,DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
c c c c c c c c c
CHAPTER 1 c
ACCOUNTING IN ACTION c c
CHAPTER LEARNING OBJECTIVES
c c
1. Identifycthecactivitiescandcuserscassociatedcwithcaccounting.cAccountingciscancinformationcs
ystemcthatcidentifies,crecords,candccommunicatescthececonomicceventscofcancorganizationctocint
erestedcusers.cThecmajorcuserscandcusescofcaccountingcarecascfollows:c(a)cManagementcusesca
ccountingcinformationctocplan,corganize,candcruncthecbusiness.c(b)cInvestorsc(owners)cdecidecwh
etherctocbuy,chold,corcsellctheircfinancialcinterestsconcthecbasiscofcaccountingcdata.c(c)cCreditorsc(s
upplierscandcbankers)cevaluatecthecriskscofc grantingccreditcorclendingcmoneyc oncthecbasiscofcac
countingcinformation.cOthercgroupscthatcusecaccountingcinformationcarectaxingcauthorities,cregul
atorycagencies,ccustomers,candclaborcunions.
2. Explaincthecbuildingcblockscofcaccounting:cethics,cprinciples,candcassumptions.cEthicscar
ecthecstandardscofcconductcbycwhichcactionscarecjudgedcascrightcorcwrong.cEffectivecfinancialcrep
ortingcdependsconcsoundcethicalcbehavior.
Generallycacceptedcaccountingcprinciplescarecaccommoncsetcofcstandardscusedcbycaccountants.
cThecprimarycaccountingcstandard-
settingcbodycincthecUnitedcStatesciscthecFinancialcAccountingcStandardscBoard.
3. Statecthecaccountingcequation,candcdefinecitsccomponents.cThecbasicc accountingcequatio
ncis:
Assetsc=cLiabilitiesc+cOwner'scEquity
Assetscarecresourcescacbusinesscowns.cLiabilitiescareccreditorshipcclaimsconctotalcassets.cOwner'
scequityciscthecownershipcclaimconctotalcassets.
Thecexpandedcaccountingcequationcis:
AssetsccLiabilitiesc+cOwner'scCapitalccOwner'scDrawingsc+cRevenuesc
Expenses
Investmentscbycownersc(assetscthecownercputscintocthecbusiness)carecrecordedcincaccategoryccal
ledcowner’sccapital.cOwner’scdrawingscarecthecwithdrawalcofcassetscbycthecownercforcpersonalcus
e.cRevenuescarecthecgrosscincreasecincowner’scequitycfromcbusinesscactivitiescforcthecpurposecof
cearningcincome.cExpensescarectheccostscofcassetscconsumedcorcservicescusedcinc thec processc
ofc earningc revenue.c Owner’sc equityc isc increasedc byc anc owner’sc investmentscandcbycrevenuesc
fromcbusinesscoperations.cOwner’scequityciscdecreasedcbycancowner’scwithdrawalscofcassetscan
dcbycexpenses.
4. Analyzectheceffectscofcbusinessctransactionsconcthecaccountingcequation.cEachcbusinessct
ransactioncmustchavecacdualceffectconcthecaccountingcequation.cForcexample,cifcancindividualcas
setcincreases,ctherecmustcbecaccorrespondingc(1)cdecreasecincanothercasset,corc(2)cincreasecincac
specificcliability,corc(3)cincreasecincowner'scequity.
5. Describecthecfourcfinancialcstatementscandchowctheycarecprepared.cAncincomecstatementcp
resentscthecrevenuescandcexpenses,candcresultingcnetcincomecorcnetclosscforcac specificcperiodco
fctime.cAncowner'scequitycstatementcsummarizescthecchangescincowner'scequitycforcacspecificcper
iodcofctime.cAcbalancecsheetcreportscthecassets,cliabilities,candcowner'scequitycatcacspecificcdate.c
Acstatementcofccashcflowscsummarizescinformationcaboutctheccashcinflowsc(receipts)candcoutflo
wsc(payments)cforcacspecificcperiodcofctime.
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
c c c c c c c c c
1c-c2 TestcBankcforcAccountingcPrinciples,cFourteenthcEdition
a
6.cExplainctheccareercopportunitiescincaccounting.cAccountingcofferscmanycdifferentcjobscincfield
scsuchcascpubliccandcprivatecaccounting,cgovernmental,candcforensiccaccounting.cAccountingcisc
acpopularcmajorcbecausectherecarecmanycdifferentctypescofcjobs,cwithcunlimitedcpotentialcforccare
ercadvancement.
FORcINSTRUCTORcUSEcONLY
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
c c c c c c c c c
AccountingcincAction 1c-c3
TRUE-FALSE STATEMENTS c
1. Ownerscofcbusinesscfirmscarectheconlycpeoplecwhocneedcaccountingcinformation.
Ans:c F,c LO:c 1,c Bloom:c K,c Difficulty:c Easy,c Min:c 1,c AACSB:c None,c AICPAc BB:c Governancec Perspective,c AICPAc FC:c Reporting,c AICPAc PC:c None,c IMA
:cReporting
2. Transactionsc thatc canc bec measuredc inc dollarsc andc centsc arec recordedc inc thec financialcin
formationcsystem.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
3. Thec hiringc ofc ac newc companyc presidentc isc anc economicc eventc recordedc byc thec financialcin
formationcsystem.
Ans:cF,cLO:c1,cBloom:cC,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
4. Managementcofcacbusinesscenterpriseciscthecmajorcexternalcusercofcinformation.
Ans:cF,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
5. Accountingc communicatesc financialc informationc aboutc ac businessc enterprisec toc bothcinterna
lcandcexternalcusers.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
6. Accountingc informationcisc usedc onlyc byc externalcusersc withc acfinancialcinterestc inc acbusinessc
enterprise.
Ans:cF,cLO:c1,cBloom:cC,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
7. Financialc statementsc arec thec majorc meansc ofc communicatingc accountingc informationc toci
nterestedcparties.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
8. Bookkeepingc andc accountingc arec onec andc thec samec becausec thec bookkeepingc functionci
ncludescthecaccountingcprocess.
Ans:cF,cLO:c1,cBloom:cC,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
9. ThecoriginscofcaccountingcarecattributedctocLucacPacioli,cacfamouscmathematician.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
FORcINSTRUCTORcUSEcONLY
mynursytest.store
c c c c c c c c c
CHAPTER 1 c
ACCOUNTING IN ACTION c c
CHAPTER LEARNING OBJECTIVES
c c
1. Identifycthecactivitiescandcuserscassociatedcwithcaccounting.cAccountingciscancinformationcs
ystemcthatcidentifies,crecords,candccommunicatescthececonomicceventscofcancorganizationctocint
erestedcusers.cThecmajorcuserscandcusescofcaccountingcarecascfollows:c(a)cManagementcusesca
ccountingcinformationctocplan,corganize,candcruncthecbusiness.c(b)cInvestorsc(owners)cdecidecwh
etherctocbuy,chold,corcsellctheircfinancialcinterestsconcthecbasiscofcaccountingcdata.c(c)cCreditorsc(s
upplierscandcbankers)cevaluatecthecriskscofc grantingccreditcorclendingcmoneyc oncthecbasiscofcac
countingcinformation.cOthercgroupscthatcusecaccountingcinformationcarectaxingcauthorities,cregul
atorycagencies,ccustomers,candclaborcunions.
2. Explaincthecbuildingcblockscofcaccounting:cethics,cprinciples,candcassumptions.cEthicscar
ecthecstandardscofcconductcbycwhichcactionscarecjudgedcascrightcorcwrong.cEffectivecfinancialcrep
ortingcdependsconcsoundcethicalcbehavior.
Generallycacceptedcaccountingcprinciplescarecaccommoncsetcofcstandardscusedcbycaccountants.
cThecprimarycaccountingcstandard-
settingcbodycincthecUnitedcStatesciscthecFinancialcAccountingcStandardscBoard.
3. Statecthecaccountingcequation,candcdefinecitsccomponents.cThecbasicc accountingcequatio
ncis:
Assetsc=cLiabilitiesc+cOwner'scEquity
Assetscarecresourcescacbusinesscowns.cLiabilitiescareccreditorshipcclaimsconctotalcassets.cOwner'
scequityciscthecownershipcclaimconctotalcassets.
Thecexpandedcaccountingcequationcis:
AssetsccLiabilitiesc+cOwner'scCapitalccOwner'scDrawingsc+cRevenuesc
Expenses
Investmentscbycownersc(assetscthecownercputscintocthecbusiness)carecrecordedcincaccategoryccal
ledcowner’sccapital.cOwner’scdrawingscarecthecwithdrawalcofcassetscbycthecownercforcpersonalcus
e.cRevenuescarecthecgrosscincreasecincowner’scequitycfromcbusinesscactivitiescforcthecpurposecof
cearningcincome.cExpensescarectheccostscofcassetscconsumedcorcservicescusedcinc thec processc
ofc earningc revenue.c Owner’sc equityc isc increasedc byc anc owner’sc investmentscandcbycrevenuesc
fromcbusinesscoperations.cOwner’scequityciscdecreasedcbycancowner’scwithdrawalscofcassetscan
dcbycexpenses.
4. Analyzectheceffectscofcbusinessctransactionsconcthecaccountingcequation.cEachcbusinessct
ransactioncmustchavecacdualceffectconcthecaccountingcequation.cForcexample,cifcancindividualcas
setcincreases,ctherecmustcbecaccorrespondingc(1)cdecreasecincanothercasset,corc(2)cincreasecincac
specificcliability,corc(3)cincreasecincowner'scequity.
5. Describecthecfourcfinancialcstatementscandchowctheycarecprepared.cAncincomecstatementcp
resentscthecrevenuescandcexpenses,candcresultingcnetcincomecorcnetclosscforcac specificcperiodco
fctime.cAncowner'scequitycstatementcsummarizescthecchangescincowner'scequitycforcacspecificcper
iodcofctime.cAcbalancecsheetcreportscthecassets,cliabilities,candcowner'scequitycatcacspecificcdate.c
Acstatementcofccashcflowscsummarizescinformationcaboutctheccashcinflowsc(receipts)candcoutflo
wsc(payments)cforcacspecificcperiodcofctime.
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
c c c c c c c c c
1c-c2 TestcBankcforcAccountingcPrinciples,cFourteenthcEdition
a
6.cExplainctheccareercopportunitiescincaccounting.cAccountingcofferscmanycdifferentcjobscincfield
scsuchcascpubliccandcprivatecaccounting,cgovernmental,candcforensiccaccounting.cAccountingcisc
acpopularcmajorcbecausectherecarecmanycdifferentctypescofcjobs,cwithcunlimitedcpotentialcforccare
ercadvancement.
FORcINSTRUCTORcUSEcONLY
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
c c c c c c c c c
AccountingcincAction 1c-c3
TRUE-FALSE STATEMENTS c
1. Ownerscofcbusinesscfirmscarectheconlycpeoplecwhocneedcaccountingcinformation.
Ans:c F,c LO:c 1,c Bloom:c K,c Difficulty:c Easy,c Min:c 1,c AACSB:c None,c AICPAc BB:c Governancec Perspective,c AICPAc FC:c Reporting,c AICPAc PC:c None,c IMA
:cReporting
2. Transactionsc thatc canc bec measuredc inc dollarsc andc centsc arec recordedc inc thec financialcin
formationcsystem.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
3. Thec hiringc ofc ac newc companyc presidentc isc anc economicc eventc recordedc byc thec financialcin
formationcsystem.
Ans:cF,cLO:c1,cBloom:cC,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
4. Managementcofcacbusinesscenterpriseciscthecmajorcexternalcusercofcinformation.
Ans:cF,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
5. Accountingc communicatesc financialc informationc aboutc ac businessc enterprisec toc bothcinterna
lcandcexternalcusers.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
6. Accountingc informationcisc usedc onlyc byc externalcusersc withc acfinancialcinterestc inc acbusinessc
enterprise.
Ans:cF,cLO:c1,cBloom:cC,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
7. Financialc statementsc arec thec majorc meansc ofc communicatingc accountingc informationc toci
nterestedcparties.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
8. Bookkeepingc andc accountingc arec onec andc thec samec becausec thec bookkeepingc functionci
ncludescthecaccountingcprocess.
Ans:cF,cLO:c1,cBloom:cC,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,cAICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
9. ThecoriginscofcaccountingcarecattributedctocLucacPacioli,cacfamouscmathematician.
Ans:cT,cLO:c1,cBloom:cK,cDifficulty:cEasy,cMin:c1,cAACSB:cNone,cAICPAcBB:cGovernancecPerspective,c AICPAcFC:c MeasurementcAnalysiscan
dcInterpretation,cAICPAcPC:cNone,cIMA:cReporting
FORcINSTRUCTORcUSEcONLY
mynursytest.store
