Test bank for accounting principles 14th edition by jerry j weygandt paul d kimmel

TESTBANK
Accounting Principles 14th Edition
n n n




by Jerry J. Weygandt, Paul D. Kimmel Chapters
n n n n n n n




n 1 - 27, Complete
n n n

,TABLE OF CONTENTS n n




1 Accounting in Action
n n n n




2 The Recording Process
n n n n




3 Adjusting the Accounts
n n n




4 Completing the Accounting Cycle
n n n n




5 Accounting for Merchandising Operations
n n n n




6 Inventories
n n




7 Accounting Information Systems
n n n n




8 Fraud, Internal Control, and Cash
n n n n n n




9 Accounting for Receivables
n n n n




10 Plant Assets, Natural Resources, and Intangible Assets
n n n n n n n




11 Current Liabilities and Payroll Accounting
n n n n n




12 Accounting for Partnerships
n n n




13 Corporations: Organization and Capital Stock Transactions
n n n n n n




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




Reporting
n

,15 Long-Term Liabilities
n n




16 Investments
n




17 Statement of Cash Flows
n n n n




18 Financial Analysis: The Big Picture
n n n n n n




19 Managerial Accounting
n n n




20 Job Order Costing
n n n n




21 Process Costing
n n n




22 Cost-Volume-Profit
n n




23 Incremental Analysis
n n n




24 Budgetary Planning
n n




25 Budgetary Control and Responsibility Accounting
n n n n n n




26 Standard Costs and Balanced Scorecard
n n n n n n




27 Planning for Capital Investments
n n n n n

, CHAPTER 1 n




ACCOUNTING IN ACTION n n




CHAPTER LEARNING OBJECTIVES n n




1. Identify the activities and users associated with accounting. Accounting is an information system that
n n n n n n n n n n n n n




identifies, records, and communicates the economic events of an organization to interested users. The
n n n n n n n n n n n n n n




major users and uses of accounting are as follows: (a) Management uses accounting information to plan,
n n n n n n n n n n n n n n n n




organize, and run the business. (b) Investors (owners) decide whether to buy, hold, or sell their financial
n n n n n n n n n n n n n n n n n




interests on the basis of accounting data. (c) Creditors (suppliers and bankers) evaluate the risks of
n n n n n n n n n n n n n n n n




granting credit or lending money on the basis of accounting information. Other groups that use
n n n n n n n n n n n n n n n




accounting information are taxing authorities, regulatory agencies, customers, and labor unions.
n n n n n n n n n n n




2. Explain the building blocks of accounting: ethics, principles, and assumptions. Ethics are the standards
n n n n n n n n n n n n n




of conduct by which actions are judged as right or wrong. Effective financial reporting depends on sound
n n n n n n n n n n n n n n n n n




ethical behavior.
n n




Generally accepted accounting principles are a common set of standards used by accountants. The
n n n n n n n n n n n n n




primary accounting standard-setting body in the United States is the Financial Accounting Standards
n n n n n n n n n n n n n




Board.
n




3. State the accounting equation, and define its components. The basic accounting equation is:
n n n n n n n n n n n n




Assets = Liabilities + Owner's Equity n n n n n




Assets are resources a business owns. Liabilities are creditorship claims on total assets.Owner's
n n n n n n n n n n n n n




equity is the ownership claim on total assets.
n n n n n n n n




The expanded accounting equation is:
n n n n




Assets Liabilities + Owner's Capital Owner's Drawings + Revenues
n n n n n n n n n n n




Expenses
Investments by owners (assets the owner puts into the business) are recorded in a category called
n n n n n n n n n n n n n n n




owner‘s capital. Owner‘s drawings are the withdrawal of assets by the owner for personal use. Revenues
n n n n n n n n n n n n n n n n




are the gross increase in owner‘s equity from business activities for the purpose of earning income.
n n n n n n n n n n n n n n n n




Expenses are the costs of assets consumed or services used in the process of earning revenue.
n n n n n n n n n n n n n n n n




nOwner‘s equity is increased by an owner‘s investments and by revenues from business operations.
n n n n n n n n n n n n n




Owner‘s equity is decreased by an owner‘s withdrawals of assets and by expenses.
n n n n n n n n n n n n n




4. Analyze the effects of business transactions on the accounting equation. Each businesstransaction must
n n n n n n n n n n n n n




have a dual effect on the accounting equation. For example, if an individual asset increases, there must
n n n n n n n n n n n n n n n n n




be a corresponding (1) decrease in another asset, or (2) increase in a specific liability, or (3) increase in
n n n n n n n n n n n n n n n n n n n




owner's equity.
n n




5. Describe the four financial statements and how they are prepared. An income statement presents the
n n n n n n n n n n n n n n




revenues and expenses, and resulting net income or net loss for a specific period of time. An owner's
n n n n n n n n n n n n n n n n n n




equity statement summarizes the changes in owner's equity for a specific period of time. A balance sheet
n n n n n n n n n n n n n n n n n




reports the assets, liabilities, and owner's equity at a specific date. A statement of cash flows summarizes
n n n n n n n n n n n n n n n n n




information about the cash inflows (receipts) and outflows (payments) for a specific period of time.
n n n n n n n n n n n n n n n