TESTBANK
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete
,TABLE OF CONTENTSp p
1 Accounting in Action
p p p p
2 The Recording Process
p p p p
3 Adjusting the Accounts
p p p
4 Completing the Accounting Cycle
p p p p
5 Accounting for Merchandising Operations
p p p p
6 Inventories
p p
7 Accounting Information Systems
p p p p
8 Fraud, Internal Control, and Cash
p p p p p p
9 Accounting for Receivables
p p p p
10 Plant Assets, Natural Resources, and Intangible Assets
p p p p p p p
11 Current Liabilities and Payroll Accounting
p p p p p
12 Accounting for Partnerships
p p p
13 Corporations: Organization and Capital Stock Transactions
p p p p p p
14 Corporations: Dividends, Retained Earnings, and Income R
p p p p p p p
eporting
,15 Long-Term Liabilities
p p
16 Investments
p
17 Statement of Cash Flows
p p p p
18 Financial Analysis: The Big Picture
p p p p p p
19 Managerial Accounting
p p p
20 Job Order Costing
p p p p
21 Process Costing
p p p
22 Cost-Volume-Profit
p p
23 Incremental Analysis
p p p
24 Budgetary Planning
p p
25 Budgetary Control and Responsibility Accounting
p p p p p p
26 Standard Costs and Balanced Scorecard
p p p p p p
27 Planning for Capital Investments
p p p p p
, CHAPTER 1 p
ACCOUNTING IN ACTION p p
CHAPTERpLEARNINGpOBJECTIVES
1. Identifypthepactivitiespandpuserspassociatedpwithpaccounting.pAccountingpispanpinformationpsystempt
hatpidentifies,precords,pandpcommunicatespthepeconomicpeventspofpanporganizationptopinterestedpuser
s.pThepmajorpuserspandpusespofpaccountingparepaspfollows:p(a)pManagementpusespaccountingpinformat
ionptopplan,porganize,pandprunpthepbusiness.p(b)pInvestorsp(owners)pdecidepwhetherptopbuy,phold,porps
ellptheirpfinancialpinterestsponpthepbasispofpaccountingpdata.p(c)pCreditorsp(supplierspandpbankers)peval
uatepthepriskspofpgrantingpcreditporplendingp moneyp onpthepbasispofpaccountingpinformation.pOtherpgr
oupspthatpusepaccountingpinformationpareptaxingpauthorities,pregulatorypagencies,pcustomers,pandplab
orpunions.
2. Explainpthepbuildingpblockspofpaccounting:pethics,pprinciples,pandpassumptions.pEthicsparepthepstanda
rdspofpconductpbypwhichpactionsparepjudgedpasprightporpwrong.pEffectivepfinancialpreportingpdependsp
onpsoundpethicalpbehavior.
Generallypacceptedpaccountingpprinciplesparepapcommonpsetpofpstandardspusedpbypaccountants.pThep
primarypaccountingpstandard-
settingpbodypinpthepUnitedpStatespispthepFinancialpAccountingpStandardspBoard.
3. Statepthepaccountingpequation,pandpdefinepitspcomponents.pThepbasicp accountingpequationpis:
Assetsp=pLiabilitiesp+pOwner'spEquity
Assetsp arep resourcesp ap businessp owns.p Liabilitiesp arep creditorshipp claimsp onp totalp assets.pOwner'speq
uitypispthepownershippclaimponptotalpassets.
Thepexpandedpaccountingpequationpis:
Assetsp pLiabilitiesp+pOwner'spCapitalp pOwner'spDrawingsp+pRevenuesp
Expenses
Investmentspbypownersp(assetspthepownerpputspintopthepbusiness)pareprecordedpinpapcategorypcalledpo
wner‘spcapital.pOwner‘spdrawingsparepthepwithdrawalpofpassetspbypthepownerpforppersonalpuse.pReven
uesparepthepgrosspincreasepinpowner‘spequitypfrompbusinesspactivitiespforptheppurposepofpearningpinco
me.pExpensesparepthepcostspofpassetspconsumedporpservicespusedpinp thep processp ofp earningp revenue
.p Owner‘sp equityp isp increasedp byp anp owner‘sp investmentspandpbyprevenuespfrompbusinesspoperation
s.pOwner‘spequitypispdecreasedpbypanpowner‘spwithdrawalspofpassetspandpbypexpenses.
4. Analyzepthepeffectspofpbusinessptransactionsponpthepaccountingpequation.pEachpbusinessptransactionp
mustphavepapdualpeffectponpthepaccountingpequation.pForpexample,pifpanpindividualpassetpincreases,pth
erepmustpbepapcorrespondingp(1)pdecreasepinpanotherpasset,porp(2)pincreasepinpapspecificpliability,porp(
3)pincreasepinpowner'spequity.
5. Describepthepfourpfinancialpstatementspandphowptheyparepprepared.pAnpincomepstatementppresentsp
theprevenuespandpexpenses,pandpresultingpnetpincomeporpnetp losspforpap specificpperiodpofptime.pAnpo
wner'spequitypstatementpsummarizespthepchangespinpowner'spequitypforpapspecificpperiodpofptime.pApb
alancepsheetpreportspthepassets,pliabilities,pandpowner'spequitypatpapspecificpdate.pApstatementpofpcash
pflowspsummarizespinformationpaboutpthepcashpinflowsp(receipts)pandpoutflowsp(payments)pforpap spec
ificpperiodpofptime.
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete
,TABLE OF CONTENTSp p
1 Accounting in Action
p p p p
2 The Recording Process
p p p p
3 Adjusting the Accounts
p p p
4 Completing the Accounting Cycle
p p p p
5 Accounting for Merchandising Operations
p p p p
6 Inventories
p p
7 Accounting Information Systems
p p p p
8 Fraud, Internal Control, and Cash
p p p p p p
9 Accounting for Receivables
p p p p
10 Plant Assets, Natural Resources, and Intangible Assets
p p p p p p p
11 Current Liabilities and Payroll Accounting
p p p p p
12 Accounting for Partnerships
p p p
13 Corporations: Organization and Capital Stock Transactions
p p p p p p
14 Corporations: Dividends, Retained Earnings, and Income R
p p p p p p p
eporting
,15 Long-Term Liabilities
p p
16 Investments
p
17 Statement of Cash Flows
p p p p
18 Financial Analysis: The Big Picture
p p p p p p
19 Managerial Accounting
p p p
20 Job Order Costing
p p p p
21 Process Costing
p p p
22 Cost-Volume-Profit
p p
23 Incremental Analysis
p p p
24 Budgetary Planning
p p
25 Budgetary Control and Responsibility Accounting
p p p p p p
26 Standard Costs and Balanced Scorecard
p p p p p p
27 Planning for Capital Investments
p p p p p
, CHAPTER 1 p
ACCOUNTING IN ACTION p p
CHAPTERpLEARNINGpOBJECTIVES
1. Identifypthepactivitiespandpuserspassociatedpwithpaccounting.pAccountingpispanpinformationpsystempt
hatpidentifies,precords,pandpcommunicatespthepeconomicpeventspofpanporganizationptopinterestedpuser
s.pThepmajorpuserspandpusespofpaccountingparepaspfollows:p(a)pManagementpusespaccountingpinformat
ionptopplan,porganize,pandprunpthepbusiness.p(b)pInvestorsp(owners)pdecidepwhetherptopbuy,phold,porps
ellptheirpfinancialpinterestsponpthepbasispofpaccountingpdata.p(c)pCreditorsp(supplierspandpbankers)peval
uatepthepriskspofpgrantingpcreditporplendingp moneyp onpthepbasispofpaccountingpinformation.pOtherpgr
oupspthatpusepaccountingpinformationpareptaxingpauthorities,pregulatorypagencies,pcustomers,pandplab
orpunions.
2. Explainpthepbuildingpblockspofpaccounting:pethics,pprinciples,pandpassumptions.pEthicsparepthepstanda
rdspofpconductpbypwhichpactionsparepjudgedpasprightporpwrong.pEffectivepfinancialpreportingpdependsp
onpsoundpethicalpbehavior.
Generallypacceptedpaccountingpprinciplesparepapcommonpsetpofpstandardspusedpbypaccountants.pThep
primarypaccountingpstandard-
settingpbodypinpthepUnitedpStatespispthepFinancialpAccountingpStandardspBoard.
3. Statepthepaccountingpequation,pandpdefinepitspcomponents.pThepbasicp accountingpequationpis:
Assetsp=pLiabilitiesp+pOwner'spEquity
Assetsp arep resourcesp ap businessp owns.p Liabilitiesp arep creditorshipp claimsp onp totalp assets.pOwner'speq
uitypispthepownershippclaimponptotalpassets.
Thepexpandedpaccountingpequationpis:
Assetsp pLiabilitiesp+pOwner'spCapitalp pOwner'spDrawingsp+pRevenuesp
Expenses
Investmentspbypownersp(assetspthepownerpputspintopthepbusiness)pareprecordedpinpapcategorypcalledpo
wner‘spcapital.pOwner‘spdrawingsparepthepwithdrawalpofpassetspbypthepownerpforppersonalpuse.pReven
uesparepthepgrosspincreasepinpowner‘spequitypfrompbusinesspactivitiespforptheppurposepofpearningpinco
me.pExpensesparepthepcostspofpassetspconsumedporpservicespusedpinp thep processp ofp earningp revenue
.p Owner‘sp equityp isp increasedp byp anp owner‘sp investmentspandpbyprevenuespfrompbusinesspoperation
s.pOwner‘spequitypispdecreasedpbypanpowner‘spwithdrawalspofpassetspandpbypexpenses.
4. Analyzepthepeffectspofpbusinessptransactionsponpthepaccountingpequation.pEachpbusinessptransactionp
mustphavepapdualpeffectponpthepaccountingpequation.pForpexample,pifpanpindividualpassetpincreases,pth
erepmustpbepapcorrespondingp(1)pdecreasepinpanotherpasset,porp(2)pincreasepinpapspecificpliability,porp(
3)pincreasepinpowner'spequity.
5. Describepthepfourpfinancialpstatementspandphowptheyparepprepared.pAnpincomepstatementppresentsp
theprevenuespandpexpenses,pandpresultingpnetpincomeporpnetp losspforpap specificpperiodpofptime.pAnpo
wner'spequitypstatementpsummarizespthepchangespinpowner'spequitypforpapspecificpperiodpofptime.pApb
alancepsheetpreportspthepassets,pliabilities,pandpowner'spequitypatpapspecificpdate.pApstatementpofpcash
pflowspsummarizespinformationpaboutpthepcashpinflowsp(receipts)pandpoutflowsp(payments)pforpap spec
ificpperiodpofptime.
