TESTBANK
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete
,TABLE OF CONTENTS
1 Accounting in Action
2 The Recording Process
3 Adjusting the Accounts
4 Completing the Accounting Cycle
5 Accounting for Merchandising Operations
6 Inventories
7 Accounting Information Systems
8 Fraud, Internal Control, and Cash
9 Accounting for Receivables
10 Plant Assets, Natural Resources, and Intangible Assets
11 Current Liabilities and Payroll Accounting
12 Accounting for Partnerships
13 Corporations: Organization and Capital Stock
Transactions
14 Corporations: Dividends, Retained Earnings, and Income
,Reporting
15 Long-Term Liabilities
16 Investments
17 Statement of Cash Flows
18 Financial Analysis: The Big Picture
19 Managerial Accounting
20 Job Order Costing
21 Process Costing
22 Cost-Volume-Profit
23 Incremental Analysis
24 Budgetary Planning
25 Budgetary Control and Responsibility Accounting
26 Standard Costs and Balanced Scorecard
27 Planning for Capital Investments
, CHAPTER 1 c
ACCOUNTING IN ACTION c c
CHAPTER LEARNING OBJECTIVES
c c
1. Identifycthecactivitiescandcuserscassociatedcwithcaccounting.cAccountingciscancinformationcsystemcthatci
dentifies,crecords,candccommunicatescthececonomicceventscofcancorganizationctocinterestedcusers.cThec
majorcuserscandcusescofcaccountingcarecascfollows:c(a)cManagementcusescaccountingcinformationctocpla
n,corganize,candcruncthecbusiness.c(b)cInvestorsc(owners)cdecidecwhetherctocbuy,chold,corcsellctheircfinan
cialcinterestsconcthecbasiscofcaccountingcdata.c(c)cCreditorsc(supplierscandcbankers)cevaluatecthecriskscofcg
rantingccreditcorclendingc moneyc oncthecbasiscofcaccountingcinformation.cOthercgroupscthatcusecaccoun
tingcinformationcarectaxingcauthorities,cregulatorycagencies,ccustomers,candclaborcunions.
2. Explaincthecbuildingcblockscofcaccounting:cethics,cprinciples,candcassumptions.cEthicscarecthecstandards
cofcconductcbycwhichcactionscarecjudgedcascrightcorcwrong.cEffectivecfinancialcreportingcdependsconc sou
ndcethicalcbehavior.
Generallycacceptedcaccountingcprinciplescarecaccommoncsetcofcstandardscusedcbycaccountants.cThecpri
marycaccountingcstandard-
settingcbodycincthecUnitedcStatesciscthecFinancialcAccountingcStandardscBoard.
3. Statecthecaccountingcequation,candcdefinecitsccomponents.cThecbasicc accountingcequationcis:
Assetsc=cLiabilitiesc+cOwner'scEquity
Assetsc arec resourcesc ac businessc owns.c Liabilitiesc arec creditorshipc claimsc onc totalc assets.cOwner'scequity
ciscthecownershipcclaimconctotalcassets.
Thecexpandedcaccountingcequationcis:
AssetsccLiabilitiesc+cOwner'scCapitalccOwner'scDrawingsc+cRevenuesc
Expenses
Investmentscbycownersc(assetscthecownercputscintocthecbusiness)carecrecordedcincaccategoryccalledcown
er‘sccapital.cOwner‘scdrawingscarecthecwithdrawalcofcassetscbycthecownercforcpersonalcuse.cRevenuescar
ecthecgrosscincreasecincowner‘scequitycfromcbusinesscactivitiescforcthecpurposecofcearningcincome.cExpe
nsescarectheccostscofcassetscconsumedcorcservicescusedcinc thec processc ofc earningc revenue.c Owner‘sc eq
uityc isc increasedc byc anc owner‘sc investmentscandcbycrevenuescfromcbusinesscoperations.cOwner‘scequit
yciscdecreasedcbycancowner‘scwithdrawalscofcassetscandcbycexpenses.
4. Analyzectheceffectscofcbusinessctransactionsconcthecaccountingcequation.cEachcbusinessctransactioncmu
stchavecacdualceffectconcthecaccountingcequation.cForcexample,cifcancindividualcassetcincreases,ctherecmu
stcbecaccorrespondingc(1)cdecreasecincanothercasset,corc(2)cincreasecincacspecificcliability,corc(3)cincreaseci
ncowner'scequity.
5. Describecthecfourcfinancialcstatementscandchowctheycarecprepared.cAncincomecstatementcpresentscthec
revenuescandcexpenses,candcresultingcnetcincomecorcnetc losscforcac specificcperiodcofctime.cAncowner'sc
equitycstatementcsummarizescthecchangescincowner'scequitycforcacspecificcperiodcofctime.cAcbalancecshe
etcreportscthecassets,cliabilities,candcowner'scequitycatcacspecificcdate.cAcstatementcofccashcflowscsumma
rizescinformationcaboutctheccashcinflowsc(receipts)candcoutflowsc(payments)cforcacspecificcperiodcofctim
e.
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete
,TABLE OF CONTENTS
1 Accounting in Action
2 The Recording Process
3 Adjusting the Accounts
4 Completing the Accounting Cycle
5 Accounting for Merchandising Operations
6 Inventories
7 Accounting Information Systems
8 Fraud, Internal Control, and Cash
9 Accounting for Receivables
10 Plant Assets, Natural Resources, and Intangible Assets
11 Current Liabilities and Payroll Accounting
12 Accounting for Partnerships
13 Corporations: Organization and Capital Stock
Transactions
14 Corporations: Dividends, Retained Earnings, and Income
,Reporting
15 Long-Term Liabilities
16 Investments
17 Statement of Cash Flows
18 Financial Analysis: The Big Picture
19 Managerial Accounting
20 Job Order Costing
21 Process Costing
22 Cost-Volume-Profit
23 Incremental Analysis
24 Budgetary Planning
25 Budgetary Control and Responsibility Accounting
26 Standard Costs and Balanced Scorecard
27 Planning for Capital Investments
, CHAPTER 1 c
ACCOUNTING IN ACTION c c
CHAPTER LEARNING OBJECTIVES
c c
1. Identifycthecactivitiescandcuserscassociatedcwithcaccounting.cAccountingciscancinformationcsystemcthatci
dentifies,crecords,candccommunicatescthececonomicceventscofcancorganizationctocinterestedcusers.cThec
majorcuserscandcusescofcaccountingcarecascfollows:c(a)cManagementcusescaccountingcinformationctocpla
n,corganize,candcruncthecbusiness.c(b)cInvestorsc(owners)cdecidecwhetherctocbuy,chold,corcsellctheircfinan
cialcinterestsconcthecbasiscofcaccountingcdata.c(c)cCreditorsc(supplierscandcbankers)cevaluatecthecriskscofcg
rantingccreditcorclendingc moneyc oncthecbasiscofcaccountingcinformation.cOthercgroupscthatcusecaccoun
tingcinformationcarectaxingcauthorities,cregulatorycagencies,ccustomers,candclaborcunions.
2. Explaincthecbuildingcblockscofcaccounting:cethics,cprinciples,candcassumptions.cEthicscarecthecstandards
cofcconductcbycwhichcactionscarecjudgedcascrightcorcwrong.cEffectivecfinancialcreportingcdependsconc sou
ndcethicalcbehavior.
Generallycacceptedcaccountingcprinciplescarecaccommoncsetcofcstandardscusedcbycaccountants.cThecpri
marycaccountingcstandard-
settingcbodycincthecUnitedcStatesciscthecFinancialcAccountingcStandardscBoard.
3. Statecthecaccountingcequation,candcdefinecitsccomponents.cThecbasicc accountingcequationcis:
Assetsc=cLiabilitiesc+cOwner'scEquity
Assetsc arec resourcesc ac businessc owns.c Liabilitiesc arec creditorshipc claimsc onc totalc assets.cOwner'scequity
ciscthecownershipcclaimconctotalcassets.
Thecexpandedcaccountingcequationcis:
AssetsccLiabilitiesc+cOwner'scCapitalccOwner'scDrawingsc+cRevenuesc
Expenses
Investmentscbycownersc(assetscthecownercputscintocthecbusiness)carecrecordedcincaccategoryccalledcown
er‘sccapital.cOwner‘scdrawingscarecthecwithdrawalcofcassetscbycthecownercforcpersonalcuse.cRevenuescar
ecthecgrosscincreasecincowner‘scequitycfromcbusinesscactivitiescforcthecpurposecofcearningcincome.cExpe
nsescarectheccostscofcassetscconsumedcorcservicescusedcinc thec processc ofc earningc revenue.c Owner‘sc eq
uityc isc increasedc byc anc owner‘sc investmentscandcbycrevenuescfromcbusinesscoperations.cOwner‘scequit
yciscdecreasedcbycancowner‘scwithdrawalscofcassetscandcbycexpenses.
4. Analyzectheceffectscofcbusinessctransactionsconcthecaccountingcequation.cEachcbusinessctransactioncmu
stchavecacdualceffectconcthecaccountingcequation.cForcexample,cifcancindividualcassetcincreases,ctherecmu
stcbecaccorrespondingc(1)cdecreasecincanothercasset,corc(2)cincreasecincacspecificcliability,corc(3)cincreaseci
ncowner'scequity.
5. Describecthecfourcfinancialcstatementscandchowctheycarecprepared.cAncincomecstatementcpresentscthec
revenuescandcexpenses,candcresultingcnetcincomecorcnetc losscforcac specificcperiodcofctime.cAncowner'sc
equitycstatementcsummarizescthecchangescincowner'scequitycforcacspecificcperiodcofctime.cAcbalancecshe
etcreportscthecassets,cliabilities,candcowner'scequitycatcacspecificcdate.cAcstatementcofccashcflowscsumma
rizescinformationcaboutctheccashcinflowsc(receipts)candcoutflowsc(payments)cforcacspecificcperiodcofctim
e.
