TEST BANK For Accounting Principles, 14th Edition by Jerry J. Weygandt, Paul D. Kimmel, Verified Chapters 1 - 27, Complete Newest Version

TESTBANK
Accounting Principles 14th Edition
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by Jerry J. Weygandt, Paul D. Kimmel
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bn Chapters 1 - 27, Complete
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,TABLE OF CONTENTS bn bn




1 Accounting in Action
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2 The Recording Process
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3 Adjusting the Accounts
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4 Completing the Accounting Cycle
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5 Accounting for Merchandising Operations
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6 Inventories
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7 Accounting Information Systems
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8 Fraud, Internal Control, and Cash
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9 Accounting for Receivables
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10 Plant Assets, Natural Resources, and Intangible Assets
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11 Current Liabilities and Payroll Accounting
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12 Accounting for Partnerships
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13 Corporations: Organization and Capital Stock
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Transactions
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14 Corporations: Dividends, Retained Earnings, and
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,bn Income Reporting
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15 Long-Term Liabilities
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16 Investments
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17 Statement of Cash Flows
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18 Financial Analysis: The Big Picture
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19 Managerial Accounting
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20 Job Order Costing
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21 Process Costing
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22 Cost-Volume-Profit
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23 Incremental Analysis
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24 Budgetary Planning
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25 Budgetary Control and Responsibility Accounting
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26 Standard Costs and Balanced Scorecard
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27 Planning for Capital Investments
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, CHAPTER 1 b n




ACCOUNTING IN ACTION bn bn




CHAPTER LEARNING OBJECTIVES bn bn




1. Identify the activities and users associated with accounting. Accounting is an information
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system that identifies, records, and communicates the economic events of an organization to
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interested users. The major users and uses of accounting are as follows: (a) Management
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uses accounting information to plan, organize, and run the business. (b) Investors (owners)
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decide whether to buy, hold, or sell their financial interests on the basis of accounting data.
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(c) Creditors (suppliers and bankers) evaluate the risks of granting credit or lending money
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b non the basis of accounting information. Other groups that use accounting information are
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taxing authorities, regulatory agencies, customers, and labor unions.
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2. Explain the building blocks of accounting: ethics, principles, and assumptions. Ethics are the
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standards of conduct by which actions are judged as right or wrong. Effective financial
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reporting depends on sound ethical behavior.
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Generally accepted accounting principles are a common set of standards used by accountants.
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The primary accounting standard-setting body in the United States is the Financial Accounting
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Standards Board.
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3. State the accounting equation, and define its components. The basic
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is:
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Assets = Liabilities + Owner's Equity
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Assets are resources a business owns. Liabilities are creditorship
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assets.Owner's equity is the ownership claim on total assets.
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The expanded accounting equation is:
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Assets bn bn Liabilities + Owner's Capital bn bn bn bn bn Owner's Drawings + Revenues bn bn bn bn


Expenses
Investments by owners (assets the owner puts into the business) are recorded in a category
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called owner‘s capital. Owner‘s drawings are the withdrawal of assets by the owner for
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personal use. Revenues are the gross increase in owner‘s equity from business activities for
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the purpose of earning income. Expenses are the costs of assets consumed or services used
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in the process of earning revenue. Owner‘s equity is increased by an owner‘s
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bninvestments and by revenues from business operations. Owner‘s equity is decreased by an
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owner‘s withdrawals of assets and by expenses.
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4. Analyze the effects of business transactions on the accounting equation. Each
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business transaction must have a dual effect on the accounting equation. For example, if an
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individual asset increases, there must be a corresponding (1) decrease in another asset, or
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(2) increase in a specific liability, or (3) increase in owner's equity.
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5. Describe the four financial statements and how they are prepared. An income statement
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presents the revenues and expenses, and resulting net income or net loss for a specific
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period of time. An owner's equity statement summarizes the changes in owner's equity for a
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specific period of time. A balance sheet reports the assets, liabilities, and owner's equity at a
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