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CONTENTS vii
5 Presentation of financial position 6.4 The profit or loss statement 154

and the worksheet 104 6.5 Balance sheet and profit or loss
Learning objectives 104 statement 156
Introduction 105 6.6 Statement of profit or loss and other
5.1 Business activities and the worksheet 105 comprehensive income 157
Common errors in recording of transactions 107 6.7 Factors affecting the format of the
5.2 Definition and purpose of the profit or loss statement 159
balance sheet 108 Types of business 160
The purpose of the balance sheet 110 Users of accounts 160
5.3 Elements of the balance sheet 110 6.8 Earnings (or profit) management 160
Assets 110 6.9 The statement of changes in equity 161
Categories of assets 112 6.10 The worksheet 163
5.4 Liabilities 113 Study tools 169
Current liabilities 114 7 Presentation of cash flows 184
Non-current liabilities 114 Learning objectives 184
Assets and liabilities 115 Introduction 185
5.5 Owners’ equity 115 7.1 Cash and cash equivalents 185
5.6 The balance sheet equation 118 7.2 Internal control of cash 186
A simple balance sheet 118 7.3 The statement of cash flows 187
5.7 Some balance sheet ratios 122 Purpose 187
5.8 Influences on the format of the 7.4 What does a statement of cash
balance sheet 124 flows show? 187
Types of business 124 7.5 Cash flow from operating activities 189
Users of accounts 127 7.6 Cash flow from investing activities 197
Limitations of the balance sheet 127 Cash flow from financing activities 198
Format used in the book 128 Increase or decrease in cash in the period 198
Study tools 129 Interest, dividends and income tax 198
6 Presentation of financial performance Non-cash investing and financing activities 199
and the worksheet 142 Study tools 200
Learning objectives 142 8 Accounting for selected assets 212
Introduction 143 Learning objectives 212
6.1 Financial performance measurement 143 Introduction 213
6.2 Income and revenue 145 8.1 Accounts receivable 213
Increases in assets 145 Bad and doubtful debts 214
Decreases in liabilities 147 8.2 Accounting policies for bad and
Excluding contributions by owners 147 doubtful debts and implications for users 217
Revenue recognition 147 8.3 Inventory 218
Examples of revenue recognition 148 Valuing inventory 219
6.3 Expenses 150 8.4 Establishing the cost of inventories 221
Reductions in assets 150 AASB 102 Inventories 221
Increases in liabilities 150 Effects of price changes 222
Excluding distributions to owners 151 8.5 Accounting policies for inventories and
The recognition principle 151 implications for users 224
Examples of expenses 151 8.6 Property, plant and equipment, and
depreciation 225
viii CONTENTS
8.7 Methods of depreciation 225 10.4 Techniques of analysis 290

Why depreciate? 225 Comparison of financial statements over time 290
The straight-line method 229 Trend analysis 290
The reducing-balance method 230 10.5 Ratio analysis 297
Units-of-production method 232 Benchmarks 302
8.8 Accounting policies for depreciation and Profitability ratios 303
implications for users 233 Efficiency ratios 305
8.9 Intangible assets 233 Short-term solvency ratios 306
The cost of intangible assets 234 Long-term solvency ratios 309
Research and development 234 10.6 Market-based ratios 310
Patents 234 10.7 Key limitations of financial statement
Copyright 235 analysis 313
Trademarks or brand names 235 Information problems 313
Franchises 235 Comparison problems over time 313
8.10 Accounting for intangible assets 235 Comparison problems between entities 313
Study tools 237 Study tools 314
9 Accounting for selected liabilities and 11 From the worksheet to debits
sources of financing 250 and credits 334
Learning objectives 250 Learning objectives 334
Introduction 251 Introduction 335
9.1 Accounts payable, provisions 11.1 The traditional approach 335
and accruals 251 11.2 Ledgers, journals and a trial balance 339
9.2 Taxation 254 Ledgers 339
Temporary differences 254 The journal 340
9.3 Sources of finance 256 11.3 End-of-period adjustments 341
Short-term finance 256 Comparison with the worksheet approach 343
Medium-term finance 259 11.4 Final accounts 343
Long-term finance 263 11.5 Computerised accounting systems 345
9.4 Equity finance 264 Study tools 346
Sole proprietorships 264
Partnerships 264 Part 2 Strategic management accounting 356
Limited companies 265
9.5 Classification as equity or debt 266 12 Introduction to strategic management
9.6 Financing structures and financial risk 267 accounting 358
Study tools 270 Learning objectives 358
Introduction 359
10 Analysis of financial statements 278
12.1 Managerial decision making and
Learning objectives 278
accounting information 359
Introduction 279
12.2 External stakeholders and access to
10.1 Users’ information needs 279
management and other accounting
The investor group 279
information 362
Lenders 280
12.3 The organisation as a value chain 363
Employees 281
The industry value chain 365
Analysts 281
Information technology and the value chain 366
Auditors 281
12.4 Strategic management 367
Management 281
Strategy choice 368
Common information needs 281
Strategy implementation 370
10.2 Projections and predictions 283
12.5 Strategic management and
10.3 The common needs explained 285
management accounting information 373
CONTENTS ix
12.6 Factors influencing the form and types of 14.2 Cost behaviours 420
management accounting information 374 Linear cost functions 421
Organisational size as a determinant of The relevant range of activity 421
management accounting system design 374 The choice of the independent variable 423
Organisational structure as a determinant of Variable costs 424
management accounting system design 375 Fixed costs 425
Technology as a determinant of management Cost behaviour: assumptions
accounting system design 375 and limitations 425
Environmental factors as a determinant of Estimating costs 426
management accounting system design 376 14.3 The cost assignment process 429
Management accounting information Direct and indirect manufacturing costs 430
and other organisational settings 376 Costing systems and the implication for costs 431
12.7 Accounting information systems and Product and period costs 433
organisational control: a behavioural Past and future manufacturing costs 434
perspective 377 14.4 Traditional volume based costing
Study tools 379 systems and accounting for overhead 436
13 Performance measurement and Costing methods: absorption and variable
evaluation frameworks 386 costing 437
Learning objectives 386 Absorbing overheads 438
Introduction 387 Traditional volume-based costing systems 438
13.1 Organisational goals and performance Predetermined overhead absorption rates 442
measurement 387 14.5 Activity-based costing systems 444
Performance measurement 388 14.6 Presenting cost information for
13.2 What is a performance measure and what management purposes:
properties should it have? 388 manufacturing statements 451
The strategic nature of performance measures 389 Variable costing versus
13.3 Organisational structure and performance absorption costing 453
measurement systems 390 Study tools 455
Executive remuneration and business 15 Budgeting and performance
performance 392 reporting 466
13.4 The use of financial measures to assess Learning objectives 466
organisational performance 393 Introduction 467
Investment centres and financial performance 15.1 The purpose of budgets 467
measures 394 Encourage planning 467
13.5 Non-financial measures: an alternative Coordinate functions within an organisation 467
view of organisational performance 400 A form of communication 467
13.6 The BSC: a comprehensive performance Provide a basis for responsibility accounting 468
management framework 402 Provide a basis for a control mechanism 468
Evaluating organisational performance with a Authorise expenditure 468
balanced scorecard 402 Motivate employees 468
Integrated reporting and the balanced 15.2 The budget process 469
scorecard 406 The budget period 472
Study tools 409 15.3 Preparation of the master budget 472
14 Costs and cost behaviour 418 15.4 Sales and production budgets 479
Learning objectives 418 15.5 Budgeting for overhead expenditure 490
Introduction 419 Study tools 491
14.1 Management’s need for information
about costs 420
x CONTENTS
16 Cost-volume-profit analysis 502 17.8 Qualitative factors 549

Learning objectives 502 Customers 550
Introduction 503 Employees 550
16.1 CVP analysis 503 Competitors 550
Break-even: the general principles Legal constraints 550
of CVP analysis 504 Suppliers 550
The underlying assumptions of CVP analysis 504 Study tools 551
16.2 The contribution margin method 505 18 Capital investment decisions 564
The contribution margin ratio 506 Learning objectives 564
16.3 The margin of safety 507 Introduction 565
16.4 Break-even analysis: models and charts 508 18.1 The strategic importance of capital
The total revenue formula 508 investment decisions 565
The total cost formula 509 18.2 Capital investments and life-cycle issues 567
The total profit formula 509 18.3 The capital investment decision-making
The total contribution formula 509 process 569
What happens at the BEP? 509 18.4 Capital investment: an accrual-
The break-even chart 511 based decision tool 570
16.5 Limitations of CVP analysis 518 Accounting rate of return (ARR) 570
Study tools 519 18.5 Capital investment: Cash-based
17 Accounting for decision making: with decision tools 576
and without resource constraints 530 Payback period 576
Learning objectives 530 Discounted cash-flow techniques 579
Introduction 531 Net present value (NPV) 580
Decisions where there are no resource Internal rate of return (IRR) 586
constraints 531 Comparison of NPV and IRR 589
Decisions where there are resource constraints 531 18.6 Qualitative factors and capital
Mutually exclusive decisions 531 investment decisions 590
17.1 Costs and benefits relevant to decision 18.7 Post-implementation audit 591
making 532 Study tools 593
Future and sunk (past) costs 532 Appendices
Differential (incremental) costs 533 1 Extracts from Woolworths Ltd 2018
Avoidable and unavoidable costs 533 Annual Report 601
Opportunity costs 535 2 Present and future value factor tables 621
Replacement costs 536 Table 1: Future value of $1 621
Comparison with traditional costing methods 537 Table 2: Present value of $1 623
17.2 Costs and benefits relevant to specific Table 3: Future value of $1 per period 625
decisions 539 Table 4: Present value of $1 per period 627
The meaning of relevance 539
Glossary 629
17.3 Fixed and variable costs and the
contribution approach 540 References 641
The range of products 540 Index 643
17.4 Closing an unprofitable section: the
contribution margin approach 541
17.5 Decision making with constraints 543
17.6 The contribution approach with
one scarce resource 543
17.7 Make or buy decisions 546
Where there is spare capacity 547
Where there is no spare capacity 548
xi
Preface
Contemporary Accounting, 10th edition, provides an introduction to accounting for students at universities and other higher
education institutions. With the nature and extent of topic coverage, the text meets the needs of students completing a
first course in accounting. Thus, the text is well suited to fulfilling the requirements of a one-semester unit in accounting for
students enrolled in undergraduate accounting and non-accounting majors or MBA or equivalent post graduate qualifications.
The book provides an excellent overview of the accounting function in business for non-accounting majors, and the approach
taken to financial accounting provides a solid foundation on which accounting majors can better understand the bookkeeping
function. Extensive online materials have been prepared to accompany the 10th edition and are available for instructors and
students who want more material on double-entry bookkeeping to support the concepts covered in the book. Where relevant,
the implications of different accounting policy choices for managers and other external decision makers are discussed.
The objective of this textbook is to convey an understanding of accounting without introducing unnecessary technical
terminology and procedures. Building on basic concepts, it provides a clear understanding of financial statements, their uses
and limitations. Accounting terms and concepts are defined in accordance with official pronouncements. As Australia has
adopted International Financial Reporting Standards (IFRS) for use by all reporting entities in the private and public sectors,
the conceptual basis of Contemporary Accounting relies on the IFRS and relevant pronouncements on the framework issued by
the International Accounting Standards Board (IASB). Where required, these concepts and regulatory requirements are used
to analyse various issues in accounting.
Where appropriate, extracts from annual reports are provided to illustrate contemporary accounting practices. Also
included are extracts from the 2018 Woolworths Limited Annual Report. This report appears in Appendix 1 and students are
invited to refer to it frequently throughout the text.
Worksheets, based upon the balance sheet equation, are used to introduce accounting techniques and principles such as
duality. The in-chapter worked examples and end-of-chapter questions provide students with an understanding of concepts
such as assets, liabilities, equity, income, revenues and expenses, and allow them to see how financial statements are prepared.
This approach avoids the problems often experienced by students in trying to understand debits and credits.
The text covers financial accounting in Chapters 1 to 11, and these chapters focus on the development of accounting
information relevant to the decision-making needs of external users. Chapters 12 to 18 examine the decision-making needs
of internal users (i.e. managers) and provide an introduction to core management accounting topics. In each chapter, learning
objectives and key concepts are identified and highlighted. Review exercises are included and solutions are provided at the
end of each chapter. Additional review questions and problems are provided at the end of each chapter. The problems are
presented in order of difficulty. The more difficult problems are primarily intended for use in MBA courses. The ethics case
studies are intended for all students and are well suited to in-class group discussions. We recommend that students refer to
the comprehensive glossary as they work through the book.
Contemporary Accounting has been presented in a manner that students find easy to read. The response to the first nine
editions of this book has been very positive. However, there are major changes in the 10th edition of the book. These changes
have been made in response to comments from past and current users of the book, and also in response to changes that have
occurred in education, the business world and the accounting profession.
xii PREFACE
A new approach
As is usual, a thorough review of the text has been undertaken which incorporates feedback received and important
changes arising from the Revised Conceptual Framework published by the IASB in 2018. While the main elements of the
text remain, including the conceptual approach and the use of the worksheet, a number of changes have been made and are
summarised below.
The main changes to each chapter are outlined as follows:
»» Chapter 1 has been amended whereby the sections on sustainability reporting have been updated and relocated to Chapter 3.
»» Chapter 2 has been renamed to Business structures and financial reporting. There are significant changes in Chapter 2 to reflect
the new definitions of assets, liabilities, income and expenses arising from the Revised Conceptual Framework published by
the IASB in 2018. It also reflects the new definition of a reporting entity. There have been changes to simplify the format
with the use of more tables to replace long sections of text.
»» Chapter 3 has been renamed to Sustainability reporting, ethics and corporate governance. The material on sustainability from
Chapter 1 has been updated and relocated to this chapter. The section on ethics has been reduced and focuses more on
ethics in accounting.
»» Chapter 4 has been renamed to Different measurement methods. Economic value has been altered to value-in-use.
»» Chapter 5 has been amended to include the new definitions of assets and liabilities. The organisation of material has also
been amended to provide a better flow of the content.
»» Chapter 6 has a new section on the relationship between the balance sheet and the profit or loss statement. It also
incorporates the impact of the new definitions of income and expenses, plus the new accounting standard AASB15 Revenue
from contracts with customers.
»» Chapter 7 is similar to the 9th edition with the addition of updates where relevant.
»» Chapter 8 has been updated with current examples and the section on the theoretical formula in the reducing balance
depreciation method has been removed.
»» Chapter 9 has been renamed to Accounting for selected liabilities and sources of financing. The section on leases has been revised
to reflect the new accounting standard AASB 16 Leases. Some additional information on debt ratios has been added.
»» Chapter 10 has been renamed Analysis of financial statements. It has also been restructured in parts to simplify the format
with the use of more tables to replace long sections of text.
»» Chapter 11 has been renamed From the worksheet to debits and credits and remains similar to the chapter in the 9th edition.
»» Chapter 12 continues to build on the theme of management accounting systems being designed to provide information
to best meet the strategic decision-making needs of management. Recognising that the contemporary challenge for many
managers is to create the greatest value from their organisation’s activities, the chapter covers this topic by employing the
value chain model of business activities in combination with Michael Porter’s generic competitive strategies and five forces
analysis of competitive position.
»» Chapter 13 continues to examine the material on performance measurement, and this material provides a strategic analysis
of performance measurement, including the use of different financial and non-financial performance measures and the use
of the balanced scorecard as a comprehensive performance management framework. The use of the balanced scorecard as
a means for incorporating the non-financial measures incorporated in an organisation’s integrated report is discussed. The
material on Economic Value Added (EVA) has been removed and will be available as an extended online resource.
»» Chapter 14 provides a comprehensive examination of costs, including the nature and behaviour of costs, direct and indirect
costs, product and period costs, and the allocation of overhead costs using traditional volume and activity-based cost
allocation models. The importance of effective cost reduction strategies to enhancing the financial sustainability of an
organisation, particularly in the resources sector, is identified and serves to reinforce the idea that different costs are used
for different decision-making purposes.
PREFACE xiii
»» Chapter 15 examines the nature and purpose of budgets with a detailed practical illustration of the development of a
master budget and the nature and purpose of projected financial statements.
»» Chapter 16 examines cost-volume-profit analysis, placing greater emphasis on the significance of operating leverage to
decisions about pricing, volume and cost structures as they affect organisational profitability.
»» Chapter 17 examines short-term decision making with and without resource constraints, as well as key management
accounting concepts such as sunk, opportunity and relevant costs.
»» Chapter 18 examines long-term decision making (i.e. capital investment projects). Previously incorporated materials on
financial maths, dealing with uncertainty, sensitivity analysis and post-implementation audits have been removed and are
available as separate online resources.
Additional resources included in the textbook are as follows:
»» Appendix 1 provides an extract from the Annual Report of Woolworths Limited for the year ending 30 June 2018.
Reference is made to the Woolworths financial report throughout the financial accounting section of the 10th edition,
enabling readers to examine the financial report of a real company. Most of the financial accounting chapters include
end-of-chapter questions relating to the report. These questions are intended to encourage student interest in reading
published financial reports and becoming familiar with the contents.
»» Updated recent newspaper articles are used to illustrate the various topics discussed in many chapters. These articles
provide a real-world context for the subject matter discussed, as well as stimulating student interest in accounting as a field
of professional practice.
»» At the end of each chapter we have introduced a new Take it further activity, which affords students the opportunity to
apply critical analysis to highly relevant accounting issues and problems. As critical thinking is an important employability
skill cited in employer surveys across many different careers, providing students with the further opportunity to develop
this significant transferable skill is desirable.
xiv
Guide to the text

As you read this text you will find a number of features in every
chapter to enhance your study of Contemporary Accounting and help
you understand how the theory is applied in the real world.
PART OPENING FEATURES CHAPTER OPENING FEATURES

Meet real professionals in this area in the Identify the key concepts that the chapter will cover
Practitioner Perspectives at the start of each part, with the Learning objectives at the start of each
and gain an insight into how accounting theory relates chapter.
to and informs their day-to-day practice. 3 4
Chapter 1 IntroductIon to accountIng 9

Practitioner Perspective Chapter 1
Lawrie Tremaine
InternalIntroduction
users to accounting
Lawrie Tremaine is a finance executive with over 30 years’ experience in
financial and commercial leadership. Lawrie is currently the CFO at Origin The major internal user of accounting information is the management of an entity. For a small entity this
Energy and was previously the CFO at Woodside Petroleum for six years. is likely to be the owner, or a small number of individuals in the case of a partnership. However, many
Lawrie also worked at Alcoa for 17 years, culminating in five years in Tokyo and businesses are much larger and are owned by numerous individuals or groups of individuals, as is the case
Beijing as Vice President Finance, Alcoa Asia Pacific.
with large entities such as Woolworths, National Australia Bank or Woodside Limited.
A large part of being a Chief the confidence to invest and to cases, the efficiency of decision Often the major investors themselves are owned by others, as is the case with the major financial
Financial Officer for a publicly minimise the cost of the invested making is dependent on the institutions. In such a situation, it is extremely unlikely that the actual owners would or could take an
listed company is informing capital to the company. quality of the underlying active part in the day-to-day running of the entity. Consider the chaos if all the people who bought shares
capital markets, employees and Similarly for national economies financial information. in Woolworths tried to take an active part in the day-to-day running of that business. Instead, these owners
other stakeholders about the to grow, they too need to attract Part 1 of this text will provide
or shareholdersLearning objectives
delegate the authority for the day-to-day running to a group of directors and managers.
financial position and prospects of capital. Capital flows are fluid and you with a broad understanding of
ChapteR 3 SuStainability reporting, ethicS and corporate governance These 79 directors and end
At the managers
of thisare involvedyou
chapter, in the routine
should bedecision-making
able to:
the company. global. Capital will preferentially Financial Statements. You will gain
Rido/Shutterstock.com
Financial information contained move to the capital markets which an appreciation of their purpose activities of theLO
entity
1.1 andexplain
their information
what is meant needs
by are
theequivalent to that
term ‘accounting’
in the Financial Statements, along are fair, well-regulated and function and the knowledge to interpret of the small business owner. These needs are normally met by unpublished
LO 1.2 explain the difference between management accounting, financial
with the Operating
Researchers haveand alsoFinancial well,studying
been actively demonstratedmany by liquid
questions and utilisecorporate
capitalconcerning financial statements.
governance. In reports of various kinds, accounting
usually basedand on tax
information provided through
Review and the results presentation flows. Once again, the availability addition, you will learn about the accounting
A number of studies have attempted tooftest whether companies with goodissues corporate governance perform both the financial accounting system and the management accounting
are critical to keeping capital reliable financial and operating of estimation, assumptions LO 1.3 identify the main users of accounting information, and the main
better in terms
markets, of profitability
both debt and equity, and share market performance.
information is vital to the Many studies and show a positive
judgements relationship
underpinning system. The exact nature of the reports varies from entity to entity. A
purposes for which the information is used
between the ownership of shares by theoperation
fully informed. CEO and of firm
globalperformance
and national and some showstatements
financial mixed results.
and how Studies
this department store may require information about the profitability of
have A company
also shownneedsthat to
it attract
is easier for thecapital to control and influence theisboard’s
CEOmarkets. vital to decisions.
the valid analysis of
For example, LO 1.4
each of its departments, identify
whereasthe limitations
a factory of accounting
producing a small information
number
capitalCPA
in 2017 to grow and create
Australia was value.
embroiled For these reasons,
By in controversy which eventually sawa the
public business.
CEO sacked and the entire LO 1.5is likely
of different products to require
discuss information
the factors about thethe
that influence profitability
choice of accounting systems for
definition, this means the company companies must ensure that Contemporary Accounting: a
Board resign. It was alleged that the CEO wielded too much influence over the board. of each product. different types of organisations
must invest in opportunities published Financial Statements Strategic Approach for Users is
An audit
which committee
provide returns in is excess
a subcommittee of the
and other board offully
disclosures directors
inform and written
is anotherfromimportant
the viewpointcorporate
of a The form ofLO each
1.6 report will also vary
demonstrate according to its
an understanding purpose.
of the If and environmental
regulatory
governance
of the costmechanism.
of capital. TheThe costaudit committee mayprospective
current and be chargedinvestors
with varioususerdutiesandincluding:
not a preparer. It avoids the purpose of the report is to assist management,
considerations it needs
that can influence to showdecisions
accounting
» of
overseeing the appointment
capital is determined by the of and ofrelationship withmatters
all the material the external
which auditordebits and credits and focuses on the past transactions and performance, probably measured against some
LO 1.7 explain what is meant by the term ‘economic consequences’ and relate
» availability
overseeingofthe capital and the of and may
appointment impact their
relationship withinvestment.
the internal auditor the language of accountants predetermined standard. For planning purposes, though, a forecast of what
this to the choice of accounting policies
» relative
reviewing risk of the company
compliance with regulations This means ensuring reporting
and accounting standards and how to use and analyse
is likely to happen in the future is more important. These different forms of reports and ways of grouping
FEATURES WITHIN CHAPTERS

or business opportunity. The is consistent with all regulatory financial statements. LO 1.8
» perceived
reviewingrisk internal control
is in turn procedures
impacted requirements but also going beyond With this being the 10th edition,
information are normally identify
referred tocareer
underopportunities
the heading offor‘management
accountants. accounting’.
» overseeing
by a numberthe company’s
of factors, risk management
including practices
this standard as required to meet the text remains up to date and As stated earlier, management accounting is the focus of the second part of this book. At this stage it is
» the
reviewing
quality ofthethecompany’s
investmentfinancial statements
the objective.and recommending themrelevant, to the incorporating
board for approval. The
the Revised worth briefly summarising the different categories of management accounting reports. To do this we need
thesis,
board leverage,
has to sign the off
reputation As a CFO I am
on the financial statements andalso the user
certify that ConceptualaFramework
of they represent true and fairissued
view of to make some generalisations about the needs of managers and to categorise those needs. In practice, of
Identify core ideas and important points with the
and quality of management and
the company.
country risk, among many others.
the Financial Statements of other
companies. I rely on their financial
by the IASB in 2018 and new
accounting standards. I commend Test your progress through each chapter by answering
course, there is a certain amount of overlap between the categories but we need not concern ourselves with
It is one matter to require the formation of an audit committee and another to specify its role and powers. this at present. The broad categories that we have referred to in terms of the needs of managers can be
Key concept boxes, which provide concise definitions of the Stop and think questions as you read. Solutions are
The availability of reliable, complete information as we consider them as this text to you as providing
Theand
above roles areprepared
consistently extensive and are suppliers,
financial not necessarily
tradingcarried out by all, orvaluable,
counterparties, even some, auditinsight
up-to-date committees.
in the found in Table 1.1.
Anand
important
operating issue for all audit
information is committees is whether
joint venture partnerstheoraudit
even committee use,should have itsand
interpretation own funding
analysis of Rather than getting deeply involved at this stage, let us first look at the other broad area we identified –
accounting concepts.
so vital to provide
it is not reliantinvestors with
upon management. acquisition targets.
If it is reliant upon In each of these for
management financial
funding statements.
it may not be able to provided at the end of the chapter.
the needs of users outside the entity: the external users. We shall be returning to the needs of internal users
effectively conduct its duties. in more detail in Chapter 12.
Key concept 3.5: Audit committee Stop and think 1

An audit committee is a subcommittee of the board of directors and part of the corporate governance of What are the needs of internal users? Can you identify any other needs of internal users? If so, can you
a company. Its roles vary according to the company but, in general, the role of the audit committee is to suggest how these would be met?
ensure that the financial statements have been reliably prepared and verified.
The major thrust for the creation of audit committees is to add credibility to the financial reporting process.
The critical issue relates to how independent the audit committee is, as this influences its effectiveness. Ian
Ramsay (2001) prepared a report for the federal government of Australia following the problems with HIH,
One.Tel and others. In his report, Ramsay made the following comments about audit committees.
» An effective audit committee must not only exist and be independent, it must actually meet and be active.
» Audit committee members must be independent.
» Each member should be financially literate or should, within a reasonable period of time after
appointment, become financially literate.
3.5 Enforcement of corporate governance LO 3.5

Identify the approaches
The response of government to company failures has been somewhat different in the USA and Australia. The to enforcing corporate
governance requirements
USA adopted what is described as a ‘black letter law’ approach through the passing of the Sarbanes-Oxley Act
in australia and the USa.
in 2002. This is an extensive legislative response to corporate failures and has many requirements including:
» the establishment of a Public Company Accounting Oversight Board with responsibility for overseeing
the work of audit firms
» significant new rules relating to auditor independence
Key concept 4.1: Wealth
Wealth is a static measure and represents a stock at a particular point in time. This stock can change
over time. So, the wealth measured at the start of a period will not necessarily be equal to the wealth
measured at the end of the period. The difference between the two is the profit or loss for that period
of time. GUIDE TO THE TEXT xv
Key concept 4.2: Profit
38 part 1 financial accounting
Profit represents the difference between the wealth at the start of the period and at the end of
the period. Unlike wealth, which is essentially a static measure, profit is a measure of flow which
summarises activity over a period. 262 part 1 finAnciAl Accounting
Statement of profit or loss and other
FEATURES
To summarise, we WITHIN
time T , as:
CHAPTERS
have shown that we can express the profit for the first period, from time T to 0 comprehensive income
1 In response to the problem of the non-disclosure of leases, the accounting profession issued accounting
profit for period1 = wealth1 − wealth0
The first difference is in the title of the statement: the fact that Jack is a proprietary limited company must
standards that required the reporting of leases that met certain criteria. In Australia, AASB 1008 Accounting
be stated, and the new title does this. In addition, the statement contains comparative figures for the
Analyse in-depth Case studies that present issues in
for Leases was the initial standard and, with the adoption of IFRSs, this was replaced with AASB 117 Leases.
See step-by-step examples of how to approach
Similarly, we can express the profit for the second period, the period between time T1 and time T2, as: previous year, as well as references to a number of notes. These notes contain greater detail than can be
In 2016 this standard was replaced by AASB 16 Leases. AASB 16 requires a lessee to record a lease as an
profit for period2 = wealth2 − wealth1 shown Accounting
on the face of the statement, and so are an integral part of the analysis of the accounts of a company.
important concepts in the Worked examples. 262 part 1 finAnciAl
We have also established that the profit or loss is derived by measuring the wealth of an individual, or context, encouraging you to integrate and apply the
asset and a liability at the present value of the lease payments for the period the lease is non-cancellable.
This will be discussed in more detail in Chapter 10. We can see that down to ‘Gross profit’ the format is
familiar. However,
studywe 9.1then find that expenses are classified into broad categories. These categories are
an entity, at two points in time. Now let us look in more detail at what we are trying to measure and how
we can measure it.
Case
concepts discussed in the chapter to the workplace.
laid down in AASB 101 Presentation of Financial Statements. The other difference is that the statement is
In response to the problem of the non-disclosure of leases, the accounting profession issued accounting
Each one has a clearly marked Commentary section that
We start by examining the case of an individual because this is simpler and more in line with your own called a statement of profit or loss and other comprehensive income. CompanyWe A discuss statements of financialB
Company
standards that required the reporting of leases that met certain criteria. In Australia, AASB 1008 Accounting
performance in detail in Chapter 6.
experience. The underlying arguments and principles are just the same for an entity but the degree of for Leases was the initial standard and, with the adoption of IFRSs, this$was replaced with AASB 117 Leases. $
complexity increases. Let us suppose that we asked an individual to measure his or her wealth; that is, the It is from
Assets
In 2016
the point at
discusses the case.
which the profit is shown that the real differences arise. The most striking
this standard was replaced by AASB 16 Leases. AASB 16 requires a lessee to record a lease as an
these is that taxation is included in the statement of profit or loss and other comprehensive income. This is
of
sum of possessions less debts. asset and a liability
becauseCurrent assets isatrecognised
the company
the present value of the lease payments for
as a separate entity for legal and
the
100tax
000period the lease is non-cancellable.
purposes and its profits are100 000
liable
Non-current
to company assets the sole trader and the partnership1are
tax. In contrast, 900not
000separate legal or taxable1entities:
400 000
Worked example 4.1: Alexia Case study 9.1
their profits are not taxed as such, but only as they form part of the
Total assets income
2 000 000 of the owner. 1 500 000
Alexia came up with the following list of assets and told us that she owed nothing.
Liabilities Company A Company B
Balance sheet
At the start of the year: T0 At the end of the year: T1 Current liabilities $
500 000 $
500 000
We now look at the balance sheet of a proprietary limited liability company and the differences that arise.
A new Toyota Corolla A one-year-old Toyota Corolla Assets
Non-current liabilities 500 000 –
Scout Kozakiewicz
The format uses the current/non-current classification. AASB 101 allows companies to choose an
One new dress The same dress Total
Currentliabilities
assets 1 000
100 000 500
100 000
alternative format in which assets and liabilities are listed in order of liquidity. Most banks list assets and
Five shirts The same five shirts Net
liabilities inassets
Non-current
order ofassets
liquidity and do not use the current/non-current 1 000
900 000 000 000
classification. We discuss1 balance
400
Four pairs of jeans Five pairs of jeans Shareholders’
sheets Total assets
in detail equity5.
in Chapter 2 000 000 1 500 000
reserves
One surfboard One surfboard (Chapter 2) Amounts As you can
up see,
Liabilities
Paid the top part of the balance sheet is similar to those
capital 500 we
000have encountered before,500 except
000
$400 cash $500 cash set aside out of profits for theRetained
inclusionliabilities
Current of dividends and taxation and the fact that a lot of500
profits the 000
detail is included in the notes500
to the
000
and other surpluses statements. For example, Note 6 would contain details of non-current assets bought and sold during the
which are not designed Non-current liabilities 1 000
500 000 1 000 000 –
While the lists above might accurately reflect the assets Alexia controls and what sheto owes, we cannot
meet any liability,
year, as well as the depreciation to date, and that charged during the year.
easily see whether she is better or worse off at the end of the year than she was at the start. With thecommitment
contingency, The Total
lowerliabilities
part of the balance sheet is somewhat different in1that 000 the
000 owners’ equity is referred 500to000
as
benefit of our own knowledge of the world, we could perhaps say that she must be worseoroff because in value of
diminution share Commentary
Net assets
capital. This might consist of different types, each carrying 1 000 000 voting rights, and so1on.
different 000This
000
assets known
everything is one year older. This, however, assumes that the value of her possessions decreases withtotime.
exist at
wouldThe only be difference
apparent
Shareholders’
only ifbetween
equitywe lookedtheatbalance
the detail contained
sheets in the notes.
of Company A and Similarly,
Companythere may000
B is $500 be different
in
the date of the balance
In many cases that is a reasonable assumption, but clearly there are cases where the value increases. For types non-current
of reserves, assets
such asand
a $500 000 inreserve
revaluation non-current
for liabilities.
revalued Company
assets such asAland
has and
just buildings.
borrowed $500
Jack 000a
has
sheet. Reserves do not Paid up capital 500 000 500 000
example, would our attitudes towards the value of her possessions change if the car wasequal a 1956 FJ
cash.
Holden? from the
revaluation bankand
reserve over a period
more of are
details 10 years. It has
provided inpurchased
the statementa machine thatin
of changes has an estimated life of 10
equity.
Leaving that question aside for a moment, you may have noticed that as soon as we started to discuss the Retained
years with profits
zero residual value. B has just signed a lease agreement 500 000to acquire the use of an identical 500 000
measurement of wealth we also started talking of the more abstract concept of value. machine to that purchased by A. The lease agreement is for 10 years
1 000 000 and cannot be cancelled 1 000by 000
>
2.2 Financial statements
LO 2.2 either party unless B fails to make a lease payment. Given these facts, should the balance sheets 601
Identify the main of A and B be any different? In Company A’s balance sheet, total liabilities to shareholders’ equity
Commentary
characteristics of the
for a public company
is 100 per cent. However, for Company B this ratio is only 50 per cent. This suggests that the lease
financial statements of
a public company and Appendix 1
arranged
non-current
The statements
by Company
The only difference
assets and
presented
B is less
between
for $500
the
Jack 000
risky
Pty Ltd
than sheets
balance that arranged
in non-current
of Company
above are forliabilities.
by Company
a privateCompany
companyAand
A. Is this B
A and Company
hasarejust
a fair conclusion?
is $500
borrowed
simpler
000 in
than$500
those 000for
the role and meaning of
from
a public the bank
company. over a period
Woolworths is aofpublic
10 years. It has and
company purchased a machine
its financial that has
statements an estimated
illustrate the usual life of 10
format
consolidated financial
The asset
with recorded in thevalue.
lessee’s accounts is then lease
amortised or depreciated to the statement of profit or
Extracts from Woolworths Ltd 2018 Annual Report
years zero residual B has just signed
statements. of each statement. Refer to the Woolworths financial areport agreement
in Appendixto1.acquire
Note that the use of an identical
statements are
machine
loss and other to that purchased by
comprehensive A. The
income lease
over theagreement
lease period.is for
The10lease
years and cannot
liability be cancelled
is reported by
as a non-current
headed ‘consolidated’.
either
liability party
see theunless
Toexcept the B fails
full portion
annual to make
report, athe
lease
pleaseinvisit
payable next payment.
12 months Given
whichthese
http://www.woolworthslimited.com.aufacts, should
is reported the
andasfollow thebalance
a currentlinks sheets
to the
liability. Investor Centre
Each lease
Extracts from the Woolworths Ltd 2018 Annual Most major
and then
of A and
companies,
B be to any
Reports. such as Woolworths, operate in a parent–subsidiary (or controlled entity)
different? In Company A’s balance sheet, total liabilities to shareholders’ equity
W
payment incorporates principal and interest components; the interest component is treated as an expense.
relationship forcent.
is 10060per a variety
However, of for
reasons.
CompanyIn fact,
B thissuch
ratio companies often
is only 50 per cent.control
This suggests many that companies.
the leaseFor
The liability is systematically reduced in each period by the principal component of each lease payment.
Report are included in the Appendix, and the example, Woolworths
arranged
Therefore, each
by Company has over
lease payment
Auditor’s
70 risky
B is less wholly
is similar
Independence
owned
than subsidiaries,
that arranged includingA.Cellarmasters
by Company Is this a fair conclusion?
to the loan repayment that Company A would be required to make
Declaration
and Safeway.
margin icon indicates places in the text where reference in Case study 9.1.
The asset recorded in the lessee’s accounts is then amortised or depreciated to the statement of profit or
Deloitte Touche Tohmatsu
is made to these extracts. These will help you become

A.C.N. 74 490 121 060
loss and other comprehensive income over the lease period. The lease liability Grosvenor Placeis reported as a non-current
225 George Street
liability except the portion payable in the next 12 months which is reported as Grosvenor
Sydney NSW 2000
PO Box N250 a currentPlace liability. Each lease
familiar with and appreciate the functioning of a real
Sydney NSW 1217 Australia
payment incorporates principal and interest components; the interest component
The Board of Directors
Woolworths Group Limited
DX 10307SSE is treated as an expense.
Tel: +61 (0) 2 9322 7000
The liability is1Bella

systematically
Woolworths Way
reduced in each period by the principal component
Fax: +61 (0) 2 9322 7001
of each lease payment.
company’s financial report.
Vista www.deloitte.com.au
Therefore, each lease payment is similar to the loan repayment that Company A would be required to make
NSW 2153
in Case study209.1. August 2018
Dear Board Members

Woolworths Group Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence
to the directors of Woolworths Group Limited.
As lead audit partner for the audit of the financial statements of Woolworths Group Limited for the financial year ended 24 June 2018,
I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
128 pArt 1 applicable
(ii) any financial accoUntinG
code of professional conduct in relation to the audit.
Yours sincerely
There are also issues relating to the ways in which a business is perceived and the ways in which
management wishes the business to be perceived. Research has shown that managers, especially the
The Ethics and corporate social responsibility Ethics/CSR DELOITTE TOUCHE TOHMATSU
managers of smaller entities, believe bankers are interested in the amount of assets available as security
for a loan or overdraft. There is therefore a temptation to try to enhance the value of assets, perhaps by
icons in the margin highlight ethical issues and
Sometimes managers revaluing land and buildings, before applying for a loan. Similarly, in a number of cases where a business
might feel the temptation
to try to enhance assets is in trouble, assets have been revalued in order to bolster the image of the business and to promote the
discussion of CSR throughout the text. on a balance sheet when
applying for a loan. There
impression of a sound asset base.
In Australia there are severe penalties for directors of public companies or other entities who attempt
can be severeA penalties
V Griffiths
for this. Partner fraudulently to inflate assets or decrease liabilities. In Chapter 1, we discussed contacts, agency costs and
Chartered Accountants
incentives for managers to select certain accounting policies but this does not include fraudulent behaviour.
In Chapter 3, we discussed the concept of ethics and the costs of unethical and fraudulent behaviour.
Stop and think 4

What are the main limitations of a balance sheet? Does this mean a balance sheet is of no use?
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Format used in the book

In this chapter we have defined the nature, purpose and content of balance sheets and highlighted some of
the problems with such statements. We have also introduced the wider context in which accounting reports
can be viewed. Before proceeding, it is important to make sure you understand the definitions involved and
can apply them to real problems. As you have seen, a balance sheet can take many forms and in a book of
this nature there is no need to cover all of them. For simplicity, therefore, we use one format throughout
the book − the one shown for Simple Ltd in Worked example 5.3.
The needs of an entity determine the format of the balance sheet. We have chosen a format appropriate
to an introductory text. Before following a different format, ensure that you understand the reasons behind
it and consider whether the information is presented as clearly as it is in the Simple Ltd balance sheet. This
W format is the one previously required under the Corporations Act 2001 and many companies in Australia are
still using it. Turn to Appendix 1 and study the balance sheet of Woolworths Limited and note its format.
The balance sheet is headed with the name of the entity and the date to which the statement relates. As
explained previously, a balance sheet relates to one point in time and that date needs to be clearly stated
in the heading.
Finally, we emphasise again that a balance sheet’s format may differ according to the requirements of the
users or the owners (as illustrated in the previous section by examples for an individual and a partnership).
Other formats are also possible. For example, it is unlikely that a corner store would be part of a public
Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated,
company. A more in whole orformat
appropriate in part. WCN
in this case may02-200-202
be to list the current assets less the current liabilities.
If current assets are more than current liabilities, this would indicate that the business should be able to
meet its short-term commitments when they become due.
xvi GUIDE TO THE TEXT
END-OF-CHAPTER FEATURES
At the end of each chapter you will find several tools to help you to review, practise and extend your knowledge of the
key learning objectives. Chapter 1 IntroductIon to accountIng 23
Study tools
Summary
Review your understanding of the key LO 1.1
Explain what is meant by the term ‘accounting’
These definitions and recognition criteria are discussed
in Chapter 2.
24 part 1 FInancIaL accountIng
chapter topics with the Summary. In this chapter we have tried to give an idea of what
accounting is and how it pervades both the internal workings LO 1.5
of organisations and the external commercial environment. It Discuss the factors that influence the choice of
can accounting systems for different
work intypes
large,of organisations
LObe1.8
seen at one level as a functional area of business and administration. Accountants medium and
at an external level as an important determinant of business The
smallfactors that influence
organisations the choice
preparing of an
financial accounting system
statements
Identify career opportunities for accountants include the size
survival through its effect on groups such as shareholders, and all types of of the organisation,
information the type
for internal of business
decision making by
Accountants work in many areas and in many types of activity being undertakenalso
andwork
whether it is simple orentities,
complex,
lenders and employees. managers. Accountants in not-for-profit
organisations. Accountants work in public accounting the structure of all
thelevels
organisation and whether the organisation
which include of government and other areas such
firms providing various services including audit and
LO 1.2 isasfor-profit or not-for-profit.
health, education and social services.
assurance, taxation, an advisory service, and insolvency and A failing business will still fail even though it has an
Explain the difference between management
accounting, financial accounting and tax accounting excellent accounting system; on the other hand, potentially
review questions
Management accounting is prepared for internal users and is
largely unregulated. Financial accounting results in financial
successful businesses have been allowed to go bankrupt
because the accounting system did not give any warning
1 For what
statements purposes
prepared is accounting
for external information
users in accordanceused:
with signs or gave them notice too late to allow management to
GAAP.– Taxbyaccounting
the individual
involves the preparation of tax returns take action to rectify the situation.
where– theby the entity
objective is toorreport
organisation?
the activities of the organisation
2 compliance
in Exampleswith werethe
given of certain
tax rules limitations
so that of accounting
the organisation LO 1.6 Can you give examples of your own?
pays information.
3 minimum
the What areamount
some ofofthetaxcareers for accountants?
to the government. Demonstrate an understanding of the regulatory
4 Why would employees require financial information about anand environmental considerations that can influence
employer?
5LO When
1.3 would customers require financial information about aaccounting provider of adecisions
product or service?
Test your knowledge and consolidate your 6 Do you
Identify
the
7 main
the think
maincompanies
Whatpurposes
would provide
users of accounting
is the impactforofwhich
financial information
information,
the information
technology on accounting?
and
is used
The Corporations
if they Act influences
were not required theCorporations
to by the financial reporting
Act?
of companies and other entities required to register with
learning through the Review questions, There

8 Whatare many
is theusers of accounting
difference betweeninformation
management
they include internal users (managers) and external users
ASIC. Developments in technology and outsourcing certain
andand financial accounting?
procedural bookkeeping tasks have also had a major impact
Take if further activity and Problems Take it further

(shareholders, lenders, suppliers, customers, employees,
government and the general public). We have shown that there
upon the function of accounting.
LO 1.7
for discussion and analysis. is Much has been
no perfect writtenreport
accounting aboutthat
thewill
impact
meetofthe
technology on accounting
needs of all and the potential loss of jobs as a result of automation.
The and
users, 2015 publication
that the needs the Australia’s
of users vary. ForFuture Workforce?,
example, published
in the case by the
Explain Committee
what is meantforby
Economic
the term Development
‘economic of
Australia, is one example. Conduct internet research
of a small business the owner may wish to show a low profit to to see if you can locate
consequences’otherand
more recent
relate examples.
this to the choice of
accounting policies
reduce the potential tax bill, but may need to show a high profit
problems for discussion and analysis
in order to persuade a banker to lend the business money. The economic consequences of accounting policies
can influence a manager’s choice of accounting policies.
Chapter 2 Business structures and financial reporting 67
1LO Refer
1.4 to the 2018 Woolworths financial statements in Appendix Accounting
1. numbers are used in various contracts and this, it
a the
Identify
b
What
Does
is the nameofofaccounting
limitations
Woolworths
the auditinginformation
include shares
firm?
as part of the policies
remuneration forbased on their impact on the numbers in the
employees?
W
is argued, creates incentives for managers to choose accounting
We have shown that accounting will be useful only if it is
used ccorrectly
Required Do these
and shares affect the are
if its limitations determination net profit forcontracts.
understood.ofFinancial Woolworths? Managerial compensation and debt contracts create
2 In your own words, describe what you
accounting is based on past information and only includesthink accounting meansincentives
and for
what managers
accountants to do
favour
in a profit-increasing accounting
small and very large
Calculate
those Bob’sthat
business.
elements share
meetof the
the profits overand
definition next three years if hispolicies.
therecognition Political
optimistic costs
estimate is create incentives for managers of large
correct.
3 aDiscuss
criteria forCalculate Bob’s share
whatliabilities,
assets, information of the
you
income, profitswould
believe
expenses over
andthe
be next three
useful
equity. organisations
to theyears if his most
following toprobable
groups favour profit-decreasing
of reportestimate accounting policies.
users: is correct.
ba Calculate
employeesBob’s share of the profits over the next three years if his pessimistic estimate is correct.
cb If the probabilities are 20 per cent that
investors
the
c regulatorsoptimistic estimate will be correct, 60 per cent that the most probable estimate will be correct, and 20 per
d cent that the
suppliers pessimistic
of goods estimate will be correct, should Bob sell for $80 000?
and services
de Discuss
customers. the other factors Bob should consider when deciding whether or not to sell.
4 If you work for an accounting firm, whose perspective should you take – the firm’s, the client’s, the user’s or your own?
ethics
5 You own and case
run a smallstudy
supermarket. What accounting information do you need, and how often?
6 You are the manager of a small local band which are offered $1000 for a three-hour performance. What financial
Tom(accounting)
has been employed
issues doat New Incentives
you have Ltd for
to consider six months,
before after
accepting or recently
rejectinggraduating
the offer? from university with a degree in
Apply what you have learned to real-world accounting. It is his first job after trying to find employment for six months. Tom’s boss has asked him for a favour in preparing
the profit or loss and statement of comprehensive income for the year. She wants Tom to include in income cash received for
ethical dilemmas In the Ethics case study services to be provided next year. She also wants him to record as an asset cash paid for advertisements that were screened on
television two weeks before the end of the accounting period. Tom is aware that management is to be paid bonuses based on
at the end of every chapter. the net profit for the period.
Discuss
a How the transactions should be reported according to your understanding of the IASB Conceptual Framework 2018
b What Tom should do.
Cool Value Cinemas

Go to the online case and answer the questions related to Chapter 2
Suggested answers to stop and think exercises
1 A company allows funds to be raised from members of the public. Therefore, it provides greater access to funds than a
partnership. However, companies are subject to more rules and regulations and these rules are increasing in the wake of
the collapse of companies like HIH, Enron and WorldCom. Shareholders in a limited company are only liable for the
amount paid on their shares, whereas partners may be jointly and severally liable for all partners’ debts. A company is a
separate legal entity, whereas a partnership is not.
2 This is a difficult and controversial question. In the USA the Sarbanes-Oxley Act 2002 places restrictions on the type
of services, other than auditing, that an audit firm can provide to an audit client. The approach in Australia involves
some restrictions and more disclosure about the fees an auditor derives from the provision of other services to an
audit client. The real issue is auditor independence, and some argue that an auditor can provide other services and
still be independent due to professionalism. Others disagree and, partially as a result of what happened with Enron,
argue for restrictions on the amount and type of other services an auditor can provide to audit clients.
xvii
Guide to the online resources

FOR THE INSTRUCTOR
Cengage is pleased to provide you with a selection of resources that

will help you prepare your lectures and assessments. These teaching
tools are accessible via cengage.com.au/instructors for Australia
or cengage.co.nz/instructors for New Zealand.
MINDTAP
Premium online teaching and learning tools are available on the MindTap platform - the personalised eLearning
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smartphone or tablet. Students can read on the go, complete practice quizzes or participate in interactive real-time
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MindTap for Contemporary Accounting: A Strategic Approach for Users is full of innovative resources to support
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• Contemporary Accounting: A Strategic Approach for Users 10th edition eBook
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• “What do you think?” polling questions
• “Why it matters” whiteboard animations illustrating core concepts
• Concept Check and Revision Quizzes
• Additional case studies and appendices
• And more
MindTap is a premium purchasable eLearning tool. Contact your Cengage
learning consultant to find out how MindTap can transform your course.
SOLUTIONS MANUAL
The Solutions manual provides detailed solutions to the review questions and problems in the text.
TEST BANK
This bank of questions has been developed in conjunction with the text for creating quizzes, tests and exams for your
students. Deliver these through your LMS and in your classroom.
xviii GUIDE TO THE ONLINE RESOURCES
POWERPOINT™ PRESENTATIONS
Use the chapter-by-chapter PowerPoint slides to enhance your lecture presentations and handouts by reinforcing the
key principles of your subject.
ARTWORK FROM THE TEXT

Add the digital files of graphs, tables, pictures and flow charts into your course management system, use them in
student handouts, or copy them into your lecture presentations.
FOR THE STUDENT
MINDTAP FOR CONTEMPORARY ACCOUNTING: A STRATEGIC APPROACH FOR

USERS, 10TH EDITION
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MindTap gives you the resources you need to study – all in one place and available when you need them. In the
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xix
About the authors

Phil Hancock is a Professor of Accounting and the Associate Dean of Teaching and Learning for the Faculty of Arts, Business,
Law and Education at the University of Western Australia. Phil has extensive experience in the regulation of corporate
financial reporting, management and international accounting in both the educational and private sectors. Phil was Chair
of the Accounting Learning Outcomes Working Party, which was responsible for drafting the threshold learning standards
for graduates of bachelor and master degrees in accounting in 2010 and revised in 2016. Phil is a Fellow of CPA Australia
and the Chartered Accountants Australia and New Zealand and the Accounting and Finance Association of Australia and
New Zealand (AFAANZ). In 2013 Phil was awarded the Outstanding Contribution to Accounting and Finance Education by
AFAANZ. He is a previous President of the Western Australian Divisional Council for CPA Australia. As an academic, Phil has
held senior positions at the University of Western Australia, Edith Cowan University and Murdoch University, where he was
an Associate Professor in Accounting.
Peter Robinson has taught at all West Australian universities, spending more than 20 years with each of Curtin University
and the University of Western Australia (UWA). Peter has also held teaching appointments with the University of Melbourne,
the University of New South Wales (UNSW), the University of Texas at Austin and the University of South Africa. Peter
has taught the breadth of the accounting curriculum at undergraduate and post graduate level with strategic management
accounting and public sector financial management being his more recent areas of teaching specialisation. Peter is Academic
Co-ordinator for Work Integrated Learning (WIL) for the Faculty of Arts, Business, Law and Education at the University of
Western Australia. Peter is a Fellow of CPA Australia and a member of the Accounting and Finance Association of Australia
and New Zealand (AFAANZ). Peter has also been an active contributor to the development and delivery of study materials
used by candidates seeking admission to the former Institute of Chartered Accountants in Australia and CPA Australia; to
the professional development of managers and senior executives in the for-profit, not-for-profit and public sectors, both
in Australia and internationally; and has regularly consulted with clients in these sectors upon a wide range of financial
and performance management topics. Apart from Peter’s undergraduate and post graduate studies in accounting with
Curtin, UWA and UNSW, he has a Master of Education (UWA). Over the past five years, Peter has contributed, as reviewer,
presenter of professional development material to high school teachers, and as chief examiner in 2011, 2012 and 2017 and
as independent examiner in 2018 to the development and delivery of Western Australia’s Certificate of Education Accounting
and Finance course of studies for Year 12 senior secondary school students.
Mike Bazley (1931–2013) was the inspiration behind the first edition of this book, which now enters its 10th edition. The
success of this text is a tribute to Mike’s perseverance, as many of the publishers he initially approached were not particularly
interested in his idea of adapting the UK text Accounting in Business Context. However, Thomas Nelson, now Cengage
Learning, finally agreed and in 1991 the first edition was published. Sadly Mike Bazley passed away in February 2013. Mike
was an excellent teacher and highly regarded by the students he taught, an outstanding work colleague, a valued friend and a
true gentleman to all that he met. He is deeply missed by his family and many friends and former colleagues.
Mike Bazley was born in the United Kingdom where, having undertaken national service, he joined a medium-sized
company and worked his way to joint managing director. In 1969, Mike migrated to Australia and began his period of
employment at the University of Western Australia, which eventually led him to taking up a lectureship in 1977 in UWA’s
then Department of Accounting and Finance. He subsequently took up a position with Murdoch University where he was
Dean of Studies and Chair of the School of Commerce and Senior Lecturer. In addition to his academic work, he also consulted
for the West Australian state government, conducted public seminars and contributed to various academic and professional
publications. Mike was a Fellow of CPA Australia. Having retired in 1995, Mike still continued to take great interest in the
development of this text.
xx
Acknowledgements
We acknowledge our debt to Aidan Berry and Robin Jarvis, the authors of Accounting in Business Context published in the UK.
This book was originally based on the British text, although the two books are now significantly different. Responsibility for
the opinions expressed and for any errors in this book is entirely our own.
Phil Hancock
Faculty of Arts, Business Law and Education
The University of Western Australia
Peter Robinson
Faculty of Arts, Business Law and Education
The University of Western Australia
Mike Bazley
Cengage Learning would also like to thank the following reviewers for their incisive and helpful feedback:
»» Asit Bhattacharyya (University of Newcastle)
»» Md. Borhan Uddin Bhuiyan (Massey University) Sudipta Bose (University of Newcastle)
»» Robyn Davidson (University of Adelaide)
»» Peter Graham (University of Canberra)
»» Nicole Ibbett (Western Sydney University)
»» Ian Maclean (University of Canberra)
»» Heinrich Oosthuizen (University of Tasmania)
»» Dr Graham Ray (Southern Cross University)
»» Erwei (David) Xiang (Edith Cowan University)
Financial Accounting
Part
1
1 Introduction to accounting
2 Business structures and financial reporting
3 Sustainability reporting, ethics and corporate

governance
4 Different measurement methods
5 Presentation of financial position and the

worksheet
6 Presentation of financial performance and the

worksheet
7 Presentation of cash flows
8 Accounting for selected assets
9 Accounting for selected liabilities and sources

of financing
10 Analysis of financial statements
11 From the worksheet to debits and credits
3
Practitioner Perspective
Lawrie Tremaine
Lawrie Tremaine is a finance executive with over 30 years’ experience in
financial and commercial leadership. Lawrie is currently the CFO at Origin
Energy and was previously the CFO at Woodside Petroleum for six years.
Lawrie also worked at Alcoa for 17 years, culminating in five years in Tokyo and
Beijing as Vice President Finance, Alcoa Asia Pacific.
A large part of being a Chief the confidence to invest and to cases, the efficiency of decision
Financial Officer for a publicly minimise the cost of the invested making is dependent on the
listed company is informing capital to the company. quality of the underlying
capital markets, employees and Similarly for national economies financial information.
other stakeholders about the to grow, they too need to attract Part 1 of this text will provide
financial position and prospects of capital. Capital flows are fluid and you with a broad understanding of
the company. global. Capital will preferentially Financial Statements. You will gain
Financial information contained move to the capital markets which an appreciation of their purpose
in the Financial Statements, along are fair, well-regulated and function and the knowledge to interpret
with the Operating and Financial well, demonstrated by liquid capital and utilise financial statements. In
Review and the results presentation flows. Once again, the availability addition, you will learn about the
are critical to keeping capital of reliable financial and operating issues of estimation, assumptions
markets, both debt and equity, information is vital to the and judgements underpinning
fully informed. operation of global and national financial statements and how this
A company needs to attract capital markets. is vital to the valid analysis of
capital to grow and create value. By For these reasons, public a business.
definition, this means the company companies must ensure that Contemporary Accounting: a
must invest in opportunities published Financial Statements Strategic Approach for Users is
which provide returns in excess and other disclosures fully inform written from the viewpoint of a
of the cost of capital. The cost current and prospective investors user and not a preparer. It avoids
of capital is determined by the of all the material matters which debits and credits and focuses on
availability of capital and the may impact their investment. the language of accountants
relative risk of the company This means ensuring reporting and how to use and analyse
or business opportunity. The is consistent with all regulatory financial statements.
perceived risk is in turn impacted requirements but also going beyond With this being the 10th edition,
by a number of factors, including this standard as required to meet the text remains up to date and
the quality of the investment the objective. relevant, incorporating the Revised
thesis, leverage, the reputation As a CFO I am also the user of Conceptual Framework issued
and quality of management and the Financial Statements of other by the IASB in 2018 and new
country risk, among many others. companies. I rely on their financial accounting standards. I commend
The availability of reliable, complete information as we consider them as this text to you as providing
and consistently prepared financial suppliers, trading counterparties, valuable, up-to-date insight in the
and operating information is joint venture partners or even use, interpretation and analysis of
vital to provide investors with acquisition targets. In each of these financial statements.
4
Chapter 1
Introduction to accounting
Learning objectives
At the end of this chapter, you should be able to:
LO 1.1 explain what is meant by the term ‘accounting’
LO 1.2 explain the difference between management accounting, financial
accounting and tax accounting
LO 1.3 identify the main users of accounting information, and the main
purposes for which the information is used
LO 1.4 identify the limitations of accounting information
LO 1.5 discuss the factors that influence the choice of accounting systems for
different types of organisations
LO 1.6 demonstrate an understanding of the regulatory and environmental
considerations that can influence accounting decisions
LO 1.7 explain what is meant by the term ‘economic consequences’ and relate
this to the choice of accounting policies
LO 1.8 identify career opportunities for accountants.
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extensively raised in this State and large quantities were sold in the
New York market. It is described as follows:—
Fruit of medium size, oval; suture distinct; reddish-purple; flesh
greenish, firm, sweet, dry; poor; usually freestone; mid-season.
Horse Jag. Domestica. 1. Lond. Hort. Soc. Cat. 148. 1831. 2. Mag.
Hort. 9:164. 1843.
Horse Gage 1, 2.
Fruit small, round or slightly oval, red; stone clinging; mid-season.
Hoskins. Americana. 1. Wis. Sta. Bul. 63:42. 1897. 2. Ia. Hort. Soc.
Rpt. 110. 1899. 3. Ia. Sta. Bul. 46:275. 1900.
Originated by a Mr. Hoskins of Pleasant Plain, Jefferson County,
Iowa; and introduced by J. Wragg and Sons, Waukee, Iowa, in 1899.
Tree productive; fruit of medium size, yellow; skin thin, tough;
freestone; mid-season.
Houston County. Species? Mentioned in Cornell Sta. Bul. 38:79.
1892.
How Amber. Domestica. 1. Mag. Hort. 12:398, 399 fig. 1846. 2.
Elliott Fr. Book 419. 1854. 3. Downing Fr. Trees Am. 384.
1857.
How’s Amber 1, 2, 3.
A seedling selected from several hundred brought from New
Hampshire and grown by Hall J. How of South Boston in 1838. Tree
vigorous, productive; fruit of medium size, round; suture shallow;
amber, spotted and mottled with rose; flesh coarsely veined, yellow,
melting, juicy, rich; good; clingstone; mid-season.
Howard. Domestica. 1. Cultivator 1:316. 1853. 2. Ibid. 3:20. 1855. 3.
Mas Pom. Gen. 2:185. 1873.
Howard’s Favorite 1, 2. Howard’s Favorite 3. Favorite d’Howard 3.
A seedling of unknown parentage produced by Elisha Dorr,
Albany, New York. Fruit large, necked, yellow, dotted and shaded
with carmine; stem very adherent; skin thick; flesh coarse, sweet,
rich; clingstone; mid-season.
Howe. Triflora ×? 1. Am. Pom. Soc. Rpt. 248. 1903. 2. Griffing Bros.
Cat. 1906. 3. Ibid. 1909.
Stumpe 3. Stumpy 1.
A seedling of Kelsey grown in the yard of a Mrs. Stumpe, Putnam
County, Florida; introduced by Griffing Brothers in 1906. Fruit large,
roundish, red; bloom delicate; suture a line; skin thin, leathery; flesh
yellow, firm, juicy; good; stone small, oval, clinging; early.
Howell. Domestica. 1. Downing Fr. Trees Am. 302. 1845. 2.
Horticulturist 7:402. 1852. 3. Downing Fr. Trees Am. 921.
1869.
Chapin’s Early 3. Early Purple 2, 3. Howell’s Early 1. Sea 2. Sea 3.
This variety derives its name from B. Howell of Newburgh, New
York, who brought the original tree from Virginia as a sucker. It was
supposed to have been introduced into the Southern States by cions
from Germany. Tree of slow growth; fruit below medium, oval; suture
indistinct; red; flesh juicy, rich, sweet; good; freestone; very early.
Hoyo Smomo. Triflora. 1. Cornell Sta. Bul. 62:23. 1894.
A name used by J. L. Normand, Marksville, Louisiana; probably a
synonym.
H. T. S. 84,761. Species? 1. Rural N. Y. 61:674. 1902.
One of Burbank’s plums. Fruit large, yellow with crimson blush;
flesh yellow, firm, sweet, vinous, juicy; clingstone; a good shipper.
Huankume. Triflora. 1. N. Mex. Sta. Bul. 39:122. 1901.
Reported from New Mexico as weak in growth; fruit small,
roundish, downy; yellowish-red; slightly acid; clingstone; resembles
the apricot in flavor and appearance.
Hudson Gage. Domestica. 1. Downing Fr. Trees Am. 277. 1845. 2.
Hogg Fruit Man. 365. 1866. 3. Guide Prat. 163, 364. 1895.
Hudson 2. Hudson 3. Hudson Gage 2, 3. Hudson’s gelbe
Frühpflaume 3. Reine-Claude d’Hudson 3.
Hudson Gage is one of several good varieties originated by L. V.
Lawrence of Hudson New York. Fruit of medium size, oval; suture
slight; yellow, obscurely streaked with green; bloom thin; flesh
greenish, juicy, melting, sprightly; good; freestone; early; placed in
the catalog of the American Pomological Society in 1877.
Hughes. Munsoniana. 1. Am. Pom. Soc. Rpt. 166. 1885. 2. Waugh
Plum Cult. 195-6. 1901. 3. Ga. Sta. Bul. 67:275. 1904.
Originated in northeastern Mississippi where it is said to be one of
the best of its species. Fruit of medium size, roundish; stem long,
slender; cavity shallow; suture a line; bright red, striped with yellow;
dots large, white; skin thin; flesh yellow, fibrous, watery, sprightly,
subacid quality fair; stone of medium size, turgid, clinging; late.
Hungarian Musk Prune. Domestica. 1. Guide Prat. 158, 363. 1895.
2. Can. Exp. Farms Rpt. 432. 1905.
Basilic 1. Musquée de Besztercze 1. Proune bissioque
(Roumanie) 1. Quetsche musquée de Hongrie 1.
Hungarian Musk Prune is very similar to the German Prune; fruit of
medium size, necked; cavity small; suture shallow; deep purple;
bloom thick; flesh yellow, juicy, sweet, musky, aromatic; stone small,
free; mid-season.
Hungarian No. 1. Domestica. 1. Ia. Sta. Bul. 31:349. 1895.
J. L. Budd of the Iowa Experiment Station received this plum from
Europe with sprouts of his Ungarish. Fruit of medium size, prune-
shape, bright yellow; freestone.
Hungarian No. 2. Domestica. 1. Ia. Hort. Soc. Rpt. 86. 1890.
Imported by J. L. Budd from Russia; of little value.
Hunn. Triflora. 1. Cornell Sta. Bul. 139:43. 1897. 2. Ibid. 175:147.
1899.
Burbank No. 1 1, 2.
A small, round plum named for C. E. Hunn of the New York State
College of Agriculture; apex pointed; suture shallow; deep red; dots
many, yellow; flesh soft, yellow, aromatic; quality fair; clingstone;
mid-season.
Hunt. Munsoniana × Americana. 1. Am. Pom. Soc. Rpt. 78. 1897. 2.
Ia. Sta. Bul. 46:275. 1900. 3. Waugh Plum Cult. 153. 1901.
Originated about 1880 by Henry Hunt, De Soto, Dallas County,
Iowa, from seed of Wild Goose probably pollinated by the De Soto,
trees of which stood near. It was supposed at one time that Lombard
was the male parent but no traces of Domestica blood can be
detected in either tree or fruit; introduced in 1897 by M. J. Graham,
Odel, Iowa. Fruit of medium size, roundish-oval; cavity shallow;
suture a line; dark red; bloom heavy; dots large, conspicuous; skin
thin, not astringent; flesh yellow, firm, mild; quality fair; stone large,
ovate, winged.
Hunt De Soto. Americana. 1. S. Dak. Sta. Bul. 93:20. 1905.
Hunt’s De Soto 1.
Introduced by J. L. Budd of the Iowa Experiment Station; closely
resembles De Soto, differing from it in being a little larger, darker red
and a better keeper.
Ida. Americana. 1. Cornell Sta. Bul. 38:38. 1892. 2. Colo. Sta. Bul.
50:37. 1898. 3. Waugh Plum Cult. 153. 1901.
Originated with D. B. Wier of Illinois. Tree very thorny, of slow,
irregular growth; fruit medium, roundish-oblong; cavity shallow; stem
medium, stout, dull; red over yellow; bloom thick; skin thick; flesh
pale yellow; quality fair; stone roundish, rather flat, clinging; mid-
season.
Ida Green Gage. Domestica. 1. Cole Am. Fr. Book 212. 1849.
A seedling of Reine Claude originating near Mount Ida, New York.
It very closely resembles its parent except that it is more strongly
blushed and is a few days later; obsolete.
Idall. Munsoniana × Hortulana mineri. 1. Cornell Sta. Bul. 38:56.
1892. 2. Am. Gard. 19:234. 1898. 3. Waugh Plum Cult. 173.
1901.
Idal 2. Idol 1. Idol 1, 2.
According to the originator, D. B. Wier, of Illinois, the Idall is a
cross between Wild Goose and Miner. Fruit large, roundish-oval;
cavity shallow; suture a line; red; dots many; skin tough; flesh yellow;
good; stone of medium size, oval, clinging; late.
Imperial. Americana. 1. Ia. Sta. Bul. 46:276. 1900.
A small plum of the De Soto type brought to notice by C. B.
Ginrich, Laporte, Iowa. Fruit round, conical; cavity broad, deep;
suture a line; yellow with red markings; bloom thin; flesh clear yellow,
firm, brisk, acid; good; clingstone.
Impériale Alexandrina. Species? Mentioned in Mathieu Nom. Pom.
436. 1889.
Impériale de Milan. Domestica. 1. Lond. Hort. Soc. Cat. 149. 1831.
2. Hogg Fruit Man. 365. 1866. 3. Mas Le Verger 6:67. 1866-
73.
Mailändische Kaiserpflaume 3. Prune de Milan 2, 3.
Originated near the city of Milan, Italy. Tree large, vigorous,
spreading; fruit medium, oval; suture distinct; stem short, rather
thick; skin tough, dark purple; bloom heavy; flesh greenish-yellow,
juicy, firm, sweet; good; usually freestone; mid-season.
Imperial Ottoman. Domestica. 1. Lond. Hort. Soc. Cat. 149. 1831.
2. Horticulturist 1:11 fig. 1846. 3. Elliott Fr. Book 413. 1854. 4.
Mas Pom. Gen. 2:137. 1873. 5. Mathieu Nom. Pom. 442.
1889.
Impériale de Turquie 4. Impériale Ottomane 5. Imperial Ottoman 3,
4, 5. Ottoman 3. Ottomanische Kaiserpflaume 5. Ottomanische
Kaiserpflaume 4. Türkische Gelbe Pflaume 5.
Supposed to have been brought into this country from Turkey by
William Prince. Tree vigorous, productive; fruit medium, roundish-
oval; suture indistinct; stem of medium length, slender; greenish-
yellow, clouded and mottled with darker shades; bloom thin; flesh
yellow, juicy, pleasant; good; clingstone; very early.
Imperial Purple. Domestica. 1. Downing Fr. Trees Am. 923. 1869. 2.
Mas Pom. Gen. 2:45. 1873.
Imperial Purple 2. Pourprée Impérial 2.
Raised by William Prince, Flushing, Long Island. Tree vigorous,
productive, fruit medium in size, roundish-oval; suture barely
indicated; stem of medium length, slender; intense purple; flesh
yellowish, juicy, sweet; clingstone; mid-season.
Imperial Violet. Domestica. 1. Duhamel Trait. Arb. Fr. 2:99. 1768. 2.
Kraft Pom. Aust. 2:33, Tab. 181 fig. 1. 1796. 3. Prince Pom.
Man. 2:60. 1832. 4. Noisette Man. Comp. Jard. 2:497. 1860.
Die violete Kaiserpflaume mit scheckichten Blattern 2. Impériale à
Petit Fruit Violet 4. Impériale Violette à feuilles panachees 1.
Impériale violette à feuilles panachees 2, 3.
A variety with variegated leaves and fruit, cultivated as an
ornamental.
Imperial Washington. Domestica. 1. Horticulturist 25:204. 1870.
A seedling of Lombard grown by G. P. Peffer of Pewaukee,
Wisconsin. Tree vigorous and productive; fruit large, roundish,
slightly oblate; suture faint; cavity lacking or small; brownish-red;
dots yellow; skin thin, tender; flesh greenish-yellow, firm, juicy, rich;
late.
Improved French Prune. Domestica. 1. Coates Cat. 1908.
Miller 1.
A seedling of Agen grown by Luther Burbank and sold in 1898
under the name Miller to Leonard Coates, Morganhill, California, who
introduced it under the name given above about 1908. Very similar to
its parent but larger and more uniform in size.
Incomparable. Domestica. 1. Downing Fr. Trees Am. 924. 1869. 2.
Mathieu Nom. Pom. 451. 1889.
Incomparable 2. Incomparable Prune 1. Nonpareil 1, 2.
Unvergleichliche 2.
Probably a seedling of the German Prune. Tree vigorous; fruit of
medium size, long-oval; suture shallow; cavity small; deep purplish-
black; bloom heavy; flesh yellow, sweet; good; clingstone; late.
Indian. Domestica. 1. Kraft Pom. Aust. 2:36, Tab. 186 fig. 1. 1796.
Die grosse indianische braunrothe Pflaume 1. Grosse prune
d’Inde rouge 1.
Fruit large, obovate, brownish-red; suture distinct; flesh yellow,
firm; good; obsolete.
Indiana. Hortulana mineri. 1. Mich. Sta. Rpt. 111. 1887. 2. Cornell
Sta. Bul. 38:56, 86. 1892. 3. Waugh Plum Cult. 173. 1901.
Indiana Red 3. Indiana Red 1, 2.
Supposed to have been found wild in Indiana; introduced by Dr. I.
Cramer. Tree tender in severe climates; fruit medium in size, oval;
cavity shallow; stem slender; suture a line; red; bloom thin; dots
minute, small; flesh yellow, firm; quality fair; stone large; oval,
clinging; season late.
Indian Chief. Munsoniana. 1. Am. Pom. Soc. Cat. 36. 1875. 2.
Cornell Sta. Bul. 38:49, 86. 1892. 3. Waugh Plum Cult. 186.
1901.
A southern variety of which the place of origin is not certainly
known; Munson says southern Texas, Onderdonk thinks Georgia,
others consider Arkansas as its birthplace. Tree vasiform, open;
leaves short, broad, finely serrate; petiole short, glandular; fruit of
medium size, oval; stem short, slender; cavity shallow; suture a line;
dots numerous, white; bright red; skin thick; flesh yellow, melting,
insipid; poor; stone long-oval, flattened, clinging; early.
Inkpa. Americana × Simonii. Cir. S. Dak. Exp. Sta. 1910.
Inkpa is a cross between Prunus simonii and Prunus americana
made by N. E. Hansen of the South Dakota Experiment Station, who
introduced the variety in 1910.
Iola. Species? 1. Cornell Sta. Bul. 38:79. 1892.
Originated by D. B. Wier, Illinois. Fruit large, oblong, yellow
covered with red; flesh firm; freestone; late.
Iona. Hortulana mineri. 1. Cornell Sta. Bul. 38:39. 1892. 2. Thomas
Am. Fruit Cult. 490. 1897. 3. Waugh Plum Cult. 153. 1901.
Originated with D. B. Wier, from seed taken from a wild bush in
southwestern Wisconsin. Tree vigorous, upright; fruit of medium size,
oval; cavity shallow; suture a line; flesh yellow, firm, sweet; quality
fair; freestone; late.
Iowa. Americana. 1. Wis. Sta. Bul. 63:43. 1897. 2. Minn. Hort. Soc.
Rpt. 411. 1899. 3. S. Dak. Sta. Bul. 93:20. 1905. From
Allamakee County, Iowa. Fruit medium, oval; red over yellow;
skin astringent; early.
Iowa Beauty. Americana. 1. Kerr Cat. 1898. 2. Ia. Hort. Soc. Rpt.
111. 1899. 3. Ia. Sta. Bul. 46:276. 1900.
Taken from the woods about 1860 by Hugo Beyer, New London,
Iowa. Fruit of medium size, oval, mottled yellow; flesh melting, juicy,
sweet; good; early.
Irby. Hortulana. 1. Vt. Sta. An. Rpt. 11:284. 1898. 2. Waugh Plum
Cult. 181. 1901. 3. Tex. Nur. Cat. 1907.
Erby September 1, 2. Irby September 3.
Found by Dan Irby of Texas growing on the grounds of an old
Indian settlement. Fruit of medium size, bright red; late; similar to
Wayland.
Ireland. Domestica. 1. Can. Hort. 21:391. 1898. Ireland’s Seedling 1.
Fruit of medium size, dark blue; stem slender; cavity deep; suture
distinct; flesh green, tender, juicy; good; early.
Ireland Golden. Domestica. 1. Ont. Fr. Exp. Sta. Rpt. 3:120. 1896.
Ireland’s Golden Gage 1.
Tree vigorous, hardy, productive; good; early.
Irene. Hortulana mineri. 1. Cornell Sta. Bul. 38:79. 1892. 2. Waugh
Plum Cult. 154. 1901.
Originated by D. B. Wier, Illinois. Fruit of medium size, oval; bright
red; skin thick; flesh yellow, firm; clingstone; late.
Iris. Hortulana mineri. 1. Cornell Sta. Bul. 38:56. 1892. 2. Waugh
Plum Cult. 173. 1901.
Originated and introduced by D. B. Wier of Illinois. Fruit medium in
size, oval; cavity shallow; suture a line; red; bloom thin; flesh yellow;
poor; clingstone; late.
Ironclad. Americana. 1. Cornell Sta. Bul. 38:38. 1892. 2. Ia. Sta. Bul.
46:275. 1900. 3. Waugh Plum Cult. 154. 1901.
Illinois Ironclad 1, 2. Illinois Ironclad 3.
A wild variety from Illinois introduced by Stark Brothers in 1890.
Tree dwarf; fruit of medium size, roundish-oval; stem slender; cavity
of medium depth, flaring; suture shallow; dots many, small, yellow;
dark red; bloom thick; skin thick; flesh yellow, firm, meaty, sweet;
quality fair; stone oval, smooth, flattened, clinging; mid-season.
Iroquois. Hortulana mineri? 1. Can. Exp. Farm Bul. 43:39. 1903.
From Charles Luedloff, Cologne, Minnesota. Fruit of medium size,
roundish-heart-shaped; cavity narrow; suture a line; dark red; dots
numerous, small, yellow; bloom thin; skin thick, tough; flesh yellow,
juicy, sweet; quality fair; stone oval, slightly flattened, clinging.
Isaac. Americana. 1. Kerr Cat. 1897. 2. Waugh Plum Cult. 154.
1901.
Brought to notice by M. S. Hubbell from a wild tree near Lincoln,
Nebraska. Fruit small, roundish, red over a green ground; clingstone.
Isabella. Domestica. 1. Pom. Mag. 3:150. 1830. 2. Downing Fr.
Trees Am. 305. 1845. 3. Ann. Pom. Belge 6:93, Pl. 1858. 4.
Hogg Fruit Man. 366. 1866. 5. Mathieu Nom. Pom. 436. 1889.
Die Isabelle 5. Prune Isabelle 3.
An English variety popular sixty-five years ago; said to produce
three crops a year. Tree vigorous; fruit large, oval; suture distinct;
deep, dull red, paler in the shade; dots many, dark colored; flesh
yellow, rich, juicy, brisk; good; clingstone; mid-season.
Isabella. Americana. 1. Kerr Cat. 1900. 2. Terry Cat. 1900
Originated with H. A. Terry, Iowa, in 1893. Tree low, spreading,
productive; fruit of medium size, roundish; dark red on a yellow
ground; good; clingstone; mid-season.
Isle-Verte. Domestica. 1. Quintinye Com. Gard. 68, 70. 1699. 2.
Duhamel Trait. Arb. Fr. 2:107. 1768. 3. Prince Pom. Man.
2:94. 1832. 4. Mas Pom. Gen. 2:39. 1873.
Grosse Grüne Pflaume 4. Grüne Inselpflaume 4. Ilevert 2, 4. Ile
Vert 3. Ile verte 3. Ille verte 3. Illvert 1. Inselpflaume Grüne 4. Isle
Vert 3. Isle Verte 2. Prune de Savoye 3. Prune Ileverte 4. Savoy 3.
Tree very prolific; fruit of medium size, oval; suture a line; stem of
medium length; skin yellowish-green, reddish on the sunny side;
flesh clear yellow, juicy, sweet; clingstone; used for preserves and
pickles.
Italian Damask. Domestica. 1. Duhamel Trait. Arb. Fr. 2:75. 1768. 2.
Kraft Pom. Aust. 2:42, Tab. 195 fig. 1. 1796. 3. Prince Pom.
Man. 2:83. 1832. 4. Downing Fr. Trees Am. 302. 1845. 5.
Poiteau Pom. Franc. 1846. 6. Hogg Fruit Man. 366. 1866. 7.
Guide Prat. 157, 353. 1895.
Damas d’Italie 1, 7. Damas d’Italie 2, 3, 4, 6. Die wälsche
Damascenerpflaume 2. Prune Damas d’Italie 5. Prunus italica 5.
Supposed to have originated in Italy. Tree productive, doing
especially well in the South; fruit of medium size, roundish; cavity
small; suture distinct; dark purple; bloom heavy; dots small, light;
flesh yellowish-green, juicy, firm, sweet; good; stone thick, free; mid-
season.
Italienische Damascene (Diel’s). Species? Listed in Mathieu Nom.
Pom. 436. 1889.
Damas d’Italie.
Italienische Damascene (Liegel’s). Species? Mentioned in Mathieu
Nom. Pom. 436. 1889.
Damas d’Italie.
Itasca. Nigra. 1. Mich. Sta. An. Rpt. 111. 1887. 2. Cornell Sta. Bul.
38:39. 1892. 3. Waugh Plum Cult. 171. 1901.
Itaska 1, 2.
An inferior variety from Minnesota; introduced by P. M. Gideon,
Excelsior, Minnesota, and W. F. Heikes, Huntsville, Alabama. Tree
dense and stocky; fruit of medium size, oblong, dull purple-red; skin
thick; flesh firm; quality fair; clingstone; mid-season.
Ithaca. Species? 1. Cornell Sta. Bul. 38:79. 1892.
Supposed to have originated with Peter M. Gideon, Minnesota.
Ivason. Americana. 1. Kerr Cat. 1897.
From Iowa. Tree vigorous; fruit large, roundish, purplish-red; semi-
clinging; mid-season.
Ives. Domestica. 1. Mag. Hort. 15:118. 1849. 2. Cole Am. Fr. Book
211. 1849. 3. Am. Pom. Soc. Cat. 214. 1856. 4. Downing Fr.
Trees Am. 924. 1869.
Ive’s Seedling 1, 4. Ive’s Washington 4. Ives’ Washington Seedling
3. Washington Seedling 2.
A seedling of Washington raised by J. M. Ives of Salem,
Massachusetts; named by C. M. Hovey; first fruited in 1845. Tree
very vigorous; fruit large, roundish-oblong; distinct suture; skin
yellow, mottled and dotted with red; bloom thin; stem short and
slender; flesh amber, melting, rich; excellent; stone medium, ovate,
free.
Ives. Insititia. 1. Am. Gard. 14:148. 1893.
Ives Damson 1.
Grown locally in southern Connecticut. Tree productive; fruit
purple, sour; clingstone; unusually late.
J. H. Rue. Species? 1. Wis. Sta. Bul. 63:43. 1897.
First noted by J. L. Budd of Iowa. Tree productive; fruit the size of
Stoddard; flesh firm.
J. Parks. Species? 1. Ill. Hort. Soc. Rpt. 420. 1905.
Fruit small, light red; flesh meaty, firm; good; freestone; not
troubled with rot.
Jacinthe. Domestica. 1. Duhamel Trait. Arb. Fr. 2:100, Pl. XVI. 1768.
2. Kraft Pom. Aust. 2:28, Tab. 173 fig. 2. 1796. 3. Coxe Cult.
Fr. Trees 238. 1817. 4. Prince Pom. Man. 2:94. 1832. 5. Mas
Le Verger 6:123. 1866-73.
Die Hyacinthenpflaume 2. Hyacinth 4. Hyacinthe Pflaume 5.
Jacinthe 2. Prune Jacinthe 5.
An old variety imported from England by William Coxe. Fruit large,
elongated; suture indistinct; clear purple; flesh yellow, firm, juicy;
good; stone oval, semi-clinging; mid-season.
Jacob. Domestica. 1. Downing Fr. Trees Am. 925. 1869.
Described only by Downing. Fruit of medium size, oval, necked,
sides unequal; suture large; violet; flesh greenish, juicy, sweet; good;
freestone; mid-season.
Jap No. 4. Americana × Triflora. 1. Ia. Sta. Bul. 46:276. 1900. 2. Ibid.
114:138. 1910.
Japan Hybrid No. 4 2.
A seedling from De Soto pollinated with some Japanese variety;
sent out by the Iowa Experiment Station about 1895. Fruit of medium
size, long-oval; suture distinct; mottled red over a yellow ground;
dots none; skin thin, tender; flesh yellow, sweet; good; freestone.
Japan No. 1. Americana × Triflora. 1. Kerr Cat. 1899.
A hybrid grown by H. A. Terry, Crescent, Iowa.
Japan No. 3. Americana × Triflora. 1. Kerr Cat. 1899.
Another of Mr. Terry’s hybrids.
Japan Hybrid No. 2. (a). Americana × Triflora. 1. Ia. Sta. Bul.
114:137. 1910.
One of a number of hybrids produced by the late J. L. Budd of the
Iowa Experiment Station. This one is of the Americana type; fruit
medium in size, oval, dark red over yellow; flesh yellow, tender,
sweet; good; freestone; mid-season.
Japan Hybrid No. 2 (b). Americana × Triflora. 1. Ia. Sta. Bul.
114:138. 1910.
From the same lot of hybrids as Japan Hybrid No. 2 (a). Fruit
resembles Prunus americana; large, oval, red over yellow; skin thick,
tough, bitter; flesh juicy, coarse, pulpy, sweet; fair in quality; mid-
season.
Japanese Plum Seedling. Triflora. 1. Am. Gard. 14:515. 1893.
A seedling from Luther Burbank produced by pollinating Kelsey
with Satsuma. Outwardly resembles Kelsey; flesh red, pleasant,
juicy, meaty; vinous; stone small, clinging.
Jaspisartige Pflaume. Species? Mentioned in Mathieu Nom. Pom.
436. 1889.
Lieflandische Grüne Zwetsche. Weisse Violen Pflaume.
Jaune d’Este. Domestica. 1. Flor. & Pom. 186. 1872.
Jean d’Este 1.
An old variety deserving of notice because of its earliness.
Jaune Tardive. Domestica. 1. Can. Exp. Farm Bul. 2d. Ser 3:53.
1900. 2. Baltet Cult. Fr. 491. 1908.
Tree vigorous; fruit of medium size, oval, amber-yellow; flesh
sweet; good.
Jaune Tres Hâtive Baboud. Domestica. 1. Can. Exp. Farm Bul. 2d
Ser. 3:52. 1900.
Tree vigorous, productive; fruit below medium, oval; suture
shallow; cavity small; clear yellow; flesh yellow, tender, juicy, sweet,
pleasant; good; freestone; very early.
Jean Morceau. Domestica. 1. Lond. Hort. Soc. Cat. 149. 1831.
A variety grown at one time in the London Horticultural Society
gardens.
Jennie Lucas. Angustifolia varians. 1. Am. Pom. Soc. Rpt. 160, 162.
1881. 2. Waugh Plum Cult. 196. 1901. 3. Ohio Sta. Bul.
162:256, 257. 1905.
Jennie Lucas is a seedling grown by G. Onderdonk, Mission Valley
Nurseries, Victoria County, Texas; introduced by the originator in
1875. Fruit of medium size, roundish; cavity shallow; suture a line;
dots numerous, large, white; light yellow; skin thin; flesh yellow, soft,
sweetish; quality fair; stone large, round, flattened, clinging; mid-
season.
Jerusalem. Domestica. 1. Prince Treat. Hort. 27. 1828. 2. Prince
Pom. Man. 2:95. 1832. 3. Poiteau Pom. Franc. 1. 1846. 4.
Noisette Man. Comp. Jard. 2:497. 1860. 5. Downing Fr. Trees
Am. 926. 1869. 6. Mathieu Nom. Pom. 433. 1889. 7. Lucas
Vollst. Hand. Obst. 471. 1894. 8. Guide Prat. 163, 367. 1895.
Blaue Eierpflaume 6, 8. De Bordeaux 1, 2, 5. De Jerusalem 4.
Jerusalem 6. Oeil de Boeuf 1, 2, 4, 5. Oeuil-de-Boeuf 6. Prune de
Bordeaux 6. Prune de Jerusalem 3. Prune Violet de Jerusalem 5.
Prunier de Jerusalem 2, 5, 6. Violette de Jerusalem 6. Violette
Jerusalem 5. Violette Jerusalems pflaume 6. Violette
Jerusalemspflaume 7. Wahre blaue Eierpflaume 6, 8.
The tree and fruit of this variety resemble the German Prune of
which it is probably an offspring. Fruit large, oval; suture a line; dark
purple; flesh yellowish, prune-like, firm, sweet; good; stone long, flat,
free; mid-season.
Jessie. Americana. 1. U. S. D. A. Rpt. 263. 1892. 2. Waugh Plum
Cult. 154. 1901.
A seedling introduced from the wild by the Martin Nursery
Company, Winfield, Kansas, about 1892. Tree productive, vigorous,
suckers badly; fruit of medium size, oval; cavity shallow; suture a
line; wine-red; flesh yellow, melting, fibrous, slightly subacid; good;
clingstone; early.
Jewell. Munsoniana. 1. Cornell Sta. Bul. 38:79. 1892. 2. Wis. Sta.
Bul. 87:14. 1901. 3. Waugh Plum Cult. 186. 1901.
A seedling of Wild Goose from H. A. Terry, Crescent, Iowa; first
fruited in 1885. Fruit of medium size, round; cavity shallow; suture
indistinct; red over a yellow ground; bloom light; dots numerous; skin
thin, not adherent to the pulp; flesh yellow, tender; quality fair;
clingstone; mid-season.
Jodoigne. Domestica. 1. Hogg Fruit Man. 367. 1866. 2. Ibid. 708.
1884. 3. Lucas Vollst. Hand. Obst. 472. 1894.
Boulouf ?1. Jodoigne Green Gage 1, 2. Reine-Claude de Jodoigne
1, 2. Reine-Claude von Jodoigne 3. Royal de Vilvorde 1, 2.
Probably a Reine Claude seedling; tree large, vigorous; shoots
smooth; fruit large, round, inclining to oblate, greenish-yellow, with
brownish-red cheek; suture shallow; flesh whitish-yellow, firm, juicy,
tender, sweet, rich; mid-season.
Joe Hooker. Americana. 1. Kerr Cat. 1894. 2. Colo. Sta. Bul. 50:38.
1898. 3. Waugh Plum Cult. 154. 1901.
Tree dwarfish; fruit of medium size, roundish-oval; cavity shallow;
suture faint; red on a yellow ground; skin thick; flesh yellow;
clingstone; late.
John A. Domestica. 1. Can. Exp. Farms Rpt. 137. 1894. 2. Ont. Fr.
Gr. Assoc. Rpt. 72. 1894. 3. Ia. Sta. Bul. 46:276. 1900.
A cross between Evelyn and Italian Prune; originated with Richard
Trotter, Owen Sound, Ontario. Tree vigorous; fruit large, oval or egg-
shape; cavity narrow; bronze-red; bloom heavy; flesh greenish-
yellow, firm, juicy, subacid; stone large; clinging; hangs well.
Johnny Roe. Domestica. 1. Garden 53:263. 1898.
An English variety propagated from suckers in Nottinghamshire.
Jones. Americana? 1. Cornell Sta. Bul. 38:79. 1892. 2. Ia. Hort. Soc.
Rpt. 334. 1894. 3. Ia. Sta. Bul. 46:277. 1900.
Originated in 1880 with Mrs. Owen Jones, Crescent, Iowa, who
planted the pits from a quart of “California plums” she had
purchased; introduced by H. A. Terry about 1895. Tree upright,
spreading, productive; fruit of medium size, oval; suture indistinct;
dark red; bloom light; skin thick, tender; flesh firm, meaty; quality fair;
stone smooth, not margined; clinging; mid-season.
Jones Late. Americana. 1. Kerr Cat. 1894. 2. Wis. Sta. Bul. 63:43.
1897.
Introduced by H. A. Terry. Tree productive; fruit large, oval, red;
flesh firm; clingstone.
Jordan Seedling. Domestica. 1. Can. Hort. 14:329. 1891.
Supposed to be a seedling of Yellow Egg; originated with F.
Jordan of Goderich, Ontario. The variety resembles Hulings so
closely as to be almost indistinguishable.
Judson. Domestica. 1. Thomas Am. Fr. Cult. 342. 1849. 2. Elliott Fr.
Book 427. 1854.
Originated in Lansingburgh, New York, some time in the early
“forties.” Fruit small, roundish; suture indistinct; cavity small;
attractive pink; flesh juicy, rich, vinous; quality high; freestone;
season just before Reine Claude.
Julia. Americana. 1. Ia. Sta. Bul. 46:277. 1900. 2. Terry Cat. 1900.
Edith of Terry 1.
A seedling from H. A. Terry in 1896. Tree productive; fruit large,
round, yellow striped with light red; flesh firm; clingstone; mid-
season.
Julian. Triflora. Noted in Sweet Cat. 1907.
Julien Gros á Feuilles Panachees. Domestica. Mentioned in Lond.
Hort. Soc. Cat. 149. 1831.
July Fourth. Domestica? × Triflora × Americana. 1. Rural N. Y.
59:655 fig. 1900.
A second generation seedling from Luther Burbank; said to rank
very high in quality.
July Green Gage. Domestica. 1. Jour. Hort. 9:128. 1865. 2. Hogg
Fruit Man. 360, 367. 1866. 3. Downing Fr. Trees Am. 926.
1869. 4. Mas Pom. Gen. 2:99. 1873. 5. Mathieu Nom. Pom.
437. 1889. 6. Guide Prat. 152, 363. 1895.
Bavay’s Early Gage? 1. Bavay’s Frühe Reine-Claude 4, 6. Early
Bavay 3, ?5. Early Green Gage? 2. Frühe Reine-Claude 6. Juli
Reine-Claude 5. Julius Reine-Claude 5. July Green Gage 4, 5.
Reine-Claude Davion 4, 6. Reine-Claude de Bavay Hâtive 2, 3, 4, 6.
Reine-Claude de Juillet 6. Reine-Claude Hâtive 5, of some 6. Reine-
Claude Hâtive d’Avion 6. Reine-Claude Hâtive de Bavay 6. Reine-
Claude Bavay Hâtive? 5.
July Green Gage was introduced into France from Normandy
about the middle of the last century by a M. Davion. Tree productive;
fruit of medium size, roundish; suture slight; stem short; cavity
narrow, deep; yellowish-green sometimes spotted with red; bloom
thin; flesh greenish-yellow, juicy, aromatic, sweet; very good;
freestone; very early.
Jumelles. Domestica. 1. Can. Exp. Farms Rpt. 432. 1905.
Fruit of medium size, roundish; suture distinct; greenish streaked
with yellow; flesh juicy, sweet, rich; stone small, semi-clinging; early.
Jumelles de Liegel. Domestica. 1. Mathieu Nom. Pom. 439. 1889.
2. Guide Prat. 160, 358. 1895.
Jumelles de Liegel 1. Liegel’s Zwillingspflaume 1. Liegel’s
Zwillingspflaume 2.
Tree productive; fruit large, roundish, red; flesh yellow, juicy,
sweet, vinous; good; late.
Kaga. Americana × Simonii. 1. Circ. S. Dak. Exp. Sta. 1910.
Introduced in 1910 by the originator, N. E. Hansen, of the South
Dakota Experiment Station. It is a cross between Prunus simonii and
some Americana.
Kaiser Wilhelm. Domestica. 1. Oberdieck Deut. Obst. Sort. 407.
1881. 2. Gard. Chron. 26:717. 1886. 3. Mathieu Nom. Pom.
428. 1889.
Bamberger Eier Pflaume 3 incor. Blaue Eier 3 incor. Dark Blue
Egg 2. Dunkelblaue Eierpflaume 1. Dunkleblaue Eierpflaume 3.
Liegel’s Marokko? 3. Rodt’s Grosse Früh Pflaumen-Zwetsche 3.
Ungarische Blaue Eier 3.
A plum very well known in Germany. Tree large, productive; fruit
large, oval; skin thick, not adherent, tough, somewhat sour, bluish-
black; flesh yellowish, juicy, slightly sweet; clingstone.
Kampeska. Americana. 1. Kerr Cat. 1894. 2. Colo. Sta. Bul. 50:38.
1898.
Tree productive, slow and stocky in growth; fruit small to medium,
round; stem of medium length, thick; skin thick, purplish-red; bloom
heavy; of medium quality; clingstone.
Kanawha. Hortulana. 1. Am. Pom. Soc. Rpt. 136. 1875. 2. Ga. Hort.
Soc. Rpt. 24. 1881. 3. Rev. Hort. 535. 1893. 4. Waugh Plum
Cult. 180, 181. 1901.
Canawa 1. Peach-leaved 2. Prune Kanawa 3. Rains 1.
Introduced by P. J. Berckmans who had received it from J. S.
Downer of Kentucky in 1871. Fruit of medium size, oval; suture a
line; dots many, white; bright red with a thin bloom; skin firm; flesh
firm, meaty, sprightly; good; clingstone; season late; mentioned in
the catalogs of the American Pomological Society from 1875 to
1899.
Kazan. Domestica. 1. Mich. Sta. Rpt. 111. 1887.
A foreign plum listed by the Michigan Experiment Station.
Keindt. Domestica. 1. Oberdieck Deut. Obst. Sort. 444. 1881.
Keindt’s Frühdamascene 1.
A German variety noted as unproductive on dry soil.
Keith. Americana. 1. Ia. Hort. Soc. Rpt. 436. 1888. 2. Ia. Sta. Bul.
46:277. 1900. 3. Waugh Plum Cult. 155. 1901.
Kieth 3.
Of the De Soto type, from Delaware County, Iowa, previous to
1888. Fruit large, roundish-oblong; cavity shallow; stem short, thick;
skin thin; orange overlaid with red; bloom thin; flesh yellow, firm,
sweet, not juicy; good to best; stone large, flattened, clinging; mid-
season; does not thrive in the South.
Kelbalan. Triflora × Cerasifera. 1. Kerr Cat. 1899.
Kelsey No. 3.
Grown by Theodore Williams of Benson, Nebraska, from a seed of
Kelsey pollinated with Early Cherry. Tree somewhat like Myrobalan;
fruit large, roundish-conic, yellow shaded with red; clingstone; good.
Kelley. Species? 1. Van Lindley Cat. 1899.
Originated in South Carolina; introduced by R. Bates of Jackson,
South Carolina. Tree prolific; fruit medium in size, yellow; good;
early.
Kelmyro. Triflora × Cerasifera. 1. Kerr Cat. 1899.
Kelsey No. 1.
From Theodore Williams of Benson, Nebraska; from seed of
Kelsey, pollinated with Early Cherry. Very productive; fruit medium,
round, pointed, dark red on a yellow ground; stone small, clinging;
mid-season.
Kelroba. Triflora × Cerasifera. 1. Kerr Cat. 1899.
Kelsey No. 2.
The same origin as Kelmyro. Tree vigorous, upright, productive;
fruit above medium, round, pointed, yellow overlaid with light red;
high flavor; stone small, clinging.
Kelsaw. Triflora × Munsoniana. 1. Vt. Sta. An. Rpt. 14:271. 1901.
An accidental cross between Kelsey and a “Chicasaw;” from A. M.
Augustine, West Point, Mississippi. Tree a rapid and thrifty grower.
Fruit the size of Abundance, round-oval; stem an inch long; suture
shallow; apex rounded; brilliant transparent red; dots minute; bloom
thin; skin thin and tough; flesh yellow with pink markings, firm, sweet
and rich; good to very good; clingstone; early.
Kelsey Prune. Domestica. Mentioned in Wild Bros. Cat. 1892.
Kelso. Domestica? 1. Vandevoort Cat.
Kelso is a yellow plum found about 1870 on the farm of Philip
Cline of Sabina, Ohio. Peter Kelso, who afterwards purchased the
Cline farm, brought the plum to J. M. Vandevoort, who introduced it
about twenty-five years ago.
Kenellan. Domestica. Listed in Lond. Hort. Soc. Cat. 149. 1831.
Kennedy Red. Species? 1. Can. Exp. Farm Bul. 2d Ser. 3:53. 1900.
A weak-growing and unproductive variety tested in British
Columbia. Fruit small, long-oval; suture distinct; cavity small; dull red
with a thin white bloom and golden dots; flesh yellow, sweet, coarse,
moderately juicy; pleasant; clingstone; of no value.
Kent. Domestica. 1. Hogg Fruit Man. 689. 1884. 2. Mathieu Nom.
Pom. 424. 1889. 3. Garden 56:355. 1899. 4. Can. Exp. Farm
Bul. 2d Ser. 3:50. 1900.
Bush 1. Bush 2. Bush Plum of Kent 4. Kentish Bush 3. Waterloo 1,
2. Waterloo of Kent 2.
Found in a hedge at Boben, England in 1836. Tree hardy, strong,
very productive, fruit large, round; skin dark maroon; flesh firm; flavor
fair; fruit keeps three weeks after being gathered; valuable for
market.
Kenyon. Species? 1. Mich. Sta. Rpt. 111. 1887.
Listed as a native plum being tested at the Michigan Experiment
Station.
Kester Green Gage. Domestica. 1. Downing Fr. Trees Am. 926.
1869.
Kester’s Green Gage 1.
Originated with a Mr. Weaver of Mt. Pleasant, Pennsylvania. Fruit
small, nearly round, one side enlarged; suture large; pale yellowish-

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