CHAPTER 1
ACCOUNTING IN ACTION
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S
TAXONOMY
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
True-False Statements
1. 1 K 9. 1 K 17. 2 K 25. 4 K 33. 1 K
2. 1 K 10. 1 K 18. 2 K 26. 4 K 34. 1 K
3. 1 C 11. 1 K 19. 2 K 27. 4 K 35. 2 K
4. 1 K 12. 2 K 20. 2 C 28. 5 C 36. 2 C
5. 1 K 13. 2 K 21. 3 K 29. 5 C 37. 2 K
6. 1 C 14. 2 K 22. 3 K 30. 6 C 38. 3 K
7. 1 K 15. 2 K 23. 3 K 31. 6 K 39. 4 K
8. 1 C 16. 2 K 24. 4 K 32. 6 K 40. 5 K
Multiple Choice Questions
st
41. 1 K 69. 2 C 97. 3 K 125. 5 K 153. 1 K
st
42. 1 K 70. 2 K 98. 3 K 126. 5 K 154. 1 K
43. 1 K 71. 2 K 99. 3 K 127. 5 AP 155. 2 K
st
44. 1 C 72. 2 C 100. 3 C 129. 5 AP 156. 2 K
45. 1 K 73. 2 K 101. 3 K 129. 5 AP 157. 2 K
st
46. 1 K 74. 2 K 102. 3 C 130. 5 K 158. 2 K
47. 1 K 75. 2 K 103. 3 AP 131. 5 C 159. 3 K
48. 1 K 76. 2 K 104. 3 AP 132. 5 K 160. 4 K
49. 1 C 77. 2 K 105. 3 AP 133. 5 K 161. 4 C
50. 1 C 78. 2 K 106. 3 AP 134. 5 AP 162. 5 C
51. 1 C 79. 2 C 107. 3 AP 135. 5 AP 163. 6 K
52. 1 C 80. 2 C 108. 3 C 136. 5 AP 164. 7 K
53. 1 C 81. 2 K 109. 3 AP 137. 5 AP 165. 7 K
54. 1 C 82. 2 K 110. 3 C 138. 5 AP 166. 7 K
a
55. 6 K 83. 2 C 111. 3 C 139. 5 AP 167. 7 K
a
56. 6 K 84. 2 K 112. 4 C 140. 5 AP 168. 7 K
a
57. 6 K 85. 2 K 113. 4 C 141. 5 AP 169. 7 K
a
58. 6 C 86. 2 K 114. 3 C 142. 5 AP 170. 7 K
59. 1 K 87. 2 K 115. 4 C 143. 5 AP 171. 7 K
60. 1 K 88. 3 K 116. 4 K 144. 5 AP 172. 7 K
61. 2 C 89. 3 K 117. 4 C 145. 5 AP 173. 7 K
62. 2 K 90. 3 K 118. 4 C 146. 5 AP 174. 7 K
63. 2 C 91. 3 C 119. 4 C 147. 5 AN 175. 7 K
64. 2 K 92. 3 K 120. 4 AN 148. 5 AN 176. 7 K
65. 2 K 93. 3 K 121. 4 C 149. 5 AN 177. 7 K
66. 2 C 94. 3 C 122. 5 C 150. 5 AN
67. 2 K 95. 3 K 123. 5 C 151. 5 AN
68. 2 K 96. 3 K 124. 5 K 152. 1 K
st
This question also appears in a self-test at the student companion website.
a
This question covers a topic in an appendix to the chapter.
,1-2 Test Bank for Accounting Principles, Twelfth Edition
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S
TAXONOMY
Brief Exercises
178. 1 C 181. 3 AP 184. 4 C 187. 5 AP
179. 3 K 182. 3 AP 185. 5 AP 188. 5 AP
180. 3 K 183. 3 C 186. 5 C
Exercises
189. 1,4 K 197. 3 C 205. 4 C 213. 5 AP 221. 5 AN
190. 3 C 198. 3,4 C 206. 4 C 214. 5 AP 222. 5 C
191. 3 C 199. 3,4 C 207. 4 AP 215. 5 AP 223. 5 AP
192. 3 AP 200. 3,4 AP 208. 4 C 216. 5 AN 224. 5 AP
193. 3 C 201. 4 AP 209. 4 C 217. 5 AP 225. 5 AP
194. 3 AP 202. 4 AP 210. 4 C 218. 5 AP
195. 3 AN 203. 4 C 211. 4 C 219. 5 C
196. 3 AN 204. 4 AN 212. 4 C 220. 5 AP
Completion Statements
226. 1 K 228. 1 K 230. 2 K 232. 2 K 234. 3 K
227. 1 K 229. 1 K 231. 2 K 233. 3 K 235. 5 K
SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Learning Objective 1
1. TF 7. TF 34. TF 46. MC 52. MC 153. MC 228. C
2. TF 8. TF 41. MC 47. MC 53. MC 154. MC 229. C
3. TF 9. TF 42. MC 48. MC 54. MC 178. BE
4. TF 10. TF 43. MC 49. MC 59. MC 189. Ex
5. TF 11. TF 44. MC 50. MC 60. MC 226. C
6. TF 33. TF 45. MC 51. MC 152. MC 227. C
Learning Objective 2
12. TF 19. TF 63. MC 70. MC 77. MC 84. MC 158. MC
13. TF 20. TF 64. MC 71. MC 78. MC 85. MC 230. C
14. TF 35. TF 65. MC 72. MC 79. MC 86. MC 231. C
15. TF 36. TF 66. MC 73. MC 80. MC 87. MC 232. C
16. TF 37. TF 67. MC 74. MC 81. MC 155. MC
17. TF 61. MC 68. MC 75. MC 82. MC 156. MC
18. TF 62. MC 69. MC 76. MC 83. MC 157. MC
FOR INSTRUCTOR USE ONLY
, Accounting in Action 1-3
SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Learning Objective 3
21. TF 91. MC 98. MC 105. MC 114. MC 190. Ex 197. Ex
22. TF 92. MC 99. MC 106. MC 159. MC 191. Ex 198. Ex
23. TF 93. MC 100. MC 107. MC 179. BE 192. Ex 199. Ex
38. TF 94. MC 101. MC 108. MC 180. BE 193. Ex 200. Ex
88. MC 95. MC 102. MC 109. MC 181. BE 194. Ex 233. C
89. MC 96. MC 103. MC 110. MC 182. BE 195. Ex 234. C
90. MC 97. MC 104. MC 111. MC 183. BE 196. Ex
Learning Objective 4
24. TF 112. MC 118. MC 161. MC 200. Ex 205. Ex 210. Ex
25. TF 113. MC 119. MC 184. BE 201. Ex 206. Ex 211. Ex
26. TF 115. MC 120. MC 189. Ex 202. Ex 207. Ex 212. Ex
27. TF 116. MC 121. MC 198. Ex 203. Ex 208. Ex
39. TF 117. MC 160. MC 199. Ex 204. Ex 209. Ex
Learning Objective 5
28. TF 127. MC 135. MC 143. MC 151. MC 215. Ex 223. Ex
29. TF 128. MC 136. MC 144. MC 162. MC 216. Ex 224. Ex
40. TF 129. MC 137. MC 145. MC 185. BE 217. Ex 225. Ex
122. MC 130. MC 138. MC 146. MC 186. BE 218. Ex 235. C
123. MC 131. MC 139. MC 147. MC 187. BE 219. Ex
124. MC 132. MC 140. MC 148. MC 188. BE 220. Ex
125. MC 133. MC 141. MC 149. MC 213. Ex 221. Ex
126. MC 134. MC 142. MC 150. MC 214. Ex 222. Ex
Learning Objective 6
a a a a
30. TF 32. TF 56. MC 58. MC
a a a a
31. TF 55. MC 57. MC 163. MC
Learning Objective 7
164. MC 166. MC 168. MC 170. MC 172. MC 174. MC 176. MC
165. MC 167. MC 169. MC 171. MC 173. MC 175. MC 177. MC
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
This chapter also contains one set of ten Matching questions and Short-Answer Essay questions.
A summary table of all learning outcomes, including AACSB, AICPA, and IMA professional
standards, is available on the Weygandt Accounting Principles 12e instructor web site.
FOR INSTRUCTOR USE ONLY
, 1-4 Test Bank for Accounting Principles, Twelfth Edition
CHAPTER LEARNING OBJECTIVES
1. Identify the activities and users associated with accounting. Accounting is an information
system that identifies, records, and communicates the economic events of an organization to
interested users. The major users and uses of accounting are as follows (a) Management
uses accounting information to plan, organize, and run the business. (b) Investors (owners)
decide whether to buy, hold, or sell their financial interests on the basis of accounting data. (c)
Creditors (suppliers and bankers) evaluate the risks of granting credit or lending money on
the basis of accounting information. Other groups that use accounting information are taxing
authorities, regulatory agencies, customers, and labor unions.
2. Explain the building blocks of accounting: ethics, principles, and assumptions. Ethics
are the standards of conduct by which actions are judged as right or wrong. Effective financial
reporting depends on sound ethical behavior.
Generally accepted accounting principles are a common set of standards used by
accountants.
The monetary unit assumption requires that companies include in the accounting records only
transaction data that can be expressed in terms of money. The economic entity assumption
requires that the activities of each economic entity be kept separate from the activities of its
owner(s) and other economic entities.
3. State the accounting equation, and define its components. The basic accounting
equation is:
Assets = Liabilities + Owner's Equity
Assets are resources owned by a business. Liabilities are creditorship claims on total assets.
Owner's equity is the ownership claim on total assets.
The expanded accounting equation is:
Assets Liabilities + Owner's Capital Owner's Drawings + Revenues
Expenses
Owner's Capital is assets the owner puts into the business. Owner's drawings are the Assets
the owner withdraws for personal use. Revenues are increases in assets resulting from
income-earning activities. Expenses are the costs of assets consumed of services used in the
process of earning revenue.
4. Analyze the effects of business transactions on the accounting equation. Each business
transaction must have a dual effect on the accounting equation. For example, if an individual
asset increases, there must be a corresponding (1) decrease in another asset, or (2) increase
in a specific liability, or (3) increase in owner's equity.
5. Describe the four financial statements and how they are prepared. An income statement
presents the revenues and expenses, and resulting net income or net loss for a specific
period of time. An owner's equity statement summarizes the changes in owner's equity for a
specific period of time. A balance sheet reports the assets, liabilities, and owner's equity at a
specific date. A statement of cash flows summarizes information about the cash inflows
(receipts) and outflows (payments) for a specific period of time.
a
6. Explain the career opportunities in accounting. Accounting offers many different jobs in
fields such as public and private accounting, governmental, and forensic accounting.
Accounting is a popular major because there are many different types of jobs, with unlimited
potential for career advancement.
FOR INSTRUCTOR USE ONLY
ACCOUNTING IN ACTION
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S
TAXONOMY
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
True-False Statements
1. 1 K 9. 1 K 17. 2 K 25. 4 K 33. 1 K
2. 1 K 10. 1 K 18. 2 K 26. 4 K 34. 1 K
3. 1 C 11. 1 K 19. 2 K 27. 4 K 35. 2 K
4. 1 K 12. 2 K 20. 2 C 28. 5 C 36. 2 C
5. 1 K 13. 2 K 21. 3 K 29. 5 C 37. 2 K
6. 1 C 14. 2 K 22. 3 K 30. 6 C 38. 3 K
7. 1 K 15. 2 K 23. 3 K 31. 6 K 39. 4 K
8. 1 C 16. 2 K 24. 4 K 32. 6 K 40. 5 K
Multiple Choice Questions
st
41. 1 K 69. 2 C 97. 3 K 125. 5 K 153. 1 K
st
42. 1 K 70. 2 K 98. 3 K 126. 5 K 154. 1 K
43. 1 K 71. 2 K 99. 3 K 127. 5 AP 155. 2 K
st
44. 1 C 72. 2 C 100. 3 C 129. 5 AP 156. 2 K
45. 1 K 73. 2 K 101. 3 K 129. 5 AP 157. 2 K
st
46. 1 K 74. 2 K 102. 3 C 130. 5 K 158. 2 K
47. 1 K 75. 2 K 103. 3 AP 131. 5 C 159. 3 K
48. 1 K 76. 2 K 104. 3 AP 132. 5 K 160. 4 K
49. 1 C 77. 2 K 105. 3 AP 133. 5 K 161. 4 C
50. 1 C 78. 2 K 106. 3 AP 134. 5 AP 162. 5 C
51. 1 C 79. 2 C 107. 3 AP 135. 5 AP 163. 6 K
52. 1 C 80. 2 C 108. 3 C 136. 5 AP 164. 7 K
53. 1 C 81. 2 K 109. 3 AP 137. 5 AP 165. 7 K
54. 1 C 82. 2 K 110. 3 C 138. 5 AP 166. 7 K
a
55. 6 K 83. 2 C 111. 3 C 139. 5 AP 167. 7 K
a
56. 6 K 84. 2 K 112. 4 C 140. 5 AP 168. 7 K
a
57. 6 K 85. 2 K 113. 4 C 141. 5 AP 169. 7 K
a
58. 6 C 86. 2 K 114. 3 C 142. 5 AP 170. 7 K
59. 1 K 87. 2 K 115. 4 C 143. 5 AP 171. 7 K
60. 1 K 88. 3 K 116. 4 K 144. 5 AP 172. 7 K
61. 2 C 89. 3 K 117. 4 C 145. 5 AP 173. 7 K
62. 2 K 90. 3 K 118. 4 C 146. 5 AP 174. 7 K
63. 2 C 91. 3 C 119. 4 C 147. 5 AN 175. 7 K
64. 2 K 92. 3 K 120. 4 AN 148. 5 AN 176. 7 K
65. 2 K 93. 3 K 121. 4 C 149. 5 AN 177. 7 K
66. 2 C 94. 3 C 122. 5 C 150. 5 AN
67. 2 K 95. 3 K 123. 5 C 151. 5 AN
68. 2 K 96. 3 K 124. 5 K 152. 1 K
st
This question also appears in a self-test at the student companion website.
a
This question covers a topic in an appendix to the chapter.
,1-2 Test Bank for Accounting Principles, Twelfth Edition
SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S
TAXONOMY
Brief Exercises
178. 1 C 181. 3 AP 184. 4 C 187. 5 AP
179. 3 K 182. 3 AP 185. 5 AP 188. 5 AP
180. 3 K 183. 3 C 186. 5 C
Exercises
189. 1,4 K 197. 3 C 205. 4 C 213. 5 AP 221. 5 AN
190. 3 C 198. 3,4 C 206. 4 C 214. 5 AP 222. 5 C
191. 3 C 199. 3,4 C 207. 4 AP 215. 5 AP 223. 5 AP
192. 3 AP 200. 3,4 AP 208. 4 C 216. 5 AN 224. 5 AP
193. 3 C 201. 4 AP 209. 4 C 217. 5 AP 225. 5 AP
194. 3 AP 202. 4 AP 210. 4 C 218. 5 AP
195. 3 AN 203. 4 C 211. 4 C 219. 5 C
196. 3 AN 204. 4 AN 212. 4 C 220. 5 AP
Completion Statements
226. 1 K 228. 1 K 230. 2 K 232. 2 K 234. 3 K
227. 1 K 229. 1 K 231. 2 K 233. 3 K 235. 5 K
SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Learning Objective 1
1. TF 7. TF 34. TF 46. MC 52. MC 153. MC 228. C
2. TF 8. TF 41. MC 47. MC 53. MC 154. MC 229. C
3. TF 9. TF 42. MC 48. MC 54. MC 178. BE
4. TF 10. TF 43. MC 49. MC 59. MC 189. Ex
5. TF 11. TF 44. MC 50. MC 60. MC 226. C
6. TF 33. TF 45. MC 51. MC 152. MC 227. C
Learning Objective 2
12. TF 19. TF 63. MC 70. MC 77. MC 84. MC 158. MC
13. TF 20. TF 64. MC 71. MC 78. MC 85. MC 230. C
14. TF 35. TF 65. MC 72. MC 79. MC 86. MC 231. C
15. TF 36. TF 66. MC 73. MC 80. MC 87. MC 232. C
16. TF 37. TF 67. MC 74. MC 81. MC 155. MC
17. TF 61. MC 68. MC 75. MC 82. MC 156. MC
18. TF 62. MC 69. MC 76. MC 83. MC 157. MC
FOR INSTRUCTOR USE ONLY
, Accounting in Action 1-3
SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Learning Objective 3
21. TF 91. MC 98. MC 105. MC 114. MC 190. Ex 197. Ex
22. TF 92. MC 99. MC 106. MC 159. MC 191. Ex 198. Ex
23. TF 93. MC 100. MC 107. MC 179. BE 192. Ex 199. Ex
38. TF 94. MC 101. MC 108. MC 180. BE 193. Ex 200. Ex
88. MC 95. MC 102. MC 109. MC 181. BE 194. Ex 233. C
89. MC 96. MC 103. MC 110. MC 182. BE 195. Ex 234. C
90. MC 97. MC 104. MC 111. MC 183. BE 196. Ex
Learning Objective 4
24. TF 112. MC 118. MC 161. MC 200. Ex 205. Ex 210. Ex
25. TF 113. MC 119. MC 184. BE 201. Ex 206. Ex 211. Ex
26. TF 115. MC 120. MC 189. Ex 202. Ex 207. Ex 212. Ex
27. TF 116. MC 121. MC 198. Ex 203. Ex 208. Ex
39. TF 117. MC 160. MC 199. Ex 204. Ex 209. Ex
Learning Objective 5
28. TF 127. MC 135. MC 143. MC 151. MC 215. Ex 223. Ex
29. TF 128. MC 136. MC 144. MC 162. MC 216. Ex 224. Ex
40. TF 129. MC 137. MC 145. MC 185. BE 217. Ex 225. Ex
122. MC 130. MC 138. MC 146. MC 186. BE 218. Ex 235. C
123. MC 131. MC 139. MC 147. MC 187. BE 219. Ex
124. MC 132. MC 140. MC 148. MC 188. BE 220. Ex
125. MC 133. MC 141. MC 149. MC 213. Ex 221. Ex
126. MC 134. MC 142. MC 150. MC 214. Ex 222. Ex
Learning Objective 6
a a a a
30. TF 32. TF 56. MC 58. MC
a a a a
31. TF 55. MC 57. MC 163. MC
Learning Objective 7
164. MC 166. MC 168. MC 170. MC 172. MC 174. MC 176. MC
165. MC 167. MC 169. MC 171. MC 173. MC 175. MC 177. MC
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
This chapter also contains one set of ten Matching questions and Short-Answer Essay questions.
A summary table of all learning outcomes, including AACSB, AICPA, and IMA professional
standards, is available on the Weygandt Accounting Principles 12e instructor web site.
FOR INSTRUCTOR USE ONLY
, 1-4 Test Bank for Accounting Principles, Twelfth Edition
CHAPTER LEARNING OBJECTIVES
1. Identify the activities and users associated with accounting. Accounting is an information
system that identifies, records, and communicates the economic events of an organization to
interested users. The major users and uses of accounting are as follows (a) Management
uses accounting information to plan, organize, and run the business. (b) Investors (owners)
decide whether to buy, hold, or sell their financial interests on the basis of accounting data. (c)
Creditors (suppliers and bankers) evaluate the risks of granting credit or lending money on
the basis of accounting information. Other groups that use accounting information are taxing
authorities, regulatory agencies, customers, and labor unions.
2. Explain the building blocks of accounting: ethics, principles, and assumptions. Ethics
are the standards of conduct by which actions are judged as right or wrong. Effective financial
reporting depends on sound ethical behavior.
Generally accepted accounting principles are a common set of standards used by
accountants.
The monetary unit assumption requires that companies include in the accounting records only
transaction data that can be expressed in terms of money. The economic entity assumption
requires that the activities of each economic entity be kept separate from the activities of its
owner(s) and other economic entities.
3. State the accounting equation, and define its components. The basic accounting
equation is:
Assets = Liabilities + Owner's Equity
Assets are resources owned by a business. Liabilities are creditorship claims on total assets.
Owner's equity is the ownership claim on total assets.
The expanded accounting equation is:
Assets Liabilities + Owner's Capital Owner's Drawings + Revenues
Expenses
Owner's Capital is assets the owner puts into the business. Owner's drawings are the Assets
the owner withdraws for personal use. Revenues are increases in assets resulting from
income-earning activities. Expenses are the costs of assets consumed of services used in the
process of earning revenue.
4. Analyze the effects of business transactions on the accounting equation. Each business
transaction must have a dual effect on the accounting equation. For example, if an individual
asset increases, there must be a corresponding (1) decrease in another asset, or (2) increase
in a specific liability, or (3) increase in owner's equity.
5. Describe the four financial statements and how they are prepared. An income statement
presents the revenues and expenses, and resulting net income or net loss for a specific
period of time. An owner's equity statement summarizes the changes in owner's equity for a
specific period of time. A balance sheet reports the assets, liabilities, and owner's equity at a
specific date. A statement of cash flows summarizes information about the cash inflows
(receipts) and outflows (payments) for a specific period of time.
a
6. Explain the career opportunities in accounting. Accounting offers many different jobs in
fields such as public and private accounting, governmental, and forensic accounting.
Accounting is a popular major because there are many different types of jobs, with unlimited
potential for career advancement.
FOR INSTRUCTOR USE ONLY
