TESTBANK
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel Chapters 1 - 27, Complete
,TABLE OF CONTENTS
1 Accounting in Action
2 The Recording Process
3 Adjusting the Accounts
4 Completing the Accounting Cycle
5 Accounting for Merchandising Operations
6 Inventories
7 Accounting Information Systems
8 Fraud, Internal Control, and Cash
9 Accounting for Receivables
10 Plant Assets, Natural Resources, and Intangible Assets
11 Current Liabilities and Payroll Accounting
12 Accounting for Partnerships
13 Corporations: Organization and Capital Stock Transactions
14 Corporations: Dividends, Retained Earnings, and Income Reporting
15 Long-Term Liabilities
16 Investments
17 Statement of Cash Flows
18 Financial Analysis: The Big Picture
19 Managerial Accounting
,20 Job Order Costing
21 Process Costing
22 Cost-Volume-Profit
23 Incremental Analysis
24 Budgetary Planning
25 Budgetary Control and Responsibility Accounting
26 Standard Costs and Balanced Scorecard
27 Planning for Capital Investments
, CHAPTER 1
ACCOUNTING IN ACTION
CHAPTER LEARNING OBJECTIVES
1. Identify the activities and users associated with accounting. Accounting is an
information system that identifies, records, and communicates the economic
events of an organization to interested users. The major users and uses of
accounting are as follows: (a) Management uses accounting information to plan,
organize, and run the business. (b) Investors (owners) decide whether to buy,
hold, or sell their financial interests on the basis of accounting data. (c) Creditors
(suppliers and bankers) evaluate the risks of granting credit or lending money
on the basis of accounting information. Other groups that use accounting
information are taxing authorities, regulatory agencies, customers, and labor
unions.
2. Explain the building blocks of accounting: ethics, principles, and assumptions.
Ethics are the standards of conduct by which actions are judged as right or
wrong. Effective financial reporting depends on sound ethical behavior.
Generally accepted accounting principles are a common set of standards used
by accountants. The primary accounting standard-setting body in the United
States is the Financial Accounting Standards Board.
3. State the accounting equation, and define its components. The basic
accounting equation is:
Assets = Liabilities + Owner's Equity
Assets are resources a business owns. Liabilities are creditorship claims on total
assets. Owner's equity is the ownership claim on total assets.
The expanded accounting equation is:
Assets Liabilities + Owner's Capital Owner's Drawings + Revenues
Expenses
Investments by owners (assets the owner puts into the business) are recorded
in a category called owner‘s capital. Owner‘s drawings are the withdrawal of
assets by the owner for personal use. Revenues are the gross increase in
owner‘s equity from business activities for the purpose of earning income.
Expenses are the costs of assets consumed or services used in the process of
earning revenue. Owner‘s equity is increased by an owner‘s investments and
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel Chapters 1 - 27, Complete
,TABLE OF CONTENTS
1 Accounting in Action
2 The Recording Process
3 Adjusting the Accounts
4 Completing the Accounting Cycle
5 Accounting for Merchandising Operations
6 Inventories
7 Accounting Information Systems
8 Fraud, Internal Control, and Cash
9 Accounting for Receivables
10 Plant Assets, Natural Resources, and Intangible Assets
11 Current Liabilities and Payroll Accounting
12 Accounting for Partnerships
13 Corporations: Organization and Capital Stock Transactions
14 Corporations: Dividends, Retained Earnings, and Income Reporting
15 Long-Term Liabilities
16 Investments
17 Statement of Cash Flows
18 Financial Analysis: The Big Picture
19 Managerial Accounting
,20 Job Order Costing
21 Process Costing
22 Cost-Volume-Profit
23 Incremental Analysis
24 Budgetary Planning
25 Budgetary Control and Responsibility Accounting
26 Standard Costs and Balanced Scorecard
27 Planning for Capital Investments
, CHAPTER 1
ACCOUNTING IN ACTION
CHAPTER LEARNING OBJECTIVES
1. Identify the activities and users associated with accounting. Accounting is an
information system that identifies, records, and communicates the economic
events of an organization to interested users. The major users and uses of
accounting are as follows: (a) Management uses accounting information to plan,
organize, and run the business. (b) Investors (owners) decide whether to buy,
hold, or sell their financial interests on the basis of accounting data. (c) Creditors
(suppliers and bankers) evaluate the risks of granting credit or lending money
on the basis of accounting information. Other groups that use accounting
information are taxing authorities, regulatory agencies, customers, and labor
unions.
2. Explain the building blocks of accounting: ethics, principles, and assumptions.
Ethics are the standards of conduct by which actions are judged as right or
wrong. Effective financial reporting depends on sound ethical behavior.
Generally accepted accounting principles are a common set of standards used
by accountants. The primary accounting standard-setting body in the United
States is the Financial Accounting Standards Board.
3. State the accounting equation, and define its components. The basic
accounting equation is:
Assets = Liabilities + Owner's Equity
Assets are resources a business owns. Liabilities are creditorship claims on total
assets. Owner's equity is the ownership claim on total assets.
The expanded accounting equation is:
Assets Liabilities + Owner's Capital Owner's Drawings + Revenues
Expenses
Investments by owners (assets the owner puts into the business) are recorded
in a category called owner‘s capital. Owner‘s drawings are the withdrawal of
assets by the owner for personal use. Revenues are the gross increase in
owner‘s equity from business activities for the purpose of earning income.
Expenses are the costs of assets consumed or services used in the process of
earning revenue. Owner‘s equity is increased by an owner‘s investments and
