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
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete

,TABLE OF CONTENTS qx qx




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 Transaction
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s

14 Corporations: Dividends, Retained Earnings, and Income
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,Reporting

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 q x




ACCOUNTING IN ACTION qx qx




CHAPTER LEARNING OBJECTIVES qx qx




1. Identify the activities and users associated with accounting. Accounting is an information system
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that identifies, records, and communicates the economic events of an organization to interested
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users. The major users and uses of accounting are as follows: (a) Management uses accounting inf
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ormation to plan, organize, and run the business. (b) Investors (owners) decide whether to buy, h
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old, or sell their financial interests on the basis of accounting data. (c)Creditors (suppliers and ban
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kers) evaluate the risks of granting credit or lending money on the basis of accounting informat
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ion. Other groups that use accounting information are taxing authorities, regulatory agencies, cust
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omers, and labor unions. qx qx qx



2. Explain the building blocks of accounting: ethics, principles, and assumptions. Ethics are the stan
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dards of conduct by which actions are judged as right or wrong. Effective financial reporting depe
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nds on sound ethical behavior.
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Generally accepted accounting principles are a common set of standards used by accountants. Th
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e primary accounting standard-
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setting body in the United States is the Financial Accounting Standards Board.
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3. State the accounting equation, and define its components. The basic accounting equation is:
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Assets = Liabilities + Owner's Equity
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Assets are resources a business owns. Liabilities are creditorship claims on total assets.Ow
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ner's equity is the ownership claim on total assets.
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The expanded accounting equation is:
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Assets qx Liabilities + Owner's Capital
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Expenses
Investments by owners (assets the owner puts into the business) are recorded in a category calle
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d owner‘s capital. Owner‘s drawings are the withdrawal of assets by the owner for personal use.
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Revenues are the gross increase in owner‘s equity from business activities for the purpose of earn
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ing income. Expenses are the costs of assets consumed or services used in the process of earni
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ng revenue. Owner‘s equity is increased by an owner‘s investmentsand by revenues from b
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usiness operations. Owner‘s equity is decreased by an owner‘s withdrawals of assets and by expe
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nses.
4. Analyze the effects of business transactions on the accounting equation. Each businesstransactio
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n must have a dual effect on the accounting equation. For example, if an individual asset increase
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s, there must be a corresponding (1) decrease in another asset, or (2) increase in a specific liabilit
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y, 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 present
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s the revenues and expenses, and resulting net income or net loss for a specific period of time.
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An owner's equity statement summarizes the changes in owner's equity for a specific period of ti
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me. A balance sheet reports the assets, liabilities, and owner's equity at a specific date. A statem
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ent of cash flows summarizes information about the cash inflows (receipts) and outflows (paymen
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