and names used in exercises and problems reflect different cultures. As I stated in a previous area, the text is written in a manner consistent with terminology and examples used on the United States mainland. Geographic locations (i.e. southwest), phrases, idioms, nuances and so forth that provide a frame of reference for those who have grownup in the contiguous United States have little meaning for most students, especially the non-native English speakers and those who have never been off the island of Hawai'i.

Comments

I found the textbook easy to use and will continue to use it. My biggest issue is not having a source who can respond to my questions about the text or the instructor's solution manual.

Reviewed by Pam Meyer, Master Instructor, ULL on 11/11/19

Comprehensiveness rating: 5 see less

Very thorough coverage of the topics normally covered in the a managerial text. The amount of information introduced in the first two chapters is immense. I think this might be overwhelming to a student taking an introduction class. While the material is an overview of concepts that will be studied in depth in later chapters, it almost seemed like overkill. That being said, the information is very understandable and complete. In thinking about testing student on this material, I can see a student now knowing what to study. I have not looked at the Instructor Resources. I liked the fact that so many examples are given in the chapter. In addition, there are the traditional multiple choice, questions, 2 exercise sets and 2 problem sets at the end of each chapter. There does appear to be several of the same type of problem included in these. So, it makes it easier to be able to work one in class and assign a different one for homework. Last in each chapter are the "Thought Provokers" that are comprehensive problems tie together the concepts that are covered.

Content Accuracy rating: 5

I didn't notice any obvious errors in the text. I worked some of the exercises and problems (not all) and didn't see any issues.

Relevance/Longevity rating: 5

The content is up-to-date. Good links to videos and articles that are relevant to the information being covered. I've used OER texts in the past and typically they are not updated and the links become out of date. It does cause me some concern with the amount of linked material there is in the text. It is, however, very relevant and would be helpful to a student in understanding the material. I think this extra material is great for helping students to understand why this material might be useful to them in the future.

Clarity rating: 5

I think the text is very readable. Glossary of key terms and definitions is included at the end of each chapter. Very good chapter summaries at the end of each chapter. There are bullet points for each objective highlighting the important information for each.

Consistency rating: 5

I do like the layout of the book. Good linkage in the text to take you to examples that were worked previously but apply to the new material being introduced.

Modularity rating: 4

Each chapter is independent, so I think it would be easy to cover only that that you have time for. I typically can't cover all this material in a single semester. I'm not sure about how easy it would be to skip parts of a chapter unless you left out a whole learning objective.

Organization/Structure/Flow rating: 5

There seem to be two thoughts about organization in managerial texts. Some do Job-Order & Process Costing first. Others, like this text, do CVP Analysis first. I've done it both ways so either way doesn't bother me. The only thing that I found unusual is how late in the text Short-Term Decision Making is covered. I typically like it after CVP Analysis because of the emphasis on fixed and variable costs. I've covered chapters out of order before, so moving this around would be simple to do. "Concepts In Practice" illustrates real-life examples of how this is used in business. "Think It Through" puts the student in a decision-making position and asks them how to use the new information to make a better decision.

Interface rating: 5

Like the formatting. Thought the text had very good illustrations and diagrams. Strong emphasis on examples of how even a small change could make the information look different. Formulas are set aside in colored boxes, so it makes them stand out. Each chapter consistently has feature boxes throughout. For example, "Your Turn" gives the student a change to apply the concepts that were just covered.

Grammatical Errors rating: 5

I didn't read the complete book, but didn't find any errors in the materials that I read.

Cultural Relevance rating: 5

There were a variety of inclusive examples.

Comments

Overall I really like this text and will try it about in a future class. This book is way above what I've looked at before for OER texts.