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su rvey of
Accounting

Edmonds | Edmonds | olds | mcnair | Tsay

Philip R. Olds
Professor Olds, PhD, is associate professor of accounting at Virginia Commonwealth University
(VCU). He serves as the coordinator of the introduction to accounting courses at VCU. Professor
Olds received his AS degree from Brunswick Junior College in Brunswick, Georgia (now College of
Coastal Georgia). He received a BBA in accounting from Georgia Southern College (now Georgia
Southern University); his MPA and PhD degrees are from Georgia State University. After graduating
from Georgia Southern, he worked as an auditor with the U.S. Department of Labor in Atlanta,
Georgia. A former CPA in Virginia, Professor Olds has published articles in various professional
journals and presented papers at national and regional conferences. He also served as the faculty
adviser to the VCU chapter of Beta Alpha Psi for five years. In 1989, he was recognized with an
Outstanding Faculty Vice-President Award by the national Beta Alpha Psi organization. Professor
Olds has received both the Distinguished Teaching Award and the Distinguished Service Award
from the VCU School of Business. Most recently he received the university’s award for maintaining
High Ethical and Academic Standards While Advocating for Student-Athletes and Their Quest
Towards a Degree.

Frances M. McNair
Frances M. McNair, PhD, CPA, holds the KPMG Peat Marwick Professorship in Accounting at
Mississippi State University (MSU). She has been involved in teaching principles of accounting for
the past 12 years and currently serves as the coordinator for the principles of accounting courses
at MSU. Dr. McNair was selected as Accounting Educator of the year by the Mississippi Society of
CPAs in 2014. She joined the MSU faculty in 1987 after receiving her PhD from the University of
Mississippi. The author of various articles that have appeared in the Journal of Accountancy,
Management Accounting, Business and Professional Ethics Journal, The Practical Accountant,
Taxes, and other publications, she also coauthored the book The Tax Practitioner with Dr. Denzil
Causey. Dr. McNair is currently serving on committees of the American Taxation Association, the
American Accounting Association, and the Institute of Management Accountants as well as
numerous School of Accountancy and MSU committees.

Bor-Yi Tsay
Bor-Yi Tsay, PhD, CPA, is professor of accounting at Kennesaw State University (Kennesaw). He has
taught principles of accounting courses at the University of Houston and University of Alabama at
Birmingham. He currently teaches principles of accounting courses in Kennesaw. Dr. Tsay received
the 1996 Loudell Ellis Robinson Excellence in Teaching Award. He has also received numerous
awards for his writing and publications, including the John L. Rhoads Manuscripts Award, John
Pugsley Manuscripts Award, Van Pelt Manuscripts Award, and three certificates of merit from the
Institute of Management Accountants. His articles have appeared in Journal of Accounting
Education, Management Accounting, Journal of Managerial Issues, CPA Journal, CMA Magazine,
Journal of Systems Management, and Journal of Medical Systems. Dr. Tsay received a BS degree
in agricultural economics from National Taiwan University, an MBA degree from Eastern Washington
University, and a PhD degree in accounting from the University of Houston.

Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay vii

 HOW DOES EDMONDS large, the seller usually requires the buyer to issue a note reflecting a credit agreement be-

tween the parties. The note specifies the maturity date, interest rate, and other credit terms.

Receivables evidenced by such notes are called notes receivable. Accounts and notes receiv-

able are reported as assets on the balance sheet.

Real-World Examples
The text provides a variety of thought-
The Curious Accountant provoking, real-world examples of
General Dynamics Corporation is an aerospace ­financial and managerial accounting as
and defense company that provides both products an essential part of the management
and services in business aviation; combat vehicles,
weapons systems, and munitions; shipbuilding;
process. The names of the real-world
and communications and information technology. companies used in these examples are
Its products include Gulfstream business jet
airplanes. In 2015, 57 percent of its revenues were
highlighted in blue font to facilitate their
earned from the U.S. government, 17 percent from © idp geneva collection/Alamy Stock Photo
identification.
commercial customers in the United States, 13 percent from international commercial customers, and
the remaining 13 percent from international government defense customers.
Suppose the U.S. government contracted with General Dynamics to purchase four Gulfstream airplanes
at a total cost of $200 million. Assume the government offers to pay for the airplanes the day they are deliv-
ered (a cash purchase) or 30 days later (a purchase on account). Assume that General Dynamics is absolutely
sure the government will pay its account when due.
Do you think the company should care whether the government pays for the services upon delivery or
30 days later? Why? (Answer on page 165.)

184 Chapter 5 Accounting for Receivables and Inventory Cost Flow 165

Answers toREALITY
The Curious BYTES Accountant General Dynamics would definitely pre- The Curious Accountant
To avoid spoilage or obsolescence, most companies use the first-in, first-out (FIFO) approach for
fer to make the sale to the govern-
the flow of physical goods. The older goods (first units purchased) are sold before the newer goods Each chapter opens with a short
ment in cash rather are than onFor
sold. account.
example, Even though
Kroger’s anditother
mayfoodbe certain to collect
stores stack its accountsat receivable,
older merchandise the front of thethe sooner
the company gets itsshelf cash,where customers
the sooner the are
cashmorecanlikely to pick it up first. As a result, merchandise is sold before it
be reinvested. ­vignette that sets the stage and helps
becomes dated. However, when timing is not an issue, convenience may dictate the use of the last-
The interest costin, related to(LIFO)
first-out
edm31125_ch05_162-205.indd 163
a small account
method. receivable
Examples of $50that
of products thatfrequently
takes 30move
days onto acollect may include
LIFO basis seems rock,
immaterial; at
12/10/16 1:46 PM
pique student interest. These pose a
3 percent the lost interestgravel, dirt, or othertononwasting
amounts assets. Indeed,
$0.13. However, when rock,
one gravel, and dirt
considers thatare normallyDynamics
General stored in piles
had approxi-
that are unprotected from weather. New inventory is simply piled on top of the old. Inventory that question about a real-world accounting
mately $3.4 billion ofisaccounts receivable
sold is taken from theon topDecember
of the pile 31, 2015,
because and
it is took an to
convenient average of 40 days to
do so. Accordingly, thecollect
last in-them, the
ventory purchased
cost of financing receivables is the first
for a real-world inventory
company sold. Forapparent.
becomes example, Vulcan
In 2015,Materials Co., which claimsinterest
the weighted-average to rate issue related to the topic of the chapter.
be the nation’s largest producer of construction aggregates (stone and gravel), uses LIFO. Regard-
on General Dynamics’s lessdebt was only
of whether around
the flow 2.6 percent.
of physical But, even
goods occurs at 2.6
on a LIFO or percent
FIFO basis,thecosts
costcan
of flow
waiting
The flow of inventory through the physical facility is a separate issue from the flow of costs through
40 days to col-
differently. The answer to the question appears in a
lect $3.4 billion of cash is $9.7 million ($3.4 billion × 0.026 × 40/365). For a full year, the cost to General Dynamics
the accounting system.
would be $88.4 million ($3.4 billion × 0.026).
separate sidebar a few pages further
into the chapter.
© Martial Colomb/Getty Images

EVENT 2 Collection of Receivables

ATS collected $2,750 cash from accounts receivable in 2018.
This event is an asset exchange transaction. The asset cash increases; the asset accounts re-
ceivable decreases. Total assets remains unchanged. Net income is not affected because the
FOCUS ON INTERNATIONAL ISSUES
revenue was recognized in the previous transaction. The cash inflow is reported in the oper-
Focus on International Issues
ating activities section of the statement of cash flows. The effects on the financial statements
are shown here:
LIFO IN OTHER COUNTRIES These boxed inserts expose stu-
This chapter introduced a rather strange inventory cost flow assumption called
LIFO. As explained, the primary advantage of LIFO is to reduce a company’s dents to international issues in
income taxes. Given the choice, companies that use LIFO to reduce their taxes
Assets would
= probably
Liab. +prefer to useRev.
Equity another
− method
Exp. when
= Net preparing
Inc. their
Cash GAAP-
Flow accounting.
based financial statements, but the IRS does not permit this. Thus, they are left
Cash + Accts. Rec. with no choice but to use the seemingly counterintuitive LIFO assumption for
GAAP as well as tax reporting.
2,750 + (2,750) = NA + NA NA − NA = NA 2,750 OA
What happens in countries other than the United States? International Fi-
nancial Reporting Standards (IFRS) do not allow the use of LIFO. Most industri-
alized nations are now using IFRS. You can see the impact of this disparity if
you review the annual report of a U.S. company that uses LIFO and has signifi-
EVENT 3 Recognizing Uncollectible
cant Accounts
operations in other Expense
countries. Very often it will explain that LIFO is used to
ATS recognized uncollectible
calculateaccounts
inventory expense
(and cost for accounts
of goods sold)expected
for domesticto be uncollectible
operations, but
in the future. another method is used for activities outside the United States.
© Stan Honda/Getty Images

While ATS has collected cash For for

example,
some here
of theis revenue
an excerpt from General
earned in 2018,Electric’s
some of 2014 Form
the remain-
10-K,beNote
ing receivables may never 1.
collected. ATS will not know the actual amount of uncollect-
ible accounts until 2019 when the customers
All inventories failatto
are stated thepay.
lowerHowever, the company
of cost or realizable can for
values. Cost estimate
a significant portion of GE U.S. inventories is determined on a last-in, first-
the amount of revenue that outit expects willCost
(LIFO) basis. beofuncollectible. Theisestimated
other GE inventories determined amount offirst-out
on a first-in, uncol-(FIFO) basis. LIFO was used for 40% and 39% of GE inventories at
lectible accounts can then be recognized
December 31, 2014as and
an 2013,
expense on the 2018 income statement. Rec-
respectively.
ognizing the estimated expense improves the matching of revenues and expenses and
If the company
therefore increases the accuracy has its headquarters
of the financial statements.in the United States, why not simply use LIFO in its foreign operations? In addition to having to pre-
Many accountants pare financialthe
determine statements
estimated for the United States,
uncollectible the company
accounts probably
expense has to prepare
by taking a statements for its local operations using the reporting
standards of the local country.
percentage of revenue. This approach is commonly called the percent of revenue method.
The percentage used to make Priorthetoestimate
the establishment
is usually of IFRS each
based oncountry was responsible
the company’s for issuing its own, local GAAP. Even then, most countries did not allow
past collection
experiences. However, for
thethe use of LIFO.
percentage may be adjusted for anticipated future circumstances.
For example, the percentage may be reduced if the company plans to adopt more rigorous
credit approval standards. Alternatively, the percentage may be increased if economic
forecasts signal an economic downturn that would make customer defaults more likely.

“The Curious Accountant and Real-World Examples, all make the text better and would make it a pleasure to teach from.”
edm31125_ch05_162-205.indd 184 12/10/16 1:47 PM

edm31125_ch05_162-205.indd 165 12/10/16 1:46 PM

VIVIAN WINSTON, INDIANA UNIVERSITY

viii Survey of Accounting

 sents the amount of inventory that should be on hand at any given time. For example,
based on the previous transactions the book balance of the JPS’s Inventory account can
be computed as follows:

Beginning balance $ 6,000 Accounting for Accruals and De

Purchases 11,000

MOTIVATE STUDENTS?
This event is a claims exchange transaction. The claims of creditors (liabilities) increase
Purchase returns (1,000)
Purchase discounts (200)
and the claims of stockholders (retained earnings) decrease. Total claims
Transportation-in 300 remain unchanged. The
salary expense is reported on the incomeGoods
statement. The
available for salestatement of cash flows is not affected.
16,100
Be careful not to confuse liabilitiesCostwith expenses.
of goods sold Although
(11,500) liabilities may increase
when a company recognizes expenses,Ending liabilities
balance are not expenses.$ 4,600 Liabilities are obliga-
tions. They can arise from acquiring assets as well as recognizing expenses. For example,
when a business borrows money from a bank, it recognizes an increase in assets (cash) and
Assume that JPS takes a physical count of its inventory on hand and finds that it has only
liabilities (notes$4,100
payable). The borrowing transaction does not affect expenses.
of inventory. By comparing the $4,600 book balance in the Merchandise Inventory
account with the $4,100 of actual inventory counted, we determine that the Company has
Check Yourself CHECK
experienced $500 of shrinkage. Under these circumstances JPS must make an adjusting en-
try toYOURSELF
write down the Inventory
2.1 account so the amount reported on the financial statements
agrees with the amount actually on hand at the end of the period. The write-down decreases
These short question/answer features both assets (inventory) and stockholders’ equity (retainedand
earnings).
During 2018, Anwar Company earned $345,000 of revenue on account collectedThe write-down
$320,000 cash in-
occur at the end of each main topic and creases expenses and decreases net income. Cash flow is not affected. The effects on the
from accounts receivable. Anwar
statements are paid cash expenses of $300,000 and cash dividends of $12,000. De-
as follows.
ask students to stop and think about termine the amount of net income Anwar should report on the 2018 income statement and the amount
of cash flow from operating activities Anwar should report on the 2018 statement of cash flows.
the material just covered. The answer 346 Chapter 9
Stockholders’
346 Chapter 9 Answer
Assets Net income is=$45,000Liab. ($345,000 + revenueEquity− $300,000 expenses). The cash flow from
follows to provide immediate feedback operatingtremendous
activities impact
is $20,000,on financial
the amount reporting.
of Com. Conservatism
revenue collected in dictates
cash from recognizing
customers estimated
(accounts
tremendous
Accts. impact on financial reporting.
Accts. Conservatism
Notes dictates
Ret. recognizing estimated
before students go on to a new topic. Cash + losses as+soonlosses
Rec.receivable)
Inventory as+soon
asminus
they the
occur,
Land asbut
cash=they
paid
gainoccur,
Pay. + butPay.gain
forrecognition
expenses isrecognition
Stk. + −
($320,000
+ almost is almost
$300,000).
always
Earn. always
Exp. deferred
Rev. Dividend
deferred − until payments
the
= gains until
Net Inc.are the
Cashgains
classified
Flow
are actually are
as financing actually
realized. realized.
activities Conservatism
and do produces
Conservatism not affecta the produces a
determination
negative negative bias in financial
of eitherstatements.
bias in financial net income or cash flowThere
statements.
There from
NA + NA + are + NA arguments
(500)persuasive = NA for + the + NA + principle,
NAconservatism (500) NA
but − 500should
users = (500)be alert to NA
distor-
are persuasive
operatingarguments
activities. for the conservatism principle, but users should be alert to distor-
tions itinmay
tions it may cause cause ininformation.
accounting accounting information.
The pervasive The
use pervasive use of the
of the historical costhistorical
concept cost
is concept isgreatest
probably probablysingle
the greatest ofsingle cause of
Theoretically, inventory losses are operatingthe expenses. However, cause
because
distorted
distorted financial financial statement
statement analysis results. The historical cost of an asset doessuch
not losses
repre-are
normallyanalysis
immaterial results. The historical
in amount, they arecost of anadded
usually asset does
to costnotof repre-
goods sold for external
sent its current
sent its current value.reporting value.
The asset The asset purchased in 2003 for $10,000
purchased in 2003 for $10,000 is not comparable in value tois not comparable in value to
purposes.
theSummary
same asset of Events
thepurchased
same asset 2018and
in purchased General
in
for $10,0002018because Ledger
for $10,000 because
of changes in of
thechanges
value ofinthe thedollar.
value of the dollar.
Using
ThehistoricalUsing
previous historical
cost produces
section ofcost produces
financial
this chapter financial
statements
described statements
that report
sevendollarsthat report
events with
Cato dollars
differing with
Consultantspur- differing pur-
experienced
chasing powerchasing
in thepower in the sameCombining
same statement. statement.theseCombining
differing these differing
dollar values dollar
is akinvalues is akin to
to2.1. The
Reality Bytes REALITY during
ated
BYTES
the
adding milesadding
general
2018 accounting
miles to To
to kilometers.
ledger accounts
period.
kilometers.
get the most
These
To get
from
events are
theanalyzing
most from summarized
analyzing
financial
in Exhibit
financialusers
statements, statements, usersassoci-
should
Good inventory be should
cognizant
management be
of cognizant
these
is essential ofare
these
limitations.
for merchandising
also
and
shown in the exhibit. The information in these accounts
limitations.
manufacturing companies. Even if a
This feature provides examples or ex- company uses a perpetual inventory system, the amount of inventory believed to be on hand may be
pansions of the topics presented by incorrect because of lost, damaged, or stolen goods, so a physical count is still required. Unfortu-
EXHIBIT
nately, counting inventory is not2.1
a revenue-generating activity. If a company’s employees are used to
highlighting companies and showing conduct the physical count, it takes time that may be better used for other activities. In fact, it may be
CHECK CHECK
YOURSELF YOURSELF
9.3Recorded 9.3
so time-consuming Transaction
that the business Data
must closefor temporarily
2018 so employees in General
will have theLedger Accounts
time to com-
how they use the accounting concepts plete the inventory count. on equity
The return The return
for Gup onCompany
equity forandGupHunn
Company
Company and isHunn
23.4Company
percent and is 23.4 percentrespectively.
17 percent, and 17 percent, respectively.
To avoid this problem many businesses
meanhire outside companies to count bytheir inventory. These
discussed in the chapter to make busi- 1 mean
Does this
outside vendors can bring
2 in a large
GupCato
Does this Consultants
Company
Catocrewprovided
isGup
better
of specially
acquired
Company
managed
$84,000 trained
$5,000
is better
than Hunn
workers and
of consulting
cash
managed issuing
than
Company?
complete
services
Hunncommon
Company?
a count very
on account.
stock.

ness decisions. quickly. There are

be the world’s largest.
No single
many companies
Answer
3
range ofRIGIS
ratios
Answer
reports
range
ratio
that
provides
can
that provide adequately
No single
its 34,000
only
of ratios
inventory
limited
measure
ratio cancounting
employees
providesinsight.
only Any have
management
adequately services,
useful
limited counted
butperformance.
measure management
RIGIS,
overuseful
interpretation
insight. Any 400 requires
billion
Even
LLC claims
items
analyzing aEven
performance.
to
Cato collected $60,000 cash from customers in partial settlement of its accounts receivable.
in requires
the analyst
interpretation
wideanalyzing a wide
to recog-the analyst to recog-
the more than nize 4
4 million inventory
the limitations
Cato
countspaid $10,000
itanalysis.
has conductedcash for salary
sinceratio expense.
beginning operations in 1958. On industries
nize of
theratio
limitations ofFor example,
ratio analysis. Fornorms
example,typically
ratio differ
norms between
typically differ between and industries and
second thought,may be5affected
counting inventory
byCatois apaid
temporary $2,000
revenue-producing
economic cash for
factors.2018
activity
In if advertising
you
addition, are a costs.
company
companies’
may be affected by temporary economic factors. In addition, companies’©use that
use ofcounts
different accounting
DigitalofVision/Getty
differentImages
accounting
inventory for others. 6 and procedures
practices Cato signed
practices andproducescontracts
procedures forratio
different $42,000
produces results of even
different consulting
when
ratio services
even to
underlying
results be performed
circumstances
when underlyingare in 2019.
circumstances are
7
comparable. Cato recognized $6,000 of accrued salary expense.
comparable.

Assets = Liabilities + Stockholders’ Equity

Event Accounts Salaries Common Retained

No. Cash + Receivable = Payable + Stock + Earnings Ac
A Look Back/A Look Forward << A<<
LookABack
LookBeg.
Back
edm31125_ch03_092-129.indd 104 12/10/16 2:44 PM
bal. 0 0 0 0 0
Students need a roadmap to make
Financial1statement
Financial
5,000 involves many factors, among them user characteristics, infor-
analysis 5,000
statement analysis involves many factors, among them user characteristics, infor-
sense of where the chapter topics mation needs for particular
2 mation needs fortypes of decisions,
particular anddecisions,
84,000of
types how financial information
and how financialisinformation
analyzed. is analyzed. 84,000 Cons
fit into the whole picture. A Look Analytical3 techniques
Analytical include horizontal,
techniques
60,000 include vertical,
(60,000) and vertical,
horizontal, ratio analysis. Users
and ratio commonly
analysis. Users commonly
calculate ratios to measure
ratiosa to
company’s
measure aliquidity, solvency, andsolvency,
profitability.
andThe specific The specific
4 calculate (10,000) company’s liquidity, profitability. (10,000) Sala
Back reviews the chapter material, ratios presented in this chapter are summarized in Exhibit 9.6. Although ratios are
ratios presented in this chapter are summarized in Exhibit 9.6. Although ratios easy to are easy to
calculate5andcalculate
provide(2,000)
useful insights
and provide into business
useful operations,
insights into businesswhen interpreting
operations, whenanalytical
interpreting analytical
(2,000) Adve
and a Look Forward introduces new results, users should consider limitations resulting from differing industry characteristics,
6 results, users should consider limitations resulting from differing industry characteristics,
differing 7economic conditions, and the fundamental accounting principles 6,000 used to produce
material to come in the next chapter. differing economic conditions, and the fundamental accounting
reported financial information.
principles used to produce (6,000) Sala
End bal.reported financial information.
53,000 + 24,000 = 6,000 + 5,000 + 66,000

>> A>>
LookAForward
Look Forward
This chapter concludes the financial accounting portion of the text. Beginning with Chap-
This chapter
ter 10, we introduce concludes
various theafinancial
tools from branch ofaccounting portion
the field called of the text.
managerial Beginning with Chap-
accounting.
ter 10, we introduce
Managerial accounting focuses onvarious
meetingtools
thefrom a branch
accounting of the fieldneeds
information calledofmanagerial
decision accounting.
makers inside,
edm31125_ch02_048-091.indd Managerial accounting focuses on meeting the accounting information
53 rather than outside, a company. In addition to financial statement data, inside needs of decision
users requiremakers inside,
detailed, rather than outside,
forward-looking a company.
information In addition
that includes to financial
nonfinancial statement
as well as fi- data, inside
users require
nancial components. detailed,
We begin with forward-looking information
a chapter that discusses thatmanagement
the value includes nonfinancial
account- as well as fi-
ing adds to thenancial components.process.
decision-making We begin with a chapter that discusses the value management account-
ing adds to the decision-making process.

“The Reality Bytes and Check Yourself sections in the chapters enhance the presentation.”
edm31125_ch09_326-363.indd 346 21/10/16 2:57 AM
edm31125_ch09_326-363.indd 346 21/10/16 2:57 AM
ROBERT PATTERSON, PENN STATE-ERIE

“I like the Check Yourself examples.”

BRUCE DARLING, UNIVERSITY OF OREGON

Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay ix

HOW ARE CHAPTER CONCEPTS
REINFORCED?
Regardless of the instructional approach, there is no shortcut
to learning accounting. Students must practice to master basic
­accounting concepts. The text includes a prodigious supply of
practice materials and exercises and problems.
30 Chapter 1

Video lectures and accompanying self-assessment quizzes are available in

Connect for all learning objectives.
Self-Study Review Problem
SELF-STUDY REVIEW PROBLEM These sections offer problems and solutions
During 2019 Rustic Camp Sites experienced the following transactions: of major chapter concepts.
1. RCS acquired $32,000 cash by issuing common stock.
2. RCS received $116,000 cash for providing services to customers (leasing campsites).
3. RCS paid $13,000 cash for salaries expense.
4. RCS paid a $9,000 cash dividend to the owners.
5. RCS sold land that had cost $100,000 for $100,000 cash.
6. RCS paid $47,000 cash for other operating expenses.
Required
a. Record the transaction data in a horizontal financial statements model like the following one. In
the Cash Flow column, classify the cash flows as operating activities (OA), investing activities
(IA), or financing activities (FA). The beginning balances have been recorded as an example.
They are the ending balances shown on RCS’s December 31, 2018, financial statements illustrated
in the chapter. Note that the revenue and expense accounts have a zero beginning balance.
Amounts in these accounts apply only to a single accounting period. Revenue and expense account
balances are not carried forward from one accounting period to the next.

Balance Sheet Income Statement

Assets = Liab. + Stockholders’ Equity

86 EventChapter 2 Statement of
+ = + + − =
Exercise and Problem Sets
No. Cash Land N. Pay. Com. Stk. Ret. Earn. Rev. Exp. Net Inc. Cash Flows
CHECK FIGURES
Consulting revenue $18,200
Net Income: $3,10051,000 + 500,000 = 400,000
Beg. bal.
Cash
+ 120,000 + 31,000 NA − NA = NA
35,600
NA
Ending Retained Earnings: $15,300 Cash received from common stock issued during 2017 6,000
b. Explain why there
Travel are no beginning balances in the Income Statement columns.
expense 2,100
Dividends 4,000
c. What amount
d. What amount
of net income will RCS report on the 2019 income statement?
Cash flow from investing activities
of total assets will RCS report on the December 31, 2019,3,500
Rent expense
5,200
balance sheet? • Check figures
e. What amount of retained
Payment to reduceearnings will RCS report on the December 31,
debt principal 2019, balance sheet?
10,000
f. What amount of net
Retained cash flow
earnings, from
January operating activities will RCS report
1, 2018 on the 2019 statement of
16,200 The figures provide a quick reference for
Salary expense
cash flows? 7,200
Cash flow from operating activities
Solution Common stock, December 31, 2018
2,600
16,000
students to check on their progress in
Other operating expenses
a.
2,300
solving the problem.
RequiredBalance Sheet Income Statement
a. Prepare the income statement Nowell would include in its 2018 annual report.
Assets = Liab. + Stockholders’ Equity
Event b. Identify the accounts that should be closed to the Retained Earnings account. Statement of
No. Cash c. Determine
+ Land = N. Pay.the Retained
+ Com.Earnings
Stk. + account balance Rev.
Ret. Earn. at December 31, 2018.
− Exp. = NetIdentify
Inc. the reasons for
Cash Flows
the difference between net income and the ending balance in Retained Earnings.
Beg. bal. 51,000 + 500,000
d. What= are
400,000 + 120,000
the balances +
in the Revenue,31,000 NA − accounts
Expense, and Dividend = January
NA on NA1, 2019? Explain.
NA
1. 32,000 + NA = NA + 32,000 + NA NA − NA = NA 32,000 FA
LO 2-8 Problem 2-35 Effect of events on financial statements
2. 116,000 + NA = NA + NA + 116,000 116,000 − NA = 116,000 116,000 OA
CHECK 3.
FIGURES(13,000) + Waddell
NA =Company
NA had
+ the following
NA + balances
(13,000)in its accounting
NA −records
13,000 as=of December
(13,000) 31,(13,000)
2018: OA
b. $36,000
4. (9,000) + NA = NA + NA + (9,000) NA − NA = NA (9,000) FA
h. $15,000 Assets Liabilities and Equity
5. 100,000 + (100,000) = NA +
Cash NA + NA
$35,000 NA − Payable
Accounts NA = $NA7,500 100,000 IA
6. (47,000) + NA = NA + Receivable
Accounts NA + 9,000
(47,000) Common
NA − 47,000
Stock = (47,000)
40,000 (47,000) FA
Land 51,000 Retained Earnings 47,500
Totals 230,000 + 400,000 = 400,000 + 152,000 + 78,000 116,000 − 60,000 = 56,000 179,000 NC*
Totals $95,000 $95,000
*The letters NC on the last line of the column designate the net change in cash.

The following accounting events apply to Waddell Company’s 2018 fiscal year:
Jan. 1 Acquired $20,000 cash from the issue of common stock.
Feb. 1 Paid $6,000 cash in advance for a one-year lease for office space.
Mar. 1 Paid a $2,000 cash dividend to the stockholders.
April 1 Purchased additional land that cost $15,000 cash.
edm31125_ch01_002-047.indd 30
May 1 Made a cash payment on accounts payable of $5,500. 12/10/16 2:04 PM
July 1 Received $9,600 cash in advance as a retainer for services to be performed monthly over
the coming year.
Sept. 1 Sold land for $30,000 cash that had originally cost $30,000.
Oct. 1 Purchased $2,500 of supplies on account.
Dec. 31 Earned $58,000 of service revenue on account during the year.
31 Received cash collections from accounts receivable amounting to $46,000.
31 Incurred other operating expenses on account during the year that amounted to $28,000.
31 Recognized accrued salaries expense of $6,500.
31 Had $50 of supplies on hand at the end of the period.
31 The land purchased on April 1 had a market value of $20,000.
31 Recognized $500 of accrued interest revenue.
Required
Based on the preceding information, answer the following questions for Waddell Company. All ques-
tions pertain to the 2018 financial statements. (Hint: Enter items in general ledger accounts under the
accounting equation before answering the questions.)
a. Based on the preceding transactions, identify two additional adjustments and describe them.
b. What amount would Waddell report for land on the balance sheet?
c. What amount of net cash flow from operating activities would be reported on the statement of
cash flows?

edm31125_ch02_048-091.indd 86 12/10/16 2:40 PM

x Survey of Accounting

REINFORCED?
Analyze, Think, Communicate (ATC)
Each chapter includes an innovative
­section titled Analyze, Think, Commu­
nicate (ATC). This section contains:
• Business application cases related to the
annual report for Target Company
• Writing Assignments
• Group Exercises
• Ethics Cases
• Internet Assignments
• Real Company Examples
• Target Corp.
“I like the real life examples; I like the Analyze, Think, and Communicate.”
DEBBIE GAHR, WAUKESHA COUNTY TECHNICAL COLLEGE
Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay
9. Paid a cash dividend of $2,000 to the stockholders.
10. Paid other operating expenses of $2,850.
Information for 2019 Adjusting Entries
11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a
one-year term.
12. The cash advance for services to be provided in the future was collected on October 1 (see
Event 5). The one-year contract started on October 1.
13. Had $300 of supplies remaining on hand at the end of the period.
14. Recognized accrued salaries of $4,800 at the end of the accounting period.
15. Recognized $500 of accrued interest revenue.
Required
a. Identify each event affecting the 2018 and 2019 accounting periods as asset source (AS), asset use
(AU), asset exchange (AE), or claims exchange (CE). Record the effects of each event under the
appropriate general ledger account headings of the accounting equation.
b. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and
statement of cash flows for 2018 and 2019, using the vertical statements model.
ANALYZE, THINK, COMMUNICATE
ATC 2-1 Business Applications Case Understanding real-world annual reports
Required
Use the Target Corporation’s Form 10-K to answer the following questions related to Target’s 2015
Target Corporation
fiscal year (year ended January 30, 2016). Target’s Form 10-K is available on the company’s website
or through the SEC’s EDGAR database. Appendix A provides instructions for using the EDGAR
database.
a. Which accounts on Target’s balance sheet are accrual-type accounts?
b. Which accounts on Target’s balance sheet are deferral-type accounts?
c. Compare Target’s 2015 net earnings (the year ended January 30, 2016) to its 2015 cash provided
by operating activities. Which is larger?
d. First, compare Target’s 2014 net income to its 2015 net income. Next, compare Target’s 2014 cash
provided by operating activities to its 2015 cash provided by operating activities. Which changed
the most from 2014 to 2015, net earnings or cash provided by operating activities?
e. Why did Target’s net earnings change so much from 2014 to 2015?
ATC 2-2 Group Assignment Financial reporting and market evaluation
The following financial highlights were drawn from the 2014 annual reports of ExxonMobil
Corporation and Apple Inc.
160 Chapter 4
Exxon Mobil Apple
Class Discussion
Revenue $411.9 Billion $182.8 Billion
Net income b. Discuss the $cause of the difference
32.5 Billion between the unadjusted cash balance and the ending
$ 39.5 Billion
balance for the
Cash and short-term investments $ bank statement.
4.6 Billion Also,
$ 41.6 discuss types of adjustment that are commonly made to
Billion
the bank balance and types of adjustment that are commonly made to the unadjusted book
balance.
ATC 4-3 Research Assignment Investigating cash and management issues at
Smucker’s
Using the most current Form 10-K available on EDGAR, or the company’s website, answer the
edm31125_ch02_048-091.indd 89 following questions about the J. M. Smucker Company. Instructions for using EDGAR are in
12/10/16 2:40 PM
Appendix A. Note: In some years the financial statements, footnotes, etc., portion of Smucker’s annual
report have been located at the end of the Form 10-K, in or just after “Item 15.”
Required
a. Instead of “Cash,” the company’s balance sheet uses the account name “Cash and cash equiva-
lents.” How does the company define cash equivalents?
b. The annual report has two reports in which management clearly acknowledges its responsibility
for the company’s financial reporting and internal controls. What are the names of these reports
and on what pages are they located?
ATC 4-4 Writing Assignment Internal control procedures
Sarah Johnson was a trusted employee of Evergreen Trust Bank. She was involved in everything.
She worked as a teller, she accounted for the cash at the other teller windows, and she recorded
many of the transactions in the accounting records. She was so loyal that she never would take a day
off, even when she was really too sick to work. She routinely worked late to see that all the day’s
work was posted into the accounting records. She would never take even a day’s vacation because
they might need her at the bank. Adam and Jammie, CPAs, were hired to perform an audit, the first
Target Corporation complete audit that had been done in several years. Johnson seemed somewhat upset by the upcom-
ing audit. She said that everything had been properly accounted for and that the audit was a needless
expense. When Adam and Jammie examined some of the bank’s internal control procedures, it
discovered problems. In fact, as the audit progressed, it became apparent that a large amount of cash
was missing. Numerous adjustments had been made to customer accounts with credit memoran-
dums, and many of the transactions had been posted several days late. In addition, there were nu-
merous cash payments for “office expenses.” When the audit was complete, it was determined that
more than $100,000 of funds was missing or improperly accounted for. All fingers pointed to John-
son. The bank’s president, who was a close friend of Johnson, was bewildered. How could this type
of thing happen at this bank?
Required
Prepare a written memo to the bank president, outlining the procedures that should be followed to
prevent this type of problem in the future.
ATC 4-5 Ethical Dilemma I need just a little extra money
John Riley, a certified public accountant, has worked for the past eight years as a payroll clerk for
Southeast Industries, a small furniture manufacturing firm in the Northeast. John recently experienced
unfortunate circumstances. His teenage son required major surgery and the medical bills not covered
by John’s insurance have financially strained John’s family.
John works hard and is a model employee. Although he received regular performance raises dur-
ing his first few years with Southeast, John’s wages have not increased in three years. John asked his
supervisor, Bill Jameson, for a raise. Bill agreed that John deserved a raise, but told him he could not
currently approve one because of sluggish sales.
A disappointed John returned to his duties while the financial pressures in his life continued. Two
weeks later, Larry Tyler, an assembly worker at Southwest, quit over a dispute with management. John
edm31125_ch04_130-161.indd 160 12/10/16 2:20 PM
xi
WHAT WE DID TO MAKE IT BETTER!
As discussed in the “Note from the Authors,” this text has been revised to include video
lectures that provide coverage of all the learning objectives included in the text. These
videos have been developed by a member of the author team and have the touch and feel
of a live lecture as opposed to a canned PowerPoint presentation with scripted narration.
The videos provide unparalleled opportunities for instructional innovation including the
development of flip courses, distance learning courses, and competency-based teaching.
The videos can also be used in traditional courses to help students who need additional
instruction. For example, students who are unable to keep up in class or who have to
miss class now have a video lecture that can be used to catch up. The videos can be
­assigned to individual students or to the class as a whole through Connect. The instructor
has complete control over student access to video content and the accompanying self-
assessment quizzes.
Beyond the lecture videos, we have reorganized Chapters 1 and 2 to provide greater
flexibility in establishing the pace of coverage. The proper pace is, of course, dependent on
student aptitude. Since student aptitude varies widely across schools, the pace of coverage
must also vary. To enhance flexibility, we divided Chapters 1 and 2 into sections.
Chapter 1, Section 1 covers basic terminology, introduces the accounting equation, and
demonstrates how business events are recorded under the accounting equation. Section 2
introduces financial statements. The end-of-chapter exercises and problems are also segre-
gated in separate sections. With this arrangement it is easy for instructors to treat the chapter
as two separate chapters, thereby slowing the pace and allowing more time to cover key
conceptual issues. Chapter 2 has also been divided into two sections: Chapter 2, Section 1
covers accruals, while Section 2 covers deferrals.
Breaking the chapters into sections offers an added benefit of promoting a stepwise
learning environment. The primary concepts are isolated and introduced in a simple environ-
ment. More complex relationships and details are then added to the basic foundation. Step-
wise learning is a hallmark of our teaching strategy.
The revision also includes many more detailed changes for each chapter. These changes
are described as follows.

● CHAPTER-SPECIFIC CHANGES
Chapter 1 An Introduction to
Accounting
• Revised learning objectives. Added learn-
ing objective for entity concept. Devel-
oped s­eparate learning objective for
statement of cash flows.
• Revised coverage of closing process.
• Revised Curious Accountant featuring new
high-profile companies and products.
• Updated Focus on International Issues box
that includes IFRS coverage.
• New Reality Bytes.
• Reorganized exercises and problems to
match the sequence learning objectives
are ­presented in text.
• Updated exercises, problems, and cases.
Chapter 2 Accounting for Accruals and
Deferrals
• Added video lectures and self-assessment
quizzes for each learning objective.
• Divided chapter into two sections thereby
providing more flexibility to set the pace of
­instruction.
• Revised learning objectives.
• Updated Curious Accountant content.
• New Reality Bytes.
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.

xii Survey of Accounting

Chapter 3 Accounting for
Merchandising Businesses
• Revised learning objectives.
• Revised chapter opening to comply with
FASB-issued Accounting Standards Up-
date (ASU) No. 2014-09
• are presented in text.
New Curious Accountant featuring new
high-profile companies and products.
• Updated The Financial Analyst content.
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Chapter 4 Internal Control, Accounting
for Cash, and Ethics
• Divided learning objective one into two
objectives, thereby separating coverage of
general internal control procedures for the
special procedures related to internal con-
trols for cash.
• New Curious Accountant featuring new
high-profile companies and products.
• Revised Exhibit 4.1 with data drawn from
the companies that comprise the Dow
Jones Industrial Average.
• Updated exercises, problems, and cases.
Chapter 5 Accounting for Receivables
and Inventory Cost Flow
• Revised learning objectives.
• New Curious Accountant featuring new
high-profile companies and products.
• Revised Exhibit 5.7 with data drawn from
the companies that comprise the Dow
Jones Industrial Average.
• Updated Reality Bytes.
• Updated Focus on International Issues.
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Chapter 6 Accounting for Long-Term
Operational Assets
• Revised learning objectives.
• Updated Curious Accountant featuring
new high-profile companies and products.
Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay
• Revised Exhibit 6.2 with data drawn from
the companies that comprise the Dow
Jones Industrial Average.
• New Reality Bytes.
• Reorganized exercises and problems to
match the sequence learning objectives
• Updated exercises, problems, and cases.
Chapter 7 Accounting for Liabilities
• Revised learning objectives.
• New Curious Accountant featuring new
high-profile companies and products.
• Revised Exhibit 7.5 with data drawn from
the companies that comprise the Dow
Jones ­Industrial Average.
• Updated Reality Bytes.
• Updated Focus on International Issues box
that includes IFRS coverage.
• Reorganized exercises and problems to
match the sequence learning objectives
are ­presented in text.
• Updated exercises, problems, and cases.
Chapter 8 Proprietorships,
Partnerships, and Corporations
• Revised learning objectives.
• Updated Curious Accountant.
• Updated Focus on International Issues box
that includes IFRS coverage.
• Revised Exhibit 8.3 with data drawn from
the companies that comprise the Dow
Jones ­Industrial Average.
• Updated Reality Bytes.
• Reorganized exercises and problems to
match the sequence learning objectives
are ­presented in text.
• Updated exercises, problems, and cases.
Chapter 9 Financial Statement
Analysis
• New Curious Accountant feature.
• Updated exercises, problems, and cases.
Chapter 10 An Introduction to
Management Accounting
• Revised learning objectives.
• Updated Curious Accountant feature.
xiii
 • Added content related to upstream and
downstream costs.
• Updated exercises, problems, and ATC
cases and added new exercises related to
upstream and downstream costs.
Chapter 11 Cost Behavior, Operating
Leverage, and Profitability Analysis
• Updated Curious Accountant feature.
• Updated exercises, problems, and cases.
Chapter 12 Cost Accumulation, Tracing,
and Allocation
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Chapter 13 Relevant Information for
Special Decisions
• Updated Focus on International Issues
feature.
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Chapter 14 Planning for Profit and Cost
Control
• Revised Curious Accountant feature.
• New Reality Bytes feature.
xiv
• Revised Focus on International Issues
­feature.
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Chapter 15 Performance Evaluation
•A
 dded video lectures and self-assessment
quizzes for each learning objective.
• Revised learning objectives.
• New Curious Accountant feature.
• Revised Reality Bytes feature.
• Reorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Chapter 16 Planning for Capital
Investments
• Added video lectures and self-assessment
quizzes for each learning objective.
• Revised learning objectives.
• Revised Curious Accountant feature.
• Revised Reality Bytes feature.
• R eorganized exercises and problems to
match the sequence learning objectives
are presented in text.
• Updated exercises, problems, and cases.
Survey of Accounting
Assurance of Learning Ready
Many educational institutions today are fo-
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ing, an important element of some
accreditation standards. Survey of Account-
ing, 5e, is designed specifically to support
your assurance of learning initiatives with a
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Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay
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xviii Survey of Accounting

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Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay xix

ACKNOWLEDGMENTS
We would like to express our appreciation to the people who have provided assistance in
the development of this textbook.
We recognize the following instructors for their invaluable feedback and involvement in the
development of Survey of Accounting, Fifth Edition. We are thankful for their feedback and
suggestions.
Reviewers
Our appreciation to those who reviewed the current and previous editions:
Wafeek Abdelsayed, Southern
Connecticut State University
Patricia Abels, University of Findlay
Khaled Abdou, Penn State
University–Berks Campus
Mollie Adams, Virginia Polytechnic
Institute
Gary Ames, Brigham Young
University–Idaho
David Bukovinsky, Wright State
University
Susan Cain, Southern Oregon
University
Alvaro Carreras, Barry University
Thomas Casey, DeVry University–
Tinley Park
Suzanne Cercone, Keystone
College
Al Chen, North Carolina State
University
Cheryl Corke, Genesee Community
College
Terry Dancer, Arkansas State
University
Bruce Darling, University of Oregon
Harry Davis, Baruch College
Julie Dilling, Fox Valley Technical
College
Timothy Dimond, Northern Illinois
University
Edwin A. Doty, Jr., East Carolina
University
xx
Andrew Faber, Tiffin University
Barbara Fox, Northern Illinois
University
Debbie Gahr, Waukesha County
Technical College
Dana Garner, Virginia Polytechnic
Institute
John Giles, North Carolina State
University
Gladys Gomez, University of Mary
Washington
Robert Holtfreter, Central
Washington University
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Tennessee–Knoxville
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College
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University
Ronald Jastrzebski, Penn State
University–Berks Campus
Ann Kakouras, Virginia Western
Community College
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State University
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University–Morgantown
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University
John Markert, Utica College
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Carolina A&T State University
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Carolina State University
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College
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University
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College
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Northern Colorado
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University
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the Behrend College
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Survey of Accounting
Hans Sprohge, Wright State
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Technology
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Lincoln Bloomington
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University

Special thanks to the talented people who prepared the supplements. These take a great deal of time and effort to
write and we appreciate their efforts. We want to thank LuAnn Bean of Florida Institute of Technology for preparing
the PowerPoints and Instructor’s Manual; Jeannie Folk for the Test Bank; and Helen Roybark and Kristine Palmer for
accuracy checking the text, solutions manual, and Test Bank. Thank you to Molly Brown of James Madison University
for reviewing the Connect Video Lecture assignments for accuracy and consistency. A special thanks to Linda Bell of
William Jewell College for her contribution to the Financial Statement Analysis material that appears in the Instructor
Manual and Instructor Library.

In addition to the helpful and generous colleagues listed, we thank the entire McGraw-Hill Education Survey of
­Accounting, 5e, team, including Tim Vertovec, Steve Schuetz, Danielle Andries, Dana Pauley, Brian Nacik, Kevin
­Moran, Xin Lin, Michelle Williams, and Matt Diamond. We deeply appreciate the long hours that you committed to the
formation of a high-quality text.
Thomas P. Edmonds • Christopher T. Edmonds • Philip R. Olds • Frances M. McNair • Bor-Yi Tsay

Thomas P. Edmonds/Christopher T. Edmonds/Philip R. Olds/Frances M. McNair/Bor-Yi Tsay xxi

xxii

BRIEF CONTENTS

Chapter 1 An Introduction to Accounting 2

Chapter 2 Accounting for Accruals and Deferrals 48

Chapter 3 Accounting for Merchandising Businesses 92

Chapter 4 Internal Controls, Accounting for Cash, and Ethics 130

Chapter 5 Accounting for Receivables and Inventory Cost Flow 162

Chapter 6 Accounting for Long-Term Operational Assets 206

Chapter 7 Accounting for Liabilities 246

Chapter 8 Proprietorships, Partnerships, and Corporations 292

Chapter 9 Financial Statement Analysis 326

Chapter 10 An Introduction to Management Accounting 364

Chapter 11 Cost Behavior, Operating Leverage, and Profitability

Analysis 406

Chapter 12 Cost Accumulation, Tracing, and Allocation 440

Chapter 13 Relevant Information for Special Decisions 470

Chapter 14 Planning for Profit and Cost Control 506

Chapter 15 Performance Evaluation 538

Chapter 16 Planning for Capital Investments 570

Appendix A Accessing the EDGAR Database through

the Internet 602
Appendix B The Double-Entry Accounting System 603
Glossary 611
Index 621

CONTENTS
Walkthrough viii
Chapter 1 An Introduction to Accounting 2
Section 1: Collecting and Organizing
Information 3
Role of Accounting in Society 4
Accounting Facilitates Resource
Allocation 4
Accounting Provides Information 5
Types of Accounting Information 6
Nonbusiness Resource Usage 6
Accounting Improves
Communication 6
Accounting Provides Jobs 7
Reporting Entities 8
Elements of Financial Statements 10
Using Accounts to Gather
Information 10
Creating an Accounting
Equation 11
Recording Business Events under an
Accounting Equation 13
Asset Source Transactions 13
Asset Exchange Transactions 14
Another Asset Source
Transaction 14
Asset Use Transactions 14
Summary of Transactions 16
Interpreting Information Shown in the
Accounting Equation 16
The Left versus the Right Side of the
Accounting Equation 16
Cash and Retained Earnings 17
Business Liquidations Resulting from
Net Losses 17
Business Liquidations Resulting from
the Mismanagement of Assets 18
xxiii
Two Views of the Right Side of the
Accounting Equation 18
Recap: Types of Transactions 18
Section 2: Reporting Information 20
Preparing an Income Statement,
a Statement of Changes in
Stocholders’ Equity, and a
Balance Sheet 20
Income Statement and the Matching
Concept 20
Statement of Changes in
Stockholders’ Equity 22
Balance Sheet 22
Preparing the Statement of Cash
Flows 23
Distinguish between Permanent and
Temporary Accounts 24
The Horizontal Financial Statements
Model 25
Real-World Financial Reports 26
Annual Report for Target
Corporation 28
Special Terms in Real-World
Reports 28
A Look Back 29
A Look Forward 29
Self-Study Review Problem 30
Key Terms 31
Questions 31
Multiple-Choice Questions 32
Section 1 Exercises 32
Section 2 Exercises 36
Sections 1 and 2 Problems 41
Analyze, Think, Communicate 45
xxiv
Chapter 2 Accounting for Accruals and Deferrals
Section 1: Accounting for
Accruals 49
Accounting for Receivables 50
Recognizing Accounts Receivable 50
Other Events 51
Accounting for Payables (Adjusting the
Accounts) 52
Summary of Events and General
Ledger 53
Preparing Financial Statements 54
Income Statement 54
Statements of Changes in
Stockholders’ Equity 54
Balance Sheet 54
Statement of Cash Flows 54
Comparing Cash Flow from
Operations with Net Income 56
The Closing Process 56
Steps in an Accounting Cycle 57
The Matching Concept 57
The Conservatism Principle 58
Section 2: Accounting for Deferrals 58
Second Accounting Cycle 59
Accounting for Supplies 59
Chapter 3 Accounting for Merchandising Businesses
Accounting for Inventory
Transactions 95
Allocating Inventory Cost between
Asset and Expense Accounts 95
Perpetual Inventory System 96
Effects of 2018 Events on Financial
Statements 96
Financial Statements for 2018 97
Transactions Related to Inventory
Purchases 98
Effects of 2019 Events on Financial
Statements 99
48
Year-End Adjustment for
Supplies 60
Accounting for Prepaid Items 61
Year-End Adjustment for Prepaid
Rent 62
Accounting for Unearned
Revenue 63
Year-End Adjustment for Unearned
Revenue 63
Other 2019 Events 64
Summary of Events and General
Ledger 64
Preparing Financial Statements 67
Closing for the 2019 Accounting
Period 68
Transaction Classification 70
A Look Back 71
A Look Forward 71
Self-Study Review Problem 72
Key Terms 73
Questions 74
Multiple-Choice Questions 74
Section 1 Exercises 74
Section 2 Exercises 77
Sections 1 and 2 Problems 84
Analyze, Think, Communicate 89
92
Accounting for Purchase Returns and
Allowances 99
Purchase Discounts 100
The Cost of Financing
Inventory 100
Accounting for Transportation
Costs 101
Adjustment for Lost, Damaged, or
Stolen Inventory 103
Recognizing Gains and
Losses 105
Multistep Income Statement 105
 xxv

Events Affecting Sales 107 Appendix 112

Accounting for Sales Returns and Self-Study Review Problem 113
Allowances 108 Key Terms 115
Accounting for Sales Discounts 109 Questions 115
Net Sales 109 Multiple-Choice Questions 116
Exercises 116
Common Size Financial
Problems 123
Statements 109
Analyze, Think, Communicate 127
A Look Back 111
A Look Forward 112

Chapter 4 Internal Controls, Accounting for Cash, and

Ethics 130
Key Features of Internal Control Role of the Independent
Systems 132 Auditor 145
Separation of Duties 132 The Financial Statement
Quality of Employees 133 Audit 146
Bonded Employees 133 Materiality and Financial
Audits 146
Required Absences 133
Types of Audit Opinions 147
Procedures Manual 133
Confidentiality 147
Accounting for Cash 135 A Look Back 148
Controlling Cash 135 A Look Forward 149
Checking Account Documents 136 Self-Study Review Problem 149
Reconciling the Bank Account 137 Key Terms 150
Determining True Cash Questions 150
Balance 137 Multiple-Choice Questions 151
Illustrating a Bank Exercises 151
Reconciliation 140 Problems 155
Importance of Ethics 143 Analyze, Think, Communicate 159
Common Features of Criminal and
Ethical Misconduct 143

Chapter 5 Accounting for Receivables and Inventory Cost

Flow 162
Estimating Uncollectible Accounts Analysis of 2018 Financial
Expense Using the Percent of Revenue Statements 166
Method 164 Accounting Events Affecting the
2019 Period 167
Accounting Events Affecting the
2018 Period 164
xxvi
Analysis of the 2019 Financial
Statements 169
Estimating Uncollectible Accounts
Expense Using the Percent of
Receivables Method 170
Aging Accounts Receivable 171
Matching Revenues and Expenses
versus Asset Measurement 172
Accounting for Notes Receivable
(Promissory Notes) 172
How Accounting for Notes
Receivable Affects Financial
Statements 173
Financial Statements 175
Accounting for Credit Card Sales 176
Inventory Cost Flow Methods 177
Chapter 6 Accounting for Long-Term Operational
Assets 206
Long-Term Operational Assets
Tangible Long-Term Assets 208
Intangible Assets 208
Determining the Cost of Long-Term
Assets 209
Methods of Recognizing Depreciation
Expense 210
Dryden Enterprises Illustration
Straight-Line Depreciation 211
Effects on the Financial
Statements 212
Double-Declining-Balance
Depreciation 213
Effects on the Financial
Statements 214
Units-of-Production Depreciation 216
Effects on the Financial
Statements 217
Accounting for the Disposal of Long-
Term Operational Assets 217
Comparing the Depreciation
Methods 218
Specific Identification 177
First-In, First-Out (FIFO) 178
Last-In, First-Out (LIFO) 178
Weighted Average 178
Physical Flow 178
Effect of Cost Flow on Financial
Statements 178
A Look Back 185
A Look Forward 185
Self-Study Review Problem 1 186
Self-Study Review Problem 2 187
Key Terms 188
Questions 188
Multiple-Choice Questions 189
Exercises 189
Problems 197
Analyze, Think, Communicate 203
208 Revision of Estimates 219
Revision of Life 219
Revision of Salvage 219
Continuing Expenditures for Plant
Assets 219
Costs That Are Expensed 219
Costs That Are Capitalized 220
211 Natural Resources 222
Intangible Assets 222
Trademarks 222
Patents 223
Copyrights 224
Franchises 224
Goodwill 224
Expense Recognition for Intangible
Assets 225
Expensing Intangible Assets with
Identifiable Useful Lives 225
Impairment Losses for Intangible
Assets with Indefinite Useful
Lives 225
Balance Sheet Presentation 226
 xxvii

Effect of Judgment and Self-Study Review Problem 229

Estimation 226 Key Terms 230
Judgment in Financial Reporting 226 Questions 230
Effect of Industry Multiple-Choice Questions 230
Characteristics 228 Exercises 230
A Look Back 228 Problems 237
A Look Forward 229 Analyze, Think, Communicate 243

Chapter 7 Accounting for Liabilities 246

Current Liabilities 248 Effect of Events on Financial
Statements 262
Accounting for Notes Payable 248
Financial Statements 264
Accounting for Sales Tax 249
Contingent Liabilities 250 Amortization of a Bond Premium Using
the Straight-Line Method 266
Warranty Obligations 251
The Market Rate of Interest 266
Financial Statements 252
Security for Loan Agreements 267
Accounting for Long-Term Debt 253
Installment Notes Payable 254 Current versus Noncurrent 267
A Look Back 269
Line of Credit 256
A Look Forward 269
Bond Liabilities 258 Appendix 270
Advantages of Issuing Bonds 258
Self-Study Review Problem 274
Bonds Issued at Face Value 258 Key Terms 275
Effect of Events on Financial Questions 275
Statements 259
Multiple-Choice Questions 275
Financial Statements 260
Exercises 276
Effect of Semiannual Interest
Problems 283
Payments 261
Analyze, Think, Communicate 289
Amortization of a Bond Discount Using
the Straight-Line Method 262
Effective Interest Rate 262
Bond Prices 262

Chapter 8 Proprietorships, Partnerships, and

Corporations 292
Forms of Business Characteristics of Capital Stock 298
Organizations 294 Par Value 298
Advantages and Disadvantages of Stated Value 299
Different Forms of Business Other Valuation Terminology 299
Organization 294
Stock: Authorized, Issued, and
Appearance of Capital Structure in Outstanding 299
Financial Statements 297
xxviii
Common versus Preferred Stock
Common Stock 300
Preferred Stock 300
Classes of Stock 301
Accounting for Stock Transactions on
the Day of Issue 301
Issuing Par Value Stock 301
Stock Classification 302
Stock Issued at Stated Value 302
Stock Issued with No Par Value 302
Financial Statement
Presentation 303
Treasury Stock 303
Cash Dividends 305
Declaration Date 305
Date of Record 306
Payment Date 306
Stock Dividends and Splits 306
Stock Dividends 306
Stock Splits 306
Chapter 9 Financial Statement Analysis
Factors in Communicating Useful
Information 328
The Users 328
The Types of Decisions 328
Information Analysis 328
Methods of Analysis 328
Horizontal Analysis 329
Vertical Analysis 331
Ratio Analysis 332
Measures of Debt-Paying Ability
Liquidity Ratios 333
Working Capital 333
Current Ratio 334
Quick Ratio 334
Accounts Receivable Ratios 335
Inventory Ratios 336
299 Appropriation of Retained
Earnings 307
Financial Statement
Presentation 307
Investing in Capital Stock 308
Receiving Dividends 308
Increasing the Price of Stock 309
Exercising Control through Stock
Ownership 309
A Look Back 310
A Look Forward 311
Self-Study Review Problem 311
Key Terms 312
Questions 312
Multiple-Choice Questions 313
Exercises 313
Problems 319
Analyze, Think, Communicate 323
326
Solvency Ratios 337
Debt Ratios 337
Number of Times Interest is
Earned 337
Plant Assets to Long-Term
Liabilities 339
Measures of Profitability 339
Measures of Managerial
Effectiveness 339
Net Margin (or Return on Sales 339
333
Asset Turnover Ratio 340
Return on Investment 340
Return on Equity 341
Stock Market Ratios 341
Earning per Share 342
Book Value 342

Price-Earnings Ratio 342
Dividend Yield 343
Other Ratios 343
Limitations of Financial Statement
Analysis 344
A Look Back 346
A Look Forward 346
Chapter 10 An Introduction to Management
Accounting
Differences between Managerial and
Financial Accounting 366
Users and Types of Information 366
Level of Aggregation 366
Regulation 367
Information Characteristics 367
Time Horizon and Reporting
Frequency 367
Product Costing in Manufacturing
Companies 368
Components of Product Cost 368
Tabor Manufacturing Company 368
Average Cost per Unit 369
Costs Can Be Assets or
Expenses 369
Effect of Manufacturing Product Costs
on Financial Statements 370
Upstream, Midstream, and
Downstream Costs in Manusfacturing,
Service, and Merchandising
Companies 375
Chapter 11 Cost Behavior, Operating Leverage, and
Profitability Analysis
Fixed Cost Behavior 408
Operating Leverage 408
Calculating Percentage
Change 410
xxix
Self-Study Review Problem 347
Key Terms 349
Questions 349
Multiple-Choice Questions 349
Exercises 349
Problems 354
Analyze, Think, Communicate 360
364
Cost Classification in Service and
Merchandising Companies 376
Schedule of Cost of Goods
Manufactured and Sold 378
Just-in-Time Inventory 380
Just-in-Time Illustration 380
Statement of Ethical Professional
Practice 382
A Look Back 383
A Look Forward 384
Appendix 385
Self-Study Review Problem 386
Key Terms 389
Questions 389
Multiple-Choice Questions 390
Exercises 390
Problems 397
Analyze, Think, Communicate 402
406
Risk and Reward Assessment 410
Variable Cost Behavior 410
An Income Statement under the
Contribution Margin Approach 412
xxx

Measuring Operating Leverage Using Calculating the Margin of Safety 419

Contribution Margin 412 A Look Back 420
Cost Behavior Summarized 413 A Look Forward 421
Determining the Break-Even Self-Study Review Problem 1 421
Point 416 Self-Study Review Problem 2 423
Key Terms 425
Equation Method 417
Questions 425
Contribution Margin per Unit
Method 417 Multiple-Choice Questions 425
Exercises 425
Determining the Sales Volume
Necessary to Reach a Desired Problems 431
Profit 418 Analyze, Think, Communicate 436

Chapter 12 Cost Accumulation, Tracing, and

Allocation 440
Determine the Cost of Cost Cost Drivers for Fixed Overhead
Objects 442 Costs 453
Estimated versus Actual Cost 442 The Human Factor: A Comprehensive
Assignment of Costs to Objects in a Example 455
Retail Business 442 Using Cost Allocations in a
Identifying Direct and Indirect Budgeting Decision 455
Costs 443 Using Cost Drivers to Make
Cost Classifications—Independent Allocations 455
and Context Sensitive 444 Choosing the Best Cost Driver 456
Allocating Indirect Costs to Controlling Emotions 456
Objects 444 A Look Back 457
Determining the Cost to Be Allocated A Look Forward 457
Using Cost Pools 446 Self-Study Review Problem 457
Selecting the Cost Driver 447 Key Terms 459
Cause and Effect versus Availability Questions 459
of Information 447 Multiple-Choice Questions 460
Behavioral Implications 449 Exercises 460
Cost Drivers for Variable Overhead Problems 464
Costs 451 Analyze, Think, Communicate 467
 xxxi

Chapter 13 Relevant Information for Special

Decisions
Relevant Information 472
Sunk Cost 472
Opportunity Costs 472
Relevance Is an Independent
Concept 473
Relevance Is Context
Sensitive 473
Relationship between Relevance
and Accuracy 473
Quantitative versus Qualitative
Characteristics of Decision
Making 474
Differential Revenue and Avoidable
Cost 474
Relationship of Cost Avoidance to a
Cost Hierarchy 474
Relevant Information and Special
Decisions 475
Special Order Decisions 475
Quantitative Analysis 475
Opportunity Costs 477
Relevance and the Decision
Content 477
Qualitative Characteristics
470
Outsourcing Decisions 478
Quantitative Analysis 478
Opportunity Costs 479
Evaluating the Effect of Growth on
the Level of Production 479
Qualitative Features 480
Segment Elimination Decisions 481
Quantitative Analysis 481
Qualitative Considerations in Decisions
to Eliminate Segments 482
Summary of Relationships between
Avoidable Costs and the Hierarchy of
Business Activity 484
Asset Replacement Decisions 484
Quantitative Analysis 484
A Look Back 485
A Look Forward 486
Self-Study Review Problem 487
Key Terms 489
Questions 489
Multiple-Choice Questions 490
Exercises 490
Problems 497
478 Analyze, Think, Communicate 501

Chapter 14 Planning for Profit and Cost Control 506

The Planning Process 508
Three Levels of Planning for Business
Activity 508
Advantages of Budgeting 508
Budgeting and Human
Behavior 509
The Master Budget 510
Hampton Hams Budgeting
Illustration 511
Sales Budget 511
Projected Sales 511
Schedule of Cash Receipts
Pro Forma Financial Statement
Data 512
Inventory Purchases Budget 513
Schedule of Cash Payments for
Inventory Purchases 514
Pro Forma Financial Statement
Data 515
Selling and Administrative Expense
Budget 515
Schedule of Cash Payments for
Selling and Administrative
Expenses 515
511
xxxii

Pro Forma Financial Statement Pro Forma Statement of Cash

Data 517 Flows 520
Cash Budget 517 A Look Back 521
Cash Receipts Section 518 A Look Forward 522
Self-Study Review Problem 522
Cash Payments Section 518
Key Terms 524
Financing Section 518
Questions 524
Pro Forma Financial Statement
Multiple-Choice Questions 524
Data 519
Exercises 525
Pro Forma Financial Statements 519 Problems 530
Pro Forma Income Statement 519 Analyze, Think, Communicate 534
Pro Forma Balance Sheet 520

Chapter 15 Performance Evaluation 538

Decentralization Concept 540
Responsibility Centers 540
Controllability Concept 540
Preparing Flexible
Budgets 541
Determining Variances for
Performance Evaluation 542
Sales and Variable Cost Volume
Variances 543
Interpreting the Sales and Variable
Cost Volume Variances 543
Fixed Cost Considerations 544
Flexible Budget Variances 544
Calculating the Sales Price
Variance 545
The Human Element Associated with
Flexible Budget Variances 546
Need for Standards 547
Managerial Performance
Measurement 547
Return on Investment 548
Qualitative Considerations 549
Factors Affecting Return on
Investment 549
Residual Income 550
Calculating Multiple ROIs and/or RIs
for the Same Company 552
Responsibility Accounting and the
Balanced Scorecard 553
A Look Back 553
A Look Forward 554
Self-Study Review Problem 1 554
Self-Study Review Problem 2 556
Key Terms 557
Questions 557
Multiple-Choice Questions 558
Exercises 558
Problems 563
Analyze, Think, Communicate 566
 1

Chapter 16 Planning for Capital Investments 570

Capital Investment Decisions 572 Techniques that Ignore the Time Value
Time Value of Money 572 of Money 586
Determining the Minimum Rate of Payback Method 586
Return 572 Unadjusted Rate of Return 587
Converting Future Cash Inflows to Postaudits 589
Their Equivalent Present Values 573
A Look Back 589
Techniques for Analyzing Capital Appendix 590
Investment Proposals 577 Self-Study Review Problem 591
Net Present Value 577 Key Terms 592
Internal Rate of Return 578 Questions 592
Multiple-Choice Questions 593
Techniques for Measuring Investment
Exercises 593
Cash Flows 579
Problems 596
Cash Inflows 579
Analyze, Think, Communicate 599
Cash Outflows 580
Techniques for Comparing Alternative
Capital Investment
Opportunities 580
Net Present Value 580

Appendix A Accessing the EDGAR Database through the Internet 602

Appendix B The Double-Entry Accounting System 603
Glossary 611
Index 621
CHAPTER 1

An Introduction to Accounting
LEARNING OBJECTIVES
After you have mastered the material in this chapter, you will be able to:
SECTION 1: COLLECTING AND ORGANIZING INFORMATION

LO 1-1 Identify the ways accounting benefits society.

LO 1-2 Identify reporting entities.
LO 1-3 Identify the components of the accounting equation.
LO 1-4 Show how business events affect the accounting equation.
LO 1-5 Interpret information shown in an accounting equation.
LO 1-6 Classify business events as asset source, use, or exchange transactions.
SECTION 2: REPORTING INFORMATION

LO 1-7 Prepare an income statement, a statement of changes in stockholders’ equity, and a

balance sheet.
LO 1-8 Prepare a statement of cash flows.
LO 1-9 Distinguish between permanent and temporary accounts.
LO 1-10 Record business events using a horizontal financial statements model.

Video lectures and accompanying self-assessment quizzes are available in Connect for all learning
objectives.
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 DANCE ON STILTS AT THE GIRLS’ UNYAGO, NIUCHI

Newala, too, suffers from the distance of its water-supply—at least

the Newala of to-day does; there was once another Newala in a lovely
valley at the foot of the plateau. I visited it and found scarcely a trace
of houses, only a Christian cemetery, with the graves of several
missionaries and their converts, remaining as a monument of its
former glories. But the surroundings are wonderfully beautiful. A
thick grove of splendid mango-trees closes in the weather-worn
crosses and headstones; behind them, combining the useful and the
agreeable, is a whole plantation of lemon-trees covered with ripe
fruit; not the small African kind, but a much larger and also juicier
imported variety, which drops into the hands of the passing traveller,
without calling for any exertion on his part. Old Newala is now under
the jurisdiction of the native pastor, Daudi, at Chingulungulu, who,
as I am on very friendly terms with him, allows me, as a matter of
course, the use of this lemon-grove during my stay at Newala.
 FEET MUTILATED BY THE RAVAGES OF THE “JIGGER”
(Sarcopsylla penetrans)

The water-supply of New Newala is in the bottom of the valley,

some 1,600 feet lower down. The way is not only long and fatiguing,
but the water, when we get it, is thoroughly bad. We are suffering not
only from this, but from the fact that the arrangements at Newala are
nothing short of luxurious. We have a separate kitchen—a hut built
against the boma palisade on the right of the baraza, the interior of
which is not visible from our usual position. Our two cooks were not
long in finding this out, and they consequently do—or rather neglect
to do—what they please. In any case they do not seem to be very
particular about the boiling of our drinking-water—at least I can
attribute to no other cause certain attacks of a dysenteric nature,
from which both Knudsen and I have suffered for some time. If a
man like Omari has to be left unwatched for a moment, he is capable
of anything. Besides this complaint, we are inconvenienced by the
state of our nails, which have become as hard as glass, and crack on
the slightest provocation, and I have the additional infliction of
pimples all over me. As if all this were not enough, we have also, for
the last week been waging war against the jigger, who has found his
Eldorado in the hot sand of the Makonde plateau. Our men are seen
all day long—whenever their chronic colds and the dysentery likewise
raging among them permit—occupied in removing this scourge of
Africa from their feet and trying to prevent the disastrous
consequences of its presence. It is quite common to see natives of
this place with one or two toes missing; many have lost all their toes,
or even the whole front part of the foot, so that a well-formed leg
ends in a shapeless stump. These ravages are caused by the female of
Sarcopsylla penetrans, which bores its way under the skin and there
develops an egg-sac the size of a pea. In all books on the subject, it is
stated that one’s attention is called to the presence of this parasite by
an intolerable itching. This agrees very well with my experience, so
far as the softer parts of the sole, the spaces between and under the
toes, and the side of the foot are concerned, but if the creature
penetrates through the harder parts of the heel or ball of the foot, it
may escape even the most careful search till it has reached maturity.
Then there is no time to be lost, if the horrible ulceration, of which
we see cases by the dozen every day, is to be prevented. It is much
easier, by the way, to discover the insect on the white skin of a
European than on that of a native, on which the dark speck scarcely
shows. The four or five jiggers which, in spite of the fact that I
constantly wore high laced boots, chose my feet to settle in, were
taken out for me by the all-accomplished Knudsen, after which I
thought it advisable to wash out the cavities with corrosive
sublimate. The natives have a different sort of disinfectant—they fill
the hole with scraped roots. In a tiny Makua village on the slope of
the plateau south of Newala, we saw an old woman who had filled all
the spaces under her toe-nails with powdered roots by way of
prophylactic treatment. What will be the result, if any, who can say?
The rest of the many trifling ills which trouble our existence are
really more comic than serious. In the absence of anything else to
smoke, Knudsen and I at last opened a box of cigars procured from
the Indian store-keeper at Lindi, and tried them, with the most
distressing results. Whether they contain opium or some other
narcotic, neither of us can say, but after the tenth puff we were both
“off,” three-quarters stupefied and unspeakably wretched. Slowly we
recovered—and what happened next? Half-an-hour later we were
once more smoking these poisonous concoctions—so insatiable is the
craving for tobacco in the tropics.
Even my present attacks of fever scarcely deserve to be taken
seriously. I have had no less than three here at Newala, all of which
have run their course in an incredibly short time. In the early
afternoon, I am busy with my old natives, asking questions and
making notes. The strong midday coffee has stimulated my spirits to
an extraordinary degree, the brain is active and vigorous, and work
progresses rapidly, while a pleasant warmth pervades the whole
body. Suddenly this gives place to a violent chill, forcing me to put on
my overcoat, though it is only half-past three and the afternoon sun
is at its hottest. Now the brain no longer works with such acuteness
and logical precision; more especially does it fail me in trying to
establish the syntax of the difficult Makua language on which I have
ventured, as if I had not enough to do without it. Under the
circumstances it seems advisable to take my temperature, and I do
so, to save trouble, without leaving my seat, and while going on with
my work. On examination, I find it to be 101·48°. My tutors are
abruptly dismissed and my bed set up in the baraza; a few minutes
later I am in it and treating myself internally with hot water and
lemon-juice.
Three hours later, the thermometer marks nearly 104°, and I make
them carry me back into the tent, bed and all, as I am now perspiring
heavily, and exposure to the cold wind just beginning to blow might
mean a fatal chill. I lie still for a little while, and then find, to my
great relief, that the temperature is not rising, but rather falling. This
is about 7.30 p.m. At 8 p.m. I find, to my unbounded astonishment,
that it has fallen below 98·6°, and I feel perfectly well. I read for an
hour or two, and could very well enjoy a smoke, if I had the
wherewithal—Indian cigars being out of the question.
Having no medical training, I am at a loss to account for this state
of things. It is impossible that these transitory attacks of high fever
should be malarial; it seems more probable that they are due to a
kind of sunstroke. On consulting my note-book, I become more and
more inclined to think this is the case, for these attacks regularly
follow extreme fatigue and long exposure to strong sunshine. They at
least have the advantage of being only short interruptions to my
work, as on the following morning I am always quite fresh and fit.
My treasure of a cook is suffering from an enormous hydrocele which
makes it difficult for him to get up, and Moritz is obliged to keep in
the dark on account of his inflamed eyes. Knudsen’s cook, a raw boy
from somewhere in the bush, knows still less of cooking than Omari;
consequently Nils Knudsen himself has been promoted to the vacant
post. Finding that we had come to the end of our supplies, he began
by sending to Chingulungulu for the four sucking-pigs which we had
bought from Matola and temporarily left in his charge; and when
they came up, neatly packed in a large crate, he callously slaughtered
the biggest of them. The first joint we were thoughtless enough to
entrust for roasting to Knudsen’s mshenzi cook, and it was
consequently uneatable; but we made the rest of the animal into a
jelly which we ate with great relish after weeks of underfeeding,
consuming incredible helpings of it at both midday and evening
meals. The only drawback is a certain want of variety in the tinned
vegetables. Dr. Jäger, to whom the Geographical Commission
entrusted the provisioning of the expeditions—mine as well as his
own—because he had more time on his hands than the rest of us,
seems to have laid in a huge stock of Teltow turnips,[46] an article of
food which is all very well for occasional use, but which quickly palls
when set before one every day; and we seem to have no other tins
left. There is no help for it—we must put up with the turnips; but I
am certain that, once I am home again, I shall not touch them for ten
years to come.
Amid all these minor evils, which, after all, go to make up the
genuine flavour of Africa, there is at least one cheering touch:
Knudsen has, with the dexterity of a skilled mechanic, repaired my 9
× 12 cm. camera, at least so far that I can use it with a little care.
How, in the absence of finger-nails, he was able to accomplish such a
ticklish piece of work, having no tool but a clumsy screw-driver for
taking to pieces and putting together again the complicated
mechanism of the instantaneous shutter, is still a mystery to me; but
he did it successfully. The loss of his finger-nails shows him in a light
contrasting curiously enough with the intelligence evinced by the
above operation; though, after all, it is scarcely surprising after his
ten years’ residence in the bush. One day, at Lindi, he had occasion
to wash a dog, which must have been in need of very thorough
cleansing, for the bottle handed to our friend for the purpose had an
extremely strong smell. Having performed his task in the most
conscientious manner, he perceived with some surprise that the dog
did not appear much the better for it, and was further surprised by
finding his own nails ulcerating away in the course of the next few
days. “How was I to know that carbolic acid has to be diluted?” he
mutters indignantly, from time to time, with a troubled gaze at his
mutilated finger-tips.
 Since we came to Newala we have been making excursions in all
directions through the surrounding country, in accordance with old
habit, and also because the akida Sefu did not get together the tribal
elders from whom I wanted information so speedily as he had
promised. There is, however, no harm done, as, even if seen only
from the outside, the country and people are interesting enough.
The Makonde plateau is like a large rectangular table rounded off
at the corners. Measured from the Indian Ocean to Newala, it is
about seventy-five miles long, and between the Rovuma and the
Lukuledi it averages fifty miles in breadth, so that its superficial area
is about two-thirds of that of the kingdom of Saxony. The surface,
however, is not level, but uniformly inclined from its south-western
edge to the ocean. From the upper edge, on which Newala lies, the
eye ranges for many miles east and north-east, without encountering
any obstacle, over the Makonde bush. It is a green sea, from which
here and there thick clouds of smoke rise, to show that it, too, is
inhabited by men who carry on their tillage like so many other
primitive peoples, by cutting down and burning the bush, and
manuring with the ashes. Even in the radiant light of a tropical day
such a fire is a grand sight.
Much less effective is the impression produced just now by the
great western plain as seen from the edge of the plateau. As often as
time permits, I stroll along this edge, sometimes in one direction,
sometimes in another, in the hope of finding the air clear enough to
let me enjoy the view; but I have always been disappointed.
Wherever one looks, clouds of smoke rise from the burning bush,
and the air is full of smoke and vapour. It is a pity, for under more
favourable circumstances the panorama of the whole country up to
the distant Majeje hills must be truly magnificent. It is of little use
taking photographs now, and an outline sketch gives a very poor idea
of the scenery. In one of these excursions I went out of my way to
make a personal attempt on the Makonde bush. The present edge of
the plateau is the result of a far-reaching process of destruction
through erosion and denudation. The Makonde strata are
everywhere cut into by ravines, which, though short, are hundreds of
yards in depth. In consequence of the loose stratification of these
beds, not only are the walls of these ravines nearly vertical, but their
upper end is closed by an equally steep escarpment, so that the
western edge of the Makonde plateau is hemmed in by a series of
deep, basin-like valleys. In order to get from one side of such a ravine
to the other, I cut my way through the bush with a dozen of my men.
It was a very open part, with more grass than scrub, but even so the
short stretch of less than two hundred yards was very hard work; at
the end of it the men’s calicoes were in rags and they themselves
bleeding from hundreds of scratches, while even our strong khaki
suits had not escaped scatheless.

NATIVE PATH THROUGH THE MAKONDE BUSH, NEAR

MAHUTA

I see increasing reason to believe that the view formed some time
back as to the origin of the Makonde bush is the correct one. I have
no doubt that it is not a natural product, but the result of human
occupation. Those parts of the high country where man—as a very
slight amount of practice enables the eye to perceive at once—has not
yet penetrated with axe and hoe, are still occupied by a splendid
timber forest quite able to sustain a comparison with our mixed
forests in Germany. But wherever man has once built his hut or tilled
his field, this horrible bush springs up. Every phase of this process
may be seen in the course of a couple of hours’ walk along the main
road. From the bush to right or left, one hears the sound of the axe—
not from one spot only, but from several directions at once. A few
steps further on, we can see what is taking place. The brush has been
cut down and piled up in heaps to the height of a yard or more,
between which the trunks of the large trees stand up like the last
pillars of a magnificent ruined building. These, too, present a
melancholy spectacle: the destructive Makonde have ringed them—
cut a broad strip of bark all round to ensure their dying off—and also
piled up pyramids of brush round them. Father and son, mother and
son-in-law, are chopping away perseveringly in the background—too
busy, almost, to look round at the white stranger, who usually excites
so much interest. If you pass by the same place a week later, the piles
of brushwood have disappeared and a thick layer of ashes has taken
the place of the green forest. The large trees stretch their
smouldering trunks and branches in dumb accusation to heaven—if
they have not already fallen and been more or less reduced to ashes,
perhaps only showing as a white stripe on the dark ground.
This work of destruction is carried out by the Makonde alike on the
virgin forest and on the bush which has sprung up on sites already
cultivated and deserted. In the second case they are saved the trouble
of burning the large trees, these being entirely absent in the
secondary bush.
After burning this piece of forest ground and loosening it with the
hoe, the native sows his corn and plants his vegetables. All over the
country, he goes in for bed-culture, which requires, and, in fact,
receives, the most careful attention. Weeds are nowhere tolerated in
the south of German East Africa. The crops may fail on the plains,
where droughts are frequent, but never on the plateau with its
abundant rains and heavy dews. Its fortunate inhabitants even have
the satisfaction of seeing the proud Wayao and Wamakua working
for them as labourers, driven by hunger to serve where they were
accustomed to rule.
But the light, sandy soil is soon exhausted, and would yield no
harvest the second year if cultivated twice running. This fact has
been familiar to the native for ages; consequently he provides in
time, and, while his crop is growing, prepares the next plot with axe
and firebrand. Next year he plants this with his various crops and
lets the first piece lie fallow. For a short time it remains waste and
desolate; then nature steps in to repair the destruction wrought by
man; a thousand new growths spring out of the exhausted soil, and
even the old stumps put forth fresh shoots. Next year the new growth
is up to one’s knees, and in a few years more it is that terrible,
impenetrable bush, which maintains its position till the black
occupier of the land has made the round of all the available sites and
come back to his starting point.
The Makonde are, body and soul, so to speak, one with this bush.
According to my Yao informants, indeed, their name means nothing
else but “bush people.” Their own tradition says that they have been
settled up here for a very long time, but to my surprise they laid great
stress on an original immigration. Their old homes were in the
south-east, near Mikindani and the mouth of the Rovuma, whence
their peaceful forefathers were driven by the continual raids of the
Sakalavas from Madagascar and the warlike Shirazis[47] of the coast,
to take refuge on the almost inaccessible plateau. I have studied
African ethnology for twenty years, but the fact that changes of
population in this apparently quiet and peaceable corner of the earth
could have been occasioned by outside enterprises taking place on
the high seas, was completely new to me. It is, no doubt, however,
correct.
The charming tribal legend of the Makonde—besides informing us
of other interesting matters—explains why they have to live in the
thickest of the bush and a long way from the edge of the plateau,
instead of making their permanent homes beside the purling brooks
and springs of the low country.
“The place where the tribe originated is Mahuta, on the southern
side of the plateau towards the Rovuma, where of old time there was
nothing but thick bush. Out of this bush came a man who never
washed himself or shaved his head, and who ate and drank but little.
He went out and made a human figure from the wood of a tree
growing in the open country, which he took home to his abode in the
bush and there set it upright. In the night this image came to life and
was a woman. The man and woman went down together to the
Rovuma to wash themselves. Here the woman gave birth to a still-
born child. They left that place and passed over the high land into the
valley of the Mbemkuru, where the woman had another child, which
was also born dead. Then they returned to the high bush country of
Mahuta, where the third child was born, which lived and grew up. In
course of time, the couple had many more children, and called
themselves Wamatanda. These were the ancestral stock of the
Makonde, also called Wamakonde,[48] i.e., aborigines. Their
forefather, the man from the bush, gave his children the command to
bury their dead upright, in memory of the mother of their race who
was cut out of wood and awoke to life when standing upright. He also
warned them against settling in the valleys and near large streams,
for sickness and death dwelt there. They were to make it a rule to
have their huts at least an hour’s walk from the nearest watering-
place; then their children would thrive and escape illness.”
The explanation of the name Makonde given by my informants is
somewhat different from that contained in the above legend, which I
extract from a little book (small, but packed with information), by
Pater Adams, entitled Lindi und sein Hinterland. Otherwise, my
results agree exactly with the statements of the legend. Washing?
Hapana—there is no such thing. Why should they do so? As it is, the
supply of water scarcely suffices for cooking and drinking; other
people do not wash, so why should the Makonde distinguish himself
by such needless eccentricity? As for shaving the head, the short,
woolly crop scarcely needs it,[49] so the second ancestral precept is
likewise easy enough to follow. Beyond this, however, there is
nothing ridiculous in the ancestor’s advice. I have obtained from
various local artists a fairly large number of figures carved in wood,
ranging from fifteen to twenty-three inches in height, and
representing women belonging to the great group of the Mavia,
Makonde, and Matambwe tribes. The carving is remarkably well
done and renders the female type with great accuracy, especially the
keloid ornamentation, to be described later on. As to the object and
meaning of their works the sculptors either could or (more probably)
would tell me nothing, and I was forced to content myself with the
scanty information vouchsafed by one man, who said that the figures
were merely intended to represent the nembo—the artificial
deformations of pelele, ear-discs, and keloids. The legend recorded
by Pater Adams places these figures in a new light. They must surely
be more than mere dolls; and we may even venture to assume that
they are—though the majority of present-day Makonde are probably
unaware of the fact—representations of the tribal ancestress.
 The references in the legend to the descent from Mahuta to the
Rovuma, and to a journey across the highlands into the Mbekuru
valley, undoubtedly indicate the previous history of the tribe, the
travels of the ancestral pair typifying the migrations of their
descendants. The descent to the neighbouring Rovuma valley, with
its extraordinary fertility and great abundance of game, is intelligible
at a glance—but the crossing of the Lukuledi depression, the ascent
to the Rondo Plateau and the descent to the Mbemkuru, also lie
within the bounds of probability, for all these districts have exactly
the same character as the extreme south. Now, however, comes a
point of especial interest for our bacteriological age. The primitive
Makonde did not enjoy their lives in the marshy river-valleys.
Disease raged among them, and many died. It was only after they
had returned to their original home near Mahuta, that the health
conditions of these people improved. We are very apt to think of the
African as a stupid person whose ignorance of nature is only equalled
by his fear of it, and who looks on all mishaps as caused by evil
spirits and malignant natural powers. It is much more correct to
assume in this case that the people very early learnt to distinguish
districts infested with malaria from those where it is absent.
This knowledge is crystallized in the
ancestral warning against settling in the
valleys and near the great waters, the
dwelling-places of disease and death. At the
same time, for security against the hostile
Mavia south of the Rovuma, it was enacted
that every settlement must be not less than a
certain distance from the southern edge of the
plateau. Such in fact is their mode of life at the
present day. It is not such a bad one, and
certainly they are both safer and more
comfortable than the Makua, the recent
intruders from the south, who have made USUAL METHOD OF
good their footing on the western edge of the CLOSING HUT-DOOR
plateau, extending over a fairly wide belt of
country. Neither Makua nor Makonde show in their dwellings
anything of the size and comeliness of the Yao houses in the plain,
especially at Masasi, Chingulungulu and Zuza’s. Jumbe Chauro, a
Makonde hamlet not far from Newala, on the road to Mahuta, is the
most important settlement of the tribe I have yet seen, and has fairly
spacious huts. But how slovenly is their construction compared with
the palatial residences of the elephant-hunters living in the plain.
The roofs are still more untidy than in the general run of huts during
the dry season, the walls show here and there the scanty beginnings
or the lamentable remains of the mud plastering, and the interior is a
veritable dog-kennel; dirt, dust and disorder everywhere. A few huts
only show any attempt at division into rooms, and this consists
merely of very roughly-made bamboo partitions. In one point alone
have I noticed any indication of progress—in the method of fastening
the door. Houses all over the south are secured in a simple but
ingenious manner. The door consists of a set of stout pieces of wood
or bamboo, tied with bark-string to two cross-pieces, and moving in
two grooves round one of the door-posts, so as to open inwards. If
the owner wishes to leave home, he takes two logs as thick as a man’s
upper arm and about a yard long. One of these is placed obliquely
against the middle of the door from the inside, so as to form an angle
of from 60° to 75° with the ground. He then places the second piece
horizontally across the first, pressing it downward with all his might.
It is kept in place by two strong posts planted in the ground a few
inches inside the door. This fastening is absolutely safe, but of course
cannot be applied to both doors at once, otherwise how could the
owner leave or enter his house? I have not yet succeeded in finding
out how the back door is fastened.

MAKONDE LOCK AND KEY AT JUMBE CHAURO

 This is the general way of closing a house. The Makonde at Jumbe
Chauro, however, have a much more complicated, solid and original
one. Here, too, the door is as already described, except that there is
only one post on the inside, standing by itself about six inches from
one side of the doorway. Opposite this post is a hole in the wall just
large enough to admit a man’s arm. The door is closed inside by a
large wooden bolt passing through a hole in this post and pressing
with its free end against the door. The other end has three holes into
which fit three pegs running in vertical grooves inside the post. The
door is opened with a wooden key about a foot long, somewhat
curved and sloped off at the butt; the other end has three pegs
corresponding to the holes, in the bolt, so that, when it is thrust
through the hole in the wall and inserted into the rectangular
opening in the post, the pegs can be lifted and the bolt drawn out.[50]

MODE OF INSERTING THE KEY

With no small pride first one householder and then a second

showed me on the spot the action of this greatest invention of the
Makonde Highlands. To both with an admiring exclamation of
“Vizuri sana!” (“Very fine!”). I expressed the wish to take back these
marvels with me to Ulaya, to show the Wazungu what clever fellows
the Makonde are. Scarcely five minutes after my return to camp at
Newala, the two men came up sweating under the weight of two
heavy logs which they laid down at my feet, handing over at the same
time the keys of the fallen fortress. Arguing, logically enough, that if
the key was wanted, the lock would be wanted with it, they had taken
their axes and chopped down the posts—as it never occurred to them
to dig them out of the ground and so bring them intact. Thus I have
two badly damaged specimens, and the owners, instead of praise,
come in for a blowing-up.
The Makua huts in the environs of Newala are especially
miserable; their more than slovenly construction reminds one of the
temporary erections of the Makua at Hatia’s, though the people here
have not been concerned in a war. It must therefore be due to
congenital idleness, or else to the absence of a powerful chief. Even
the baraza at Mlipa’s, a short hour’s walk south-east of Newala,
shares in this general neglect. While public buildings in this country
are usually looked after more or less carefully, this is in evident
danger of being blown over by the first strong easterly gale. The only
attractive object in this whole district is the grave of the late chief
Mlipa. I visited it in the morning, while the sun was still trying with
partial success to break through the rolling mists, and the circular
grove of tall euphorbias, which, with a broken pot, is all that marks
the old king’s resting-place, impressed one with a touch of pathos.
Even my very materially-minded carriers seemed to feel something
of the sort, for instead of their usual ribald songs, they chanted
solemnly, as we marched on through the dense green of the Makonde
bush:—
 “We shall arrive with the great master; we stand in a row and have
no fear about getting our food and our money from the Serkali (the
Government). We are not afraid; we are going along with the great
master, the lion; we are going down to the coast and back.”
With regard to the characteristic features of the various tribes here
on the western edge of the plateau, I can arrive at no other
conclusion than the one already come to in the plain, viz., that it is
impossible for anyone but a trained anthropologist to assign any
given individual at once to his proper tribe. In fact, I think that even
an anthropological specialist, after the most careful examination,
might find it a difficult task to decide. The whole congeries of peoples
collected in the region bounded on the west by the great Central
African rift, Tanganyika and Nyasa, and on the east by the Indian
Ocean, are closely related to each other—some of their languages are
only distinguished from one another as dialects of the same speech,
and no doubt all the tribes present the same shape of skull and
structure of skeleton. Thus, surely, there can be no very striking
differences in outward appearance.
 Even did such exist, I should have no time
to concern myself with them, for day after day,
I have to see or hear, as the case may be—in
any case to grasp and record—an
extraordinary number of ethnographic
phenomena. I am almost disposed to think it
fortunate that some departments of inquiry, at
least, are barred by external circumstances.
Chief among these is the subject of iron-
working. We are apt to think of Africa as a
country where iron ore is everywhere, so to
speak, to be picked up by the roadside, and
where it would be quite surprising if the
inhabitants had not learnt to smelt the
material ready to their hand. In fact, the
knowledge of this art ranges all over the
continent, from the Kabyles in the north to the
Kafirs in the south. Here between the Rovuma
and the Lukuledi the conditions are not so
favourable. According to the statements of the
Makonde, neither ironstone nor any other
form of iron ore is known to them. They have
not therefore advanced to the art of smelting
the metal, but have hitherto bought all their
THE ANCESTRESS OF
THE MAKONDE
iron implements from neighbouring tribes.
Even in the plain the inhabitants are not much
better off. Only one man now living is said to
understand the art of smelting iron. This old fundi lives close to
Huwe, that isolated, steep-sided block of granite which rises out of
the green solitude between Masasi and Chingulungulu, and whose
jagged and splintered top meets the traveller’s eye everywhere. While
still at Masasi I wished to see this man at work, but was told that,
frightened by the rising, he had retired across the Rovuma, though
he would soon return. All subsequent inquiries as to whether the
fundi had come back met with the genuine African answer, “Bado”
(“Not yet”).
 BRAZIER

Some consolation was afforded me by a brassfounder, whom I

came across in the bush near Akundonde’s. This man is the favourite
of women, and therefore no doubt of the gods; he welds the glittering
brass rods purchased at the coast into those massive, heavy rings
which, on the wrists and ankles of the local fair ones, continually give
me fresh food for admiration. Like every decent master-craftsman he
had all his tools with him, consisting of a pair of bellows, three
crucibles and a hammer—nothing more, apparently. He was quite
willing to show his skill, and in a twinkling had fixed his bellows on
the ground. They are simply two goat-skins, taken off whole, the four
legs being closed by knots, while the upper opening, intended to
admit the air, is kept stretched by two pieces of wood. At the lower
end of the skin a smaller opening is left into which a wooden tube is
stuck. The fundi has quickly borrowed a heap of wood-embers from
the nearest hut; he then fixes the free ends of the two tubes into an
earthen pipe, and clamps them to the ground by means of a bent
piece of wood. Now he fills one of his small clay crucibles, the dross
on which shows that they have been long in use, with the yellow
material, places it in the midst of the embers, which, at present are
only faintly glimmering, and begins his work. In quick alternation
the smith’s two hands move up and down with the open ends of the
bellows; as he raises his hand he holds the slit wide open, so as to let
the air enter the skin bag unhindered. In pressing it down he closes
the bag, and the air puffs through the bamboo tube and clay pipe into
the fire, which quickly burns up. The smith, however, does not keep
on with this work, but beckons to another man, who relieves him at
the bellows, while he takes some more tools out of a large skin pouch
carried on his back. I look on in wonder as, with a smooth round
stick about the thickness of a finger, he bores a few vertical holes into
the clean sand of the soil. This should not be difficult, yet the man
seems to be taking great pains over it. Then he fastens down to the
ground, with a couple of wooden clamps, a neat little trough made by
splitting a joint of bamboo in half, so that the ends are closed by the
two knots. At last the yellow metal has attained the right consistency,
and the fundi lifts the crucible from the fire by means of two sticks
split at the end to serve as tongs. A short swift turn to the left—a
tilting of the crucible—and the molten brass, hissing and giving forth
clouds of smoke, flows first into the bamboo mould and then into the
holes in the ground.
The technique of this backwoods craftsman may not be very far
advanced, but it cannot be denied that he knows how to obtain an
adequate result by the simplest means. The ladies of highest rank in
this country—that is to say, those who can afford it, wear two kinds
of these massive brass rings, one cylindrical, the other semicircular
in section. The latter are cast in the most ingenious way in the
bamboo mould, the former in the circular hole in the sand. It is quite
a simple matter for the fundi to fit these bars to the limbs of his fair
customers; with a few light strokes of his hammer he bends the
pliable brass round arm or ankle without further inconvenience to
the wearer.
SHAPING THE POT

SMOOTHING WITH MAIZE-COB

CUTTING THE EDGE

 FINISHING THE BOTTOM

LAST SMOOTHING BEFORE

BURNING

FIRING THE BRUSH-PILE

 LIGHTING THE FARTHER SIDE OF
THE PILE

TURNING THE RED-HOT VESSEL

NYASA WOMAN MAKING POTS AT MASASI

Pottery is an art which must always and everywhere excite the
interest of the student, just because it is so intimately connected with
the development of human culture, and because its relics are one of
the principal factors in the reconstruction of our own condition in
prehistoric times. I shall always remember with pleasure the two or
three afternoons at Masasi when Salim Matola’s mother, a slightly-
built, graceful, pleasant-looking woman, explained to me with
touching patience, by means of concrete illustrations, the ceramic art
of her people. The only implements for this primitive process were a
lump of clay in her left hand, and in the right a calabash containing
the following valuables: the fragment of a maize-cob stripped of all
its grains, a smooth, oval pebble, about the size of a pigeon’s egg, a
few chips of gourd-shell, a bamboo splinter about the length of one’s
hand, a small shell, and a bunch of some herb resembling spinach.
 Nothing more. The woman scraped with the
shell a round, shallow hole in the soft, fine
sand of the soil, and, when an active young
girl had filled the calabash with water for her,
she began to knead the clay. As if by magic it
gradually assumed the shape of a rough but
already well-shaped vessel, which only wanted
a little touching up with the instruments
before mentioned. I looked out with the
MAKUA WOMAN closest attention for any indication of the use
MAKING A POT. of the potter’s wheel, in however rudimentary
SHOWS THE a form, but no—hapana (there is none). The
BEGINNINGS OF THE embryo pot stood firmly in its little
POTTER’S WHEEL
depression, and the woman walked round it in
a stooping posture, whether she was removing
small stones or similar foreign bodies with the maize-cob, smoothing
the inner or outer surface with the splinter of bamboo, or later, after
letting it dry for a day, pricking in the ornamentation with a pointed
bit of gourd-shell, or working out the bottom, or cutting the edge
with a sharp bamboo knife, or giving the last touches to the finished
vessel. This occupation of the women is infinitely toilsome, but it is
without doubt an accurate reproduction of the process in use among
our ancestors of the Neolithic and Bronze ages.
There is no doubt that the invention of pottery, an item in human
progress whose importance cannot be over-estimated, is due to
women. Rough, coarse and unfeeling, the men of the horde range
over the countryside. When the united cunning of the hunters has
succeeded in killing the game; not one of them thinks of carrying
home the spoil. A bright fire, kindled by a vigorous wielding of the
drill, is crackling beside them; the animal has been cleaned and cut
up secundum artem, and, after a slight singeing, will soon disappear
under their sharp teeth; no one all this time giving a single thought
to wife or child.
To what shifts, on the other hand, the primitive wife, and still more
the primitive mother, was put! Not even prehistoric stomachs could
endure an unvarying diet of raw food. Something or other suggested
the beneficial effect of hot water on the majority of approved but
indigestible dishes. Perhaps a neighbour had tried holding the hard
roots or tubers over the fire in a calabash filled with water—or maybe
an ostrich-egg-shell, or a hastily improvised vessel of bark. They
became much softer and more palatable than they had previously
been; but, unfortunately, the vessel could not stand the fire and got
charred on the outside. That can be remedied, thought our
ancestress, and plastered a layer of wet clay round a similar vessel.
This is an improvement; the cooking utensil remains uninjured, but
the heat of the fire has shrunk it, so that it is loose in its shell. The
next step is to detach it, so, with a firm grip and a jerk, shell and
kernel are separated, and pottery is invented. Perhaps, however, the
discovery which led to an intelligent use of the burnt-clay shell, was
made in a slightly different way. Ostrich-eggs and calabashes are not
to be found in every part of the world, but everywhere mankind has
arrived at the art of making baskets out of pliant materials, such as
bark, bast, strips of palm-leaf, supple twigs, etc. Our inventor has no
water-tight vessel provided by nature. “Never mind, let us line the
basket with clay.” This answers the purpose, but alas! the basket gets
burnt over the blazing fire, the woman watches the process of
cooking with increasing uneasiness, fearing a leak, but no leak
appears. The food, done to a turn, is eaten with peculiar relish; and
the cooking-vessel is examined, half in curiosity, half in satisfaction
at the result. The plastic clay is now hard as stone, and at the same
time looks exceedingly well, for the neat plaiting of the burnt basket
is traced all over it in a pretty pattern. Thus, simultaneously with
pottery, its ornamentation was invented.
Primitive woman has another claim to respect. It was the man,
roving abroad, who invented the art of producing fire at will, but the
woman, unable to imitate him in this, has been a Vestal from the
earliest times. Nothing gives so much trouble as the keeping alight of
the smouldering brand, and, above all, when all the men are absent
from the camp. Heavy rain-clouds gather, already the first large
drops are falling, the first gusts of the storm rage over the plain. The
little flame, a greater anxiety to the woman than her own children,
flickers unsteadily in the blast. What is to be done? A sudden thought
occurs to her, and in an instant she has constructed a primitive hut
out of strips of bark, to protect the flame against rain and wind.
This, or something very like it, was the way in which the principle
of the house was discovered; and even the most hardened misogynist
cannot fairly refuse a woman the credit of it. The protection of the
hearth-fire from the weather is the germ from which the human
dwelling was evolved. Men had little, if any share, in this forward
step, and that only at a late stage. Even at the present day, the
plastering of the housewall with clay and the manufacture of pottery
are exclusively the women’s business. These are two very significant
survivals. Our European kitchen-garden, too, is originally a woman’s
invention, and the hoe, the primitive instrument of agriculture, is,
characteristically enough, still used in this department. But the
noblest achievement which we owe to the other sex is unquestionably
the art of cookery. Roasting alone—the oldest process—is one for
which men took the hint (a very obvious one) from nature. It must
have been suggested by the scorched carcase of some animal
overtaken by the destructive forest-fires. But boiling—the process of
improving organic substances by the help of water heated to boiling-
point—is a much later discovery. It is so recent that it has not even
yet penetrated to all parts of the world. The Polynesians understand
how to steam food, that is, to cook it, neatly wrapped in leaves, in a
hole in the earth between hot stones, the air being excluded, and
(sometimes) a few drops of water sprinkled on the stones; but they
do not understand boiling.
To come back from this digression, we find that the slender Nyasa
woman has, after once more carefully examining the finished pot,
put it aside in the shade to dry. On the following day she sends me
word by her son, Salim Matola, who is always on hand, that she is
going to do the burning, and, on coming out of my house, I find her
already hard at work. She has spread on the ground a layer of very
dry sticks, about as thick as one’s thumb, has laid the pot (now of a
yellowish-grey colour) on them, and is piling brushwood round it.
My faithful Pesa mbili, the mnyampara, who has been standing by,
most obligingly, with a lighted stick, now hands it to her. Both of
them, blowing steadily, light the pile on the lee side, and, when the
flame begins to catch, on the weather side also. Soon the whole is in a
blaze, but the dry fuel is quickly consumed and the fire dies down, so
that we see the red-hot vessel rising from the ashes. The woman
turns it continually with a long stick, sometimes one way and
sometimes another, so that it may be evenly heated all over. In
twenty minutes she rolls it out of the ash-heap, takes up the bundle
of spinach, which has been lying for two days in a jar of water, and
sprinkles the red-hot clay with it. The places where the drops fall are
marked by black spots on the uniform reddish-brown surface. With a
sigh of relief, and with visible satisfaction, the woman rises to an
erect position; she is standing just in a line between me and the fire,
from which a cloud of smoke is just rising: I press the ball of my
camera, the shutter clicks—the apotheosis is achieved! Like a
priestess, representative of her inventive sex, the graceful woman
stands: at her feet the hearth-fire she has given us beside her the
invention she has devised for us, in the background the home she has
built for us.
At Newala, also, I have had the manufacture of pottery carried on
in my presence. Technically the process is better than that already
described, for here we find the beginnings of the potter’s wheel,
which does not seem to exist in the plains; at least I have seen
nothing of the sort. The artist, a frightfully stupid Makua woman, did
not make a depression in the ground to receive the pot she was about
to shape, but used instead a large potsherd. Otherwise, she went to
work in much the same way as Salim’s mother, except that she saved
herself the trouble of walking round and round her work by squatting
at her ease and letting the pot and potsherd rotate round her; this is
surely the first step towards a machine. But it does not follow that
the pot was improved by the process. It is true that it was beautifully
rounded and presented a very creditable appearance when finished,
but the numerous large and small vessels which I have seen, and, in
part, collected, in the “less advanced” districts, are no less so. We
moderns imagine that instruments of precision are necessary to
produce excellent results. Go to the prehistoric collections of our
museums and look at the pots, urns and bowls of our ancestors in the
dim ages of the past, and you will at once perceive your error.
MAKING LONGITUDINAL CUT IN
BARK

DRAWING THE BARK OFF THE LOG

REMOVING THE OUTER BARK

 BEATING THE BARK

WORKING THE BARK-CLOTH AFTER BEATING, TO MAKE IT

SOFT

MANUFACTURE OF BARK-CLOTH AT NEWALA

To-day, nearly the whole population of German East Africa is
clothed in imported calico. This was not always the case; even now in
some parts of the north dressed skins are still the prevailing wear,
and in the north-western districts—east and north of Lake
Tanganyika—lies a zone where bark-cloth has not yet been
superseded. Probably not many generations have passed since such
bark fabrics and kilts of skins were the only clothing even in the
south. Even to-day, large quantities of this bright-red or drab
material are still to be found; but if we wish to see it, we must look in
the granaries and on the drying stages inside the native huts, where
it serves less ambitious uses as wrappings for those seeds and fruits
which require to be packed with special care. The salt produced at
Masasi, too, is packed for transport to a distance in large sheets of
bark-cloth. Wherever I found it in any degree possible, I studied the
process of making this cloth. The native requisitioned for the
purpose arrived, carrying a log between two and three yards long and
as thick as his thigh, and nothing else except a curiously-shaped
mallet and the usual long, sharp and pointed knife which all men and
boys wear in a belt at their backs without a sheath—horribile dictu!
[51]
Silently he squats down before me, and with two rapid cuts has
drawn a couple of circles round the log some two yards apart, and
slits the bark lengthwise between them with the point of his knife.
With evident care, he then scrapes off the outer rind all round the
log, so that in a quarter of an hour the inner red layer of the bark
shows up brightly-coloured between the two untouched ends. With
some trouble and much caution, he now loosens the bark at one end,
and opens the cylinder. He then stands up, takes hold of the free
edge with both hands, and turning it inside out, slowly but steadily
pulls it off in one piece. Now comes the troublesome work of
scraping all superfluous particles of outer bark from the outside of
the long, narrow piece of material, while the inner side is carefully
scrutinised for defective spots. At last it is ready for beating. Having
signalled to a friend, who immediately places a bowl of water beside
him, the artificer damps his sheet of bark all over, seizes his mallet,
lays one end of the stuff on the smoothest spot of the log, and
hammers away slowly but continuously. “Very simple!” I think to
myself. “Why, I could do that, too!”—but I am forced to change my
opinions a little later on; for the beating is quite an art, if the fabric is
not to be beaten to pieces. To prevent the breaking of the fibres, the
stuff is several times folded across, so as to interpose several
thicknesses between the mallet and the block. At last the required
state is reached, and the fundi seizes the sheet, still folded, by both
ends, and wrings it out, or calls an assistant to take one end while he
holds the other. The cloth produced in this way is not nearly so fine
and uniform in texture as the famous Uganda bark-cloth, but it is
quite soft, and, above all, cheap.
Now, too, I examine the mallet. My craftsman has been using the
simpler but better form of this implement, a conical block of some
hard wood, its base—the striking surface—being scored across and
across with more or less deeply-cut grooves, and the handle stuck
into a hole in the middle. The other and earlier form of mallet is
shaped in the same way, but the head is fastened by an ingenious
network of bark strips into the split bamboo serving as a handle. The
observation so often made, that ancient customs persist longest in
connection with religious ceremonies and in the life of children, here
finds confirmation. As we shall soon see, bark-cloth is still worn
during the unyago,[52] having been prepared with special solemn
ceremonies; and many a mother, if she has no other garment handy,
will still put her little one into a kilt of bark-cloth, which, after all,
looks better, besides being more in keeping with its African
surroundings, than the ridiculous bit of print from Ulaya.
MAKUA WOMEN