Introduction to Financial Accounting: U.S. GAAP Adaptation

Reviewed by Amanda Daugherty, Assistant Professor, Grand View University on 12/27/21

Comprehensiveness rating: 5 see less

This textbook covers all of the topics normally covered in a principles of financial accounting textbook. There are good learning objectives listed for each chapter and a good brief summary of each learning objective at the end of each chapter. Each chapter concisely explains each topic in a way that is easy to understand and provides good illustrations. There is good organization by learning objective, and the formatting makes the paragraphs easy to read with important terms in bold text. I felt the chapters were quite comprehensive, even touching on some topics that are included in intermediate accounting textbooks. I only have a few notes when comparing this textbook to other introductory financial accounting textbooks. Most introductory financial accounting textbooks I have seen have separated the adjusting process into its own chapter. This textbook combines adjusting entries, financial statements, and closing entries into one chapter; but it covers it all well. The chapter on inventory and the calculation of cost of goods sold under various methods focuses on using a perpetual inventory system; a periodic system is included only briefly in an appendix to that chapter. There is only a brief mention of internal controls with no mention of the Sarbanes-Oxley Act. The book does not cover accounting for investments, but I have found that other introductory financial accounting textbooks have removed that topic as well or moved it into an appendix as it is covered in-depth in intermediate accounting. One noteworthy item is that the answer keys to the end of chapter discussion questions, exercises, and problems are all provided at the end of the file after the textbook; therefore, students have access to the answers.

Content Accuracy rating: 5

I think the authors did a great job of providing accurate information, although I would suggest some edits in Chapter 9 in discussing payroll liabilities, including the Federal Insurance Contributions Act (authors left off the “s” on Contributions). This section has been updated through 2018 for Social Security and Medicare taxes. For this particular topic, I would have liked for the authors to have made it a little more clear that there is no limit on the amount of earnings subject to Medicare tax and that only the portion for Additional Medicare Tax is not matched by the employer. There is also an error where the text states that all employees must pay unemployment taxes. This needs to be updated to state that unemployment taxes are paid by employers, not employees. Later the text showed the correct payroll journal entries, but the text is incorrect. I also noted in the example journal entry for the declaration of a dividend in Chapter 10, the authors show a debit directly to Retained Earnings instead of using a Dividends account first. However, they did make use of the Dividends account in Chapters 1 and 2.

Relevance/Longevity rating: 5

The text is relevant even with many of the example financial statements being dated 2015, especially in the beginning chapters. A few of the examples have been updated to 2018 in the middle chapters including a classified balance sheet, notes to the financial statements, and the 2018 FICA taxes. There is also a brief mention of the Tax Cuts and Jobs Act and the updated corporate income tax rate. Even though the information presented is correct, I would like to see an update to the dates in the examples as well as to the exercises and problems at the end of the chapters so that students know that the information is still relevant today. Some of the dates in the examples in Chapter 12 on financial statement analysis have been updated to 2021, but some of the exercises at the end of the chapter are dated 2012.

Clarity rating: 5

The information in this textbook is presented using very clear and concise language. The authors have explained the material in a way that is easy to understand but have also not left out important technical terms. They have simplified complex definitions and concepts. There are only a couple of examples in which I wish there was a little more clarity. There were a couple of instances in which a number was provided in a journal entry, but the calculation was not shown. While it may be simple for an accountant or faculty member to calculate the number, a student new to accounting may find that frustrating. Also, there were example journal entries that included the account Cash Over / Short; but the text did not really explain the use of the account, the type of account, or where it would belong on the financial statements.

Consistency rating: 5

This book is consistent in its organization, formatting, and writing style. It is very easy to follow with consistent terminology.

Modularity rating: 5

Financial Accounting is a subject in which later chapters build on the knowledge learned in earlier chapters. It is important that the first three chapters are covered first in that order as they build on each other until the entire accounting cycle is covered. The later chapters are designed to build on the knowledge from the first three chapters. The text is easy to read as it is broken into learning objectives and smaller topics with subheadings within those learning objectives. The amount of content included in each chapter is comprehensive yet manageable.

Organization/Structure/Flow rating: 5

The organization of the book is logical. The information flows well from one topic to the next and from one chapter to the next.

Interface rating: 5

I reviewed this textbook in a pdf format, but it is also available online and in an ePub format. I found it extremely easy to navigate as there are links to each Chapter and each learning objective in the table of contents. There are many tables, charts, illustrations, and example financial statements that are easy to read and help the reader to better understand the material. I was also able to search for key terms.

Grammatical Errors rating: 5

The text contains no material grammatical errors. I did notice in one paragraph that two sentences near the beginning of the paragraph were repeated near the end of the paragraph. I was not opposed to having that concept reiterated, but I do not think that was the intent of the authors. This is very minor, especially when considering an entire textbook.

Cultural Relevance rating: 5

As this textbook specifically covers U.S. GAAP (Generally Accepted Accounting Principles), it is relevant in the United States. I did like the references to IFRS (International Financial Reporting Standards) so the reader is aware that there are other accounting standards in the world. I also liked the specific mention that LIFO (last in, first out) is not allowed under IFRS.

Comments

I really like this textbook. I think the simple explanations make accounting easy to understand for all business students, not just accounting majors. There is great formatting and organization. The text is concise yet provides examples, illustrations, and explanations so that the reader can understand both what is being done and why it is being done that way. There are also a lot of exercises and problems at the end of the chapter to practice the material.

Reviewed by Heidi Derstine, Lecturer, James Madison University on 8/21/21

Comprehensiveness rating: 5 see less

The textbook is comprehensive in its coverage of all the usual material taught in an introductory financial accounting class. The concept self-check, summary of learning objectives and discussion questions all help the student assess their understanding of the material as they read the chapters. There are plenty of exercises and problems for each chapter for an instructor to assign as practice or homework. With that said, the solution is provided for the exercises and problems, which some instructors may not like. In the PDF version, the textbook provides a descriptive table of contents but no index or glossary.

Content Accuracy rating: 5

I did not notice any inaccuracies.

Relevance/Longevity rating: 5

For this type of material, no significant changes occur often. Updating figures and dates used in examples, exercises and problems would be easy. I didn’t see any real-world data presented that would need to be updated on a regular basis. This text also doesn’t address IFRS reporting standards.

Clarity rating: 5

This textbook can be easily comprehended by an entry level accounting student with good examples and figures provided. The material is presented in a concise and clear way.

Consistency rating: 5

The terminology and framework of each chapter is consistent. The exercises and problems were formatted and worded the same way as the material presented in the chapter.

Modularity rating: 5

Chapters are divided into smaller segments, which accommodates different lengths in courses well. This text doesn’t have extraneous information, which makes it manageable and easy for the students to follow.

Organization/Structure/Flow rating: 5

The order of the topics is logical. It is like many other introductory financial accounting textbooks.

Interface rating: 5

I found the textbook to interface well in the pdf and the online HTML format with no issues of distortion of images/charts or any other display feature. All the text was very legible. To access a hardcopy, the link took me to Amazon. On the Amazon site, the textbook is currently unavailable.

Grammatical Errors rating: 5

I didn’t notice any grammatical errors.

Cultural Relevance rating: 5

I did not find any part of the text culturally insensitive or offensive.

Comments

I really liked this textbook. The textbook’s organization is straight forward. It has great graphics to help students understand the material with good exercises and problems. I was impressed with how easy the online homework was to use. Since it follows the flow of most introduction to financial accounting course textbooks, I think many instructors could easily make the transition to this textbook.

Reviewed by Zlatinka Blaber, Assistant Professor of Accounting, Salem State University on 5/26/20

Comprehensiveness rating: 5 see less

The book contains 13 chapters - more than enough for a college semester of 10-15 weeks. It covers the accounting process, accounts, journal entries, ledgers, financial statements, financial statement analysis, and types of business entities, among others. These are topics usually seen in any other financial accounting textbook. There are chapter summaries, discussion questions, exercises, and problems with solutions for each chapter.

Content Accuracy rating: 5

I did not notice any inaccuracies.

Relevance/Longevity rating: 5

The book is very relevant (2019). It is current in its discussion of accrual accounting, accounting standards, etc.

Clarity rating: 5

The book is clear and uses colors and symbols appropriately.

Consistency rating: 5

I did not notice any inconsistencies.

Modularity rating: 5

The chapters follow in a logical order, with appropriate sections and sub-sections.

Organization/Structure/Flow rating: 5

It follows the order of most other similar texts - accounting cycle, accounts, financial statements, and lastly - financial statement ratios and analysis.

Interface rating: 5

The tabular analysis of transactions (bird's eye view on the effect of transactions on assets, liabilities, and equity accounts) is used in color. Plus and minus signs are well used as visuals, arrows as well.

Grammatical Errors rating: 5

Excellent use of English grammar and style.

Cultural Relevance rating: 5

The focus is on U.S. GAAP, as the title states, not on IFRS or other country-specific GAAP.

Comments

I really liked this book upon my review of its PDF format. There is plenty of material to select from. Students are likely to like the visuals and find the many solutions to exercises and problems very helpful.

Reviewed by Lillian Grose, Assistant Professor, University of Holy Cross on 12/18/19

Comprehensiveness rating: 5 see less

The textbook covers all the important areas for a financial accounting class. There is no index or glossary in the PDF version of the book, but the table of contents is descriptive enough to allow navigation of the material. The online version shows a glossary, but does not allow access. Apparently, additional registration is required for the online version, since much of the text is not accessible from that link. The link to the paper version on Amazon is a bonus for this book.
Material was presented in a clear, concise manner with examples that more closely resemble real-life presentation than is normally seen in textbooks. End of chapter discussions, exercises, and problems were clear and straight-forward and should be easily used by the student. One negative, for some instructors, may be the complete solutions to end of chapter work at the end of the book. Students, on the other hand, often like to see the solutions to help them work through difficult material.

Content Accuracy rating: 5

A cursory review of the text, examples and end of chapter material did not reveal any inaccuracies or errors.

Relevance/Longevity rating: 5

All material appeared to be current. The material was organized in a manner that should make any changes, updates, corrections, or additions easy to implement.

Clarity rating: 5

Material is very readable and written in a clear, concise manner that should be easy accessible to students. In-chapter examples and exhibits enhanced the material.

Consistency rating: 5

Material was seamlessly presented. Terminology was consistent. Use of bullet points made concepts easy to understand. Especially important for students is the consistency of the chapter presentation of the material and the same use of methods and terminology in the end of chapter work.

Modularity rating: 5

Although some of the chapters seemed dense in terms of new material, each chapter was presented in sections that can be easily segmented into individual class period presentations. Several chapters had appendix sections which can be used for optional assignments as needed by the instructor.

Organization/Structure/Flow rating: 5

The organization logically worked through the accounting cycle and financial statements. The chapter on partnerships included a section on sole proprietorship that included accounting for the three types of business formation.

Interface rating: 4

The PDF version was accessible and very easy to read. All images, charts and examples were free from distortion and very legible. The Online version did not seem to have all the links available. The B&W Print link connected directly to the Amazon purchase site showing a very reasonable price for the print copy.

Grammatical Errors rating: 5

No grammatical errors were discovered in a review of the relevant material.

Cultural Relevance rating: 5

Examples were primarily objective references to companies with few references to individual cultures.

Comments

An email to lyryx.com requesting additional information regarding online student assessment and instructor resources received a reply within 30 minutes with instructor access information to additional resources. Although the additional site has not yet been evaluated, the response time indicates an excellent level of instructor support. After review of the support material, the book is definitely a possibility for the Financial Accounting course.