Test Bank for Accounting Principles 14th Edition by Jerry J. Weygandt and Paul D. Kimmel – Complete Chapters 1–27

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

,TABLE OF CONTENTS e b e b




1 Accounting in Action
e b e b e b e b




2 The Recording Process
e b e b e b e b




3 Adjusting the Accounts
e b e b e b




4 Completing the Accounting Cycle
e b e b e b e b




5 Accounting for Merchandising Operations
e b e b e b e b




6 Inventories
e b e b




7 Accounting Information Systems
e b e b e b e b




8 Fraud, Internal Control, and Cash
e b e b e b e b e b e b




9 Accounting for Receivables
e b e b e b e b




10 Plant Assets, Natural Resources, and Intangible Assets
e b e b e b e b e b e b e b




11 Current Liabilities and Payroll Accounting
e b e b e b e b e b




12 Accounting for Partnerships
e b e b e b




13 Corporations: Organization and Capital Stock Transactions
e b e b e b e b e b e b




14 Corporations: Dividends, Retained Earnings, and Income R
e b e b e b e b e b e b e b




eporting

,15 Long-Term Liabilities
e b e b




16 Investments
e b




17 Statement of Cash Flows
e b e b e b e b




18 Financial Analysis: The Big Picture
e b e b e b e b e b e b




19 Managerial Accounting
e b e b e b




20 Job Order Costing
e b e b e b e b




21 Process Costing
e b e b e b




22 Cost-Volume-Profit
e b e b




23 Incremental Analysis
e b e b e b




24 Budgetary Planning
e b e b




25 Budgetary Control and Responsibility Accounting
e b e b e b e b e b e b




26 Standard Costs and Balanced Scorecard
e b e b e b e b e b e b




27 Planning for Capital Investments
e b e b e b e b e b

, CHAPTER 1 e b




ACCOUNTING IN ACTION eb eb




CHAPTER LEARNING OBJECTIVES eb eb




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




dentifies, records, and communicates the economic events of an organization to interested users. The
eb eb eb eb eb eb eb eb eb eb eb eb eb eb




major users and uses of accounting are as follows: (a) Management uses accounting information to pla
eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb




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




cial interests on the basis of accounting data. (c)Creditors (suppliers and bankers) evaluate the risks of g
eb eb eb eb eb eb eb eb b
e eb eb eb eb eb eb eb eb




ranting credit or lending money on the basis of accounting information. Other groups that use accou
eb eb eb e b e b eb eb eb eb eb eb eb eb eb eb




nting information are taxing authorities, regulatory agencies, customers, and labor unions.
eb eb eb eb eb eb eb eb eb eb




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




of conduct by which actions are judged as right or wrong. Effective financial reporting depends on soun
b eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb




d ethical behavior.
eb eb




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




mary accounting standard- eb eb




setting body in the United States is the Financial Accounting Standards Board.
eb eb eb eb eb eb eb eb eb eb eb




3. State the accounting equation, and define its components. The basic accounting equation is:
eb eb eb eb eb eb eb eb eb e b eb eb




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




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




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




The expanded accounting equation is:
eb eb eb eb




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




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




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




e the gross increase in owner‘s equity from business activities for the purpose of earning income. Expen
eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb




ses are the costs of assets consumed or services used in the process of earning revenue. Owner‘s e
eb eb eb eb eb eb eb eb eb eb e b e b e b e b e b e b e b




quity is increased by an owner‘s investmentsand by revenues from business operations. Owner‘s e
e b e b e b e b e b e b b
e eb eb eb eb eb eb eb




quity is decreased by an owner‘s withdrawals of assets and by expenses.
eb eb eb eb eb eb eb eb eb eb eb




4. Analyze the effects of business transactions on the accounting equation. Each businesstransaction mu
eb eb eb eb eb eb eb eb eb eb eb b
e eb




st have a dual effect on the accounting equation. For example, if an individual asset increases, there mu
eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb eb




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




n owner's equity.
eb eb




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




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




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




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




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