,DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
m m m m m m m m m
CHAPTER 1 m
ACCOUNTING IN ACTIONm m
CHAPTER LEARNING OBJECTIVES
m m
1. Identifymthemactivitiesmandmusersmassociatedmwithmaccounting.mAccountingmismanminformati
onmsystem mthatmidentifies,mrecords,mandmcommunicatesmthemeconomic meventsmofmanmorganizati
onmtominterestedmusers.mThemmajormusersmandmusesmof maccountingmaremasmfollows:m(a)mManage
mentmusesmaccountingminformationmtomplan,morganize,mandmrunmthembusiness.m(b)mInvestorsm(o
wners)mdecidemwhethermtombuy,mhold,mormsellmtheirmfinancialminterestsmonmthembasismof maccounti
ngmdata.m(c)mCreditorsm(suppliersmandmbankers)mevaluatemthemrisksmof mgrantingmcreditmormlendin
gmmoneymonm thembasismof maccountingminformation.mOthermgroupsmthatmusemaccountingminforma
tionmaremtaxingmauthorities,mregulatory magencies,mcustomers,mandmlabormunions.
2. Explainmthembuildingmblocksmofmaccounting:methics,mprinciples,mandmassumptions.mEthic
smaremthemstandardsmof mconductmbymwhichmactionsmaremjudgedmasmrightmormwrong.mEffectivemfin
ancialmreportingmdependsmonmsoundmethicalmbehavior.
Generally macceptedmaccountingmprinciplesmaremamcommonmsetmof mstandardsmusedmby maccount
ants.mThemprimary maccountingmstandard-
settingmbody minmthemUnitedmStatesmismthemFinancialmAccountingmStandardsmBoard.
3. Statemthemaccountingmequation,mandmdefinemitsmcomponents.mThembasic maccountingm equa
tionmis:
Assetsm=mLiabilitiesm+mOwner'smEquity
Assetsm arem resourcesm am businessm owns.m Liabilitiesm arem creditorshipm claimsm onm totalm assets
.mOwner'smequity mismthemownershipmclaim monmtotalmassets.
Themexpandedmaccountingmequationmis:
Assetsm=mLiabilitiesm+mOwner'smCapitalm−mOwner'smDrawingsm+mRevenuesm−
Expenses
Investmentsmby mownersm(assetsmthemownermputsmintomthembusiness)maremrecordedminmamcategor
y mcalledmowner’smcapital.mOwner’smdrawingsmaremthemwithdrawalmof massetsmby mthemownermformp
ersonalmuse.mRevenuesmaremthemgrossmincreaseminmowner’smequity mfrommbusinessmactivitiesmfor
mthempurposemof mearningmincome.mExpensesmaremthemcostsmof massetsmconsumedmormservicesmu
sedminmthemprocessmof mearningmrevenue.mOwner’smequity mismincreasedmby manmowner’sminvestm
entsm andmby mrevenuesmfrom mbusinessmoperations.mOwner’smequity mismdecreasedmby manmowner’
smwithdrawalsmof massetsmandmby mexpenses.
4. Analyzemthemeffectsmofmbusinessmtransactionsmonmthemaccountingmequation.mEachmbusin
essmtransactionmmustmhavemamdualmeffectmonmthemaccountingmequation.mFormexample,mif manmindi
vidualmassetmincreases,mtheremmustmbemamcorrespondingm(1)mdecreaseminmanothermasset,morm(2)
mincreaseminmamspecific mliability,morm(3)mincreaseminmowner'smequity.
5. Describemthemfourmfinancialmstatementsmandmhowmtheymaremprepared.mAnmincomemstatem
entmpresentsmthemrevenuesmandmexpenses,mandmresultingmnetmincomemormnetmlossmformamspecifi
c m periodmof mtime.mAnmowner'smequity mstatementmsummarizesmthemchangesminmowner'smequity mf
ormamspecific mperiodmof mtime.mAmbalancemsheetmreportsmthemassets,mliabilities,mandmowner'smequi
ty matmamspecific mdate.mAmstatementmofmcashmflowsmsummarizesminformationmaboutmthemcashminfl
owsm(receipts)mandmoutflowsm(payments)mformamspecific mperiodmof mtime.
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,DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
m m m m m m m m m
1m-m2 TestmBankmformAccountingmPrinciples,mFourteenthmEdition
a
6.mExplainmthemcareermopportunitiesminmaccounting.mAccountingmoffersmmanymdifferentmjobsmin
mfieldsmsuchmasmpublic mandmprivatemaccounting,mgovernmental,mandmforensic maccounting.mAcco
untingmismampopularmmajormbecausemtheremaremmanymdifferentmtypesmofmjobs,mwithmunlimitedmpo
tentialmformcareermadvancement.
FORmINSTRUCTORmUSEmONLY
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, DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
m m m m m m m m m
AccountingminmAction 1m-m3
TRUE-FALSE STATEMENTS m
1. Ownersmof mbusinessmfirmsmaremthemonly mpeoplemwhomneedmaccountingminformatio
n.
Ans: m F, m LO: m 1, m Bloom: mK, mDifficulty:m Easy,m Min: m 1,m AACSB: m None, m AICPAmBB: m Governancem Perspective, m AICPAm FC: m Reporting, m AICPAm PC:
m None, m IMA: m Reporting
2. Transactionsm thatm canm bem measuredm inm dollarsm andm centsm arem recordedm inm them financ
ialminformationmsystem.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
3. Them hiringm of m am newm company m presidentm ism anm economicm eventm recordedm by m them finan
cialminformationmsystem.
Ans: mF, mLO: m1, mBloom: mC, mDifficulty:mEasy,mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective,mAICPAmFC: mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
4. Managementmof mambusinessmenterprisemismthemmajormexternalmusermof minformation.
Ans: mF, mLO: m1, mBloom: mK,mDifficulty: mEasy, mMin: m1,mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
5. Accountingm communicatesm financialm informationm aboutm am businessm enterprisem tom both
m internalmandmexternalmusers.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
6. Accountingm informationm ism usedm only m by m externalm usersm withm am financialm interestm in
m ambusinessmenterprise.
Ans: mF, mLO: m1, mBloom: mC, mDifficulty:mEasy,mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective,mAICPAmFC: mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
7. Financialm statementsm arem them majorm meansm of m communicatingm accountingm informationm
tominterestedmparties.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1,mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
8. Bookkeepingm andmaccountingm aremonemandmthemsamem becausemthembookkeepingm functio
nmincludesmthemaccountingmprocess.
Ans: mF, mLO: m1, mBloom: mC, mDifficulty:mEasy,mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective,mAICPAmFC: mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
9. Themoriginsmof maccountingmaremattributedmtomLucamPacioli,mamfamousmmathematician.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1,mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
FORmINSTRUCTORmUSEmONL
Y
mynursytest.store
m m m m m m m m m
CHAPTER 1 m
ACCOUNTING IN ACTIONm m
CHAPTER LEARNING OBJECTIVES
m m
1. Identifymthemactivitiesmandmusersmassociatedmwithmaccounting.mAccountingmismanminformati
onmsystem mthatmidentifies,mrecords,mandmcommunicatesmthemeconomic meventsmofmanmorganizati
onmtominterestedmusers.mThemmajormusersmandmusesmof maccountingmaremasmfollows:m(a)mManage
mentmusesmaccountingminformationmtomplan,morganize,mandmrunmthembusiness.m(b)mInvestorsm(o
wners)mdecidemwhethermtombuy,mhold,mormsellmtheirmfinancialminterestsmonmthembasismof maccounti
ngmdata.m(c)mCreditorsm(suppliersmandmbankers)mevaluatemthemrisksmof mgrantingmcreditmormlendin
gmmoneymonm thembasismof maccountingminformation.mOthermgroupsmthatmusemaccountingminforma
tionmaremtaxingmauthorities,mregulatory magencies,mcustomers,mandmlabormunions.
2. Explainmthembuildingmblocksmofmaccounting:methics,mprinciples,mandmassumptions.mEthic
smaremthemstandardsmof mconductmbymwhichmactionsmaremjudgedmasmrightmormwrong.mEffectivemfin
ancialmreportingmdependsmonmsoundmethicalmbehavior.
Generally macceptedmaccountingmprinciplesmaremamcommonmsetmof mstandardsmusedmby maccount
ants.mThemprimary maccountingmstandard-
settingmbody minmthemUnitedmStatesmismthemFinancialmAccountingmStandardsmBoard.
3. Statemthemaccountingmequation,mandmdefinemitsmcomponents.mThembasic maccountingm equa
tionmis:
Assetsm=mLiabilitiesm+mOwner'smEquity
Assetsm arem resourcesm am businessm owns.m Liabilitiesm arem creditorshipm claimsm onm totalm assets
.mOwner'smequity mismthemownershipmclaim monmtotalmassets.
Themexpandedmaccountingmequationmis:
Assetsm=mLiabilitiesm+mOwner'smCapitalm−mOwner'smDrawingsm+mRevenuesm−
Expenses
Investmentsmby mownersm(assetsmthemownermputsmintomthembusiness)maremrecordedminmamcategor
y mcalledmowner’smcapital.mOwner’smdrawingsmaremthemwithdrawalmof massetsmby mthemownermformp
ersonalmuse.mRevenuesmaremthemgrossmincreaseminmowner’smequity mfrommbusinessmactivitiesmfor
mthempurposemof mearningmincome.mExpensesmaremthemcostsmof massetsmconsumedmormservicesmu
sedminmthemprocessmof mearningmrevenue.mOwner’smequity mismincreasedmby manmowner’sminvestm
entsm andmby mrevenuesmfrom mbusinessmoperations.mOwner’smequity mismdecreasedmby manmowner’
smwithdrawalsmof massetsmandmby mexpenses.
4. Analyzemthemeffectsmofmbusinessmtransactionsmonmthemaccountingmequation.mEachmbusin
essmtransactionmmustmhavemamdualmeffectmonmthemaccountingmequation.mFormexample,mif manmindi
vidualmassetmincreases,mtheremmustmbemamcorrespondingm(1)mdecreaseminmanothermasset,morm(2)
mincreaseminmamspecific mliability,morm(3)mincreaseminmowner'smequity.
5. Describemthemfourmfinancialmstatementsmandmhowmtheymaremprepared.mAnmincomemstatem
entmpresentsmthemrevenuesmandmexpenses,mandmresultingmnetmincomemormnetmlossmformamspecifi
c m periodmof mtime.mAnmowner'smequity mstatementmsummarizesmthemchangesminmowner'smequity mf
ormamspecific mperiodmof mtime.mAmbalancemsheetmreportsmthemassets,mliabilities,mandmowner'smequi
ty matmamspecific mdate.mAmstatementmofmcashmflowsmsummarizesminformationmaboutmthemcashminfl
owsm(receipts)mandmoutflowsm(payments)mformamspecific mperiodmof mtime.
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
m m m m m m m m m
1m-m2 TestmBankmformAccountingmPrinciples,mFourteenthmEdition
a
6.mExplainmthemcareermopportunitiesminmaccounting.mAccountingmoffersmmanymdifferentmjobsmin
mfieldsmsuchmasmpublic mandmprivatemaccounting,mgovernmental,mandmforensic maccounting.mAcco
untingmismampopularmmajormbecausemtheremaremmanymdifferentmtypesmofmjobs,mwithmunlimitedmpo
tentialmformcareermadvancement.
FORmINSTRUCTORmUSEmONLY
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting Principles 14th Edition Weygandt
m m m m m m m m m
AccountingminmAction 1m-m3
TRUE-FALSE STATEMENTS m
1. Ownersmof mbusinessmfirmsmaremthemonly mpeoplemwhomneedmaccountingminformatio
n.
Ans: m F, m LO: m 1, m Bloom: mK, mDifficulty:m Easy,m Min: m 1,m AACSB: m None, m AICPAmBB: m Governancem Perspective, m AICPAm FC: m Reporting, m AICPAm PC:
m None, m IMA: m Reporting
2. Transactionsm thatm canm bem measuredm inm dollarsm andm centsm arem recordedm inm them financ
ialminformationmsystem.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
3. Them hiringm of m am newm company m presidentm ism anm economicm eventm recordedm by m them finan
cialminformationmsystem.
Ans: mF, mLO: m1, mBloom: mC, mDifficulty:mEasy,mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective,mAICPAmFC: mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
4. Managementmof mambusinessmenterprisemismthemmajormexternalmusermof minformation.
Ans: mF, mLO: m1, mBloom: mK,mDifficulty: mEasy, mMin: m1,mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
5. Accountingm communicatesm financialm informationm aboutm am businessm enterprisem tom both
m internalmandmexternalmusers.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
6. Accountingm informationm ism usedm only m by m externalm usersm withm am financialm interestm in
m ambusinessmenterprise.
Ans: mF, mLO: m1, mBloom: mC, mDifficulty:mEasy,mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective,mAICPAmFC: mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
7. Financialm statementsm arem them majorm meansm of m communicatingm accountingm informationm
tominterestedmparties.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1,mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
8. Bookkeepingm andmaccountingm aremonemandmthemsamem becausemthembookkeepingm functio
nmincludesmthemaccountingmprocess.
Ans: mF, mLO: m1, mBloom: mC, mDifficulty:mEasy,mMin: m1, mAACSB: mNone, mAICPAmBB: mGovernancemPerspective,mAICPAmFC: mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
9. Themoriginsmof maccountingmaremattributedmtomLucamPacioli,mamfamousmmathematician.
Ans: mT, mLO: m1, mBloom: mK, mDifficulty: mEasy, mMin: m1,mAACSB: mNone, mAICPAmBB: mGovernancemPerspective, mAICPAmFC:mMeasurement mAn
alysis mandm Interpretation, mAICPAmPC: mNone, mIMA: mReporting
FORmINSTRUCTORmUSEmONL
Y
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