TEST BANK For Accounting Principles, 14th Edition by Jerry J. Weygandt, Paul D. Kimmel, Verified Chapters 1 - 27 ||Complete A+ Guide

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




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
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Transactions
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14 Corporations: Dividends, Retained Earnings, and Income
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,bn 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 b n




ACCOUNTING IN ACTION bn bn




CHAPTER LEARNING OBJECTIVES bn bn




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
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information to plan, organize, and run the business. (b) Investors (owners) decide whether to
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buy, hold, or sell their financial interests on the basis of accounting data. (c) Creditors (suppliers
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and bankers) evaluate the risks of granting credit or lending money on the basis of
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accounting information. Other groups that use accounting information are taxing authorities,
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regulatory agencies, customers, and labor unions.
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2. Explain the building blocks of accounting: ethics, principles, and assumptions. Ethics are the
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standards of conduct by which actions are judged as right or wrong. Effective financial reporting
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depends on sound ethical behavior.
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Generally accepted accounting principles are a common set of standards used by accountants.
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The primary accounting standard-setting body in the United States is the Financial Accounting
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Standards Board.
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3. State the accounting equation, and define its components. The basic
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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
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assets.Owner's equity is the ownership claim on total assets.
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The expanded accounting equation is:
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Assets bn Liabilities + Owner's Capital
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Expenses
Investments by owners (assets the owner puts into the business) are recorded in a category
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called owner‘s capital. Owner‘s drawings are the withdrawal of assets by the owner for personal
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use. Revenues are the gross increase in owner‘s equity from business activities for the purpose
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of earning income. Expenses are the costs of assets consumed or services used in the process
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bnof earning revenue. Owner‘s equity is increased by an owner‘s investments and by
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revenues from business operations. Owner‘s equity is decreased by an owner‘s withdrawals of
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assets and by expenses.
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4. Analyze the effects of business transactions on the accounting equation. Each
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business transaction must have a dual effect on the accounting equation. For example, if an
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individual asset increases, there must be a corresponding (1) decrease in another asset, or (2)
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increase in a specific liability, 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
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presents the revenues and expenses, and resulting net income or net loss for a specific
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period of time. An owner's equity statement summarizes the changes in owner's equity for a
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specific period of time. A balance sheet reports the assets, liabilities, and owner's equity at a
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specific date. A statement of cash flows summarizes information about the cash inflows (receipts)
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