The Mastering Accounting series captures the important topics typically found in the introductory financial and managerial accounting courses. It shows the underlying importance of the accounting function as a provider of information to various stakeholders of CanGo.

An Emphasis on Going Public

The financial accounting episodes focus on the importance of financial statements in the process of going public, in on-going communications with external investors, and the need, therefore, to follow GAAP and have audited financial statements (something which smaller, non-public companies may not do). For example, one episode highlights the need for upper management to interpret financial statements at press conferences and analyst meetings. Three episodes underscore the fact that there are a number of choices that management must make, and these choices affect the perceptions investors obtain about the company through the financial statements. All of the episodes show accounting as part of a communication process involving the accounting department, management, and external users, not simply a bookkeeping activity performed by the accounting department.

The managerial section covers many concepts found in the introductory managerial accounting course. One episode, for example, focuses on the intended users of managerial accounting information and with the behavior of different types of costs. Another episode shows the difference between budgeted and actual results in a division-by-division performance to answer the question, "Why are the overall firm's results so poor?" Another episode examines the difference between price and efficiency variance. This episode asks the question, "Who is to blame- the person who hired the workers or the person who directs the worker's activities?"

Why Accounting Information Needs to Be Created

Mastering Accounting is unique in three ways. First, it emphasizes the use of accounting information to aid decisions made by other departments or outside users- investors, creditors, or inside departments like personnel, marketing, and production. Instead of just "creating information for information's sake," Mastering Accounting attempts to show why the information needs to be created—"What information do you need?", "Who needs this information and why?", and "Who or what are we evaluating?"

Second, Mastering Accounting highlights the unbiased nature of the accounting function. Usually Ethel and her staff do not make recommendations for action nor do they function as "keepers of the money." They merely provide information for others to make business decisions.

Third, Mastering Accounting shows the integration of computers and computer systems. Many students believe that accounting is an endless stream of numbers and journal entries. Mastering Accounting demonstrates that while computers do the bulk of the work—accountants need to be there to ask the computers the right questions and interpret the information the computer generates.

Managerial Accounting and Cost Behavior
	Ethel and Clark discuss CanGo's financial reporting methods as the company prepares for an IPO. Since the company must change its financial reporting system to meet standardized practices required by investors, some staff members have trouble understanding the new methods. The team learns that the value of financial reports lies in their labeling and content. CanGo's managers realize these benefits and make use of the new system.
Job-Order Product Costing
	Manufacturing businesses use more detailed product costing methods than retail or service-based businesses. CanGo is a combination of retail, service, and manufacturing sectors. The management team plans to offer a new product, customized MP3 players that will require detailed accounting reports for planning. Preliminary estimates are subject to unforeseen fluctuations in price and other variables. As facts and figures are updated, the reports are quickly revised to pinpoint problems.
Cost-Volume-Profit Analysis
	Accountants need to assume fixed and variable costs and compute the breakeven point in both sales units and total sales dollars before a company begins a new venture. Ethel's financial reports provide information to help make an important business decision. The reports predict outcomes based upon estimates of cost and revenue that can change quickly, but CanGo can also quickly change its strategy based upon continually updated reports.
Capital Budgeting
	While planning for the holiday season rush, each of CanGo's department heads sees the situation from a different perspective. More warehouse space would help the situation, but which options should the company pursue? Which financial facts are most relevant to the decision? This episode addresses the benefits and costs that are directly related to a project.
Performance Evaluation and Responsibility Accounting
	Segmented income statements show revenues for an organization as a whole and for individual divisions or sub-units. Liz uses these reports to assess the performance of individual product divisions at CanGo. However, the reports are only as good as the information they use. After some fine-tuning, the reports offer a more accurate assessment.
Flexible Budgeting and Variances
	CanGo uses flexible budgeting and different types of variances to determine actual costs for wages and raw materials. Liz wants to know specifically why the division producing CDs, DVDs, and MP3s is doing poorly. Ethel's reports help determine where the problem lies. The team learns that the conclusions reached from the reports depend on who reviews the report and how the data for the budget variances is analyzed.
Generally Accepted Accounting Principles and Audited Financial Statements
	CanGo needs additional funding to expand into new business projects. But to attract investors the company must use standardized accounting reports, something they have not done before. Now their financial reports will have to follow GAAP guidelines instead of being customized for individual users. Becoming a public company also changes their auditing requirements.
Deferrals (Unearned Revenues and Prepaid Expenses)
	For non-accountants, financial reports can be challenging to interpret, as the management team discovers when they try to collect some quick revenue to impress investors. Standard accounting practices present revenues and expenses in ways that don't appear logical, even to those with MBAs. The principles of income statements and the timing of recorded transactions are explained in this segment.
Statement of Cash Flows
	Different accounting report methods show the same results with different, though correct, interpretations. Some statements show only the health of a company at a specific time, others show the quality of earnings and what to expect in the future. The difference between cash on hand and what is owed to the company on paper can affect an investor's confidence. Ethel and Clark try to help Liz understand the difference between direct and indirect methods and the quality of earnings when comparing net income (what's on paper) to actual cash flow.
Alternative Income Statement Formats and Extraordinary Items
	As CanGo grows it requires increasingly complex financial arrangements. Liz and Andrew learn the difference between single-step and multi-step income statements and their effect on investors. Unfortunately, outside factors such as insurance regulations often have an impact on unrelated business operations.
Stock Dividends and Treasury Stock
	After the company posts poor quarterly performance reports, Clark, the Director of Finance, has to find a way to boost investors' confidence and Ethel will have to reformulate the financial statements following his plan. Then he has to explain his decision to CanGo's Board of Directors. This episode explains the difference between cash and stock dividends.
Depreciation Methods and Inventory Cost Flow Assumptions
	CanGo's staff has to choose when and how to depreciate fixed assets such as a new warehouse the company needs. Ethel must present the reports with the best possible financial outlook for potential investors. New developments always change the preceding terms and practices. This episode explains the different methods available for depreciation and inventory.