TEST BANK For Accounting Principles, 14th Edition by Jerry J. Weygandt, Paul D. Kimmel, Verified Chapters 1 - 27, Complete Newest Version

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

,TABLE OF CONTENTS EK EK




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 Asset
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s

11 Current Liabilities and Payroll Accounting
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12 Accounting for Partnerships
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13 Corporations: Organization and Capital Stock Transac
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tions

14 Corporations: Dividends, Retained Earnings, and Inco
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me Reporting
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,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 E K




ACCOUNTING IN ACTION EK EK




CHAPTER LEARNING OBJECTIVES EK EK




1. Identify the activities and users associated with accounting. Accounting is an information syst
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em 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 in
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formation to plan, organize, and run the business. (b) Investors (owners) decide whether to buy, h
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old, or sell their financial interests on the basis of accounting data. (c)Creditors (suppliers and ban
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kers) evaluate the risks of granting credit or lending money on the basis of accounting informa
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tion. Other groups that use accounting information are taxing authorities, regulatory agencies, cus
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tomers, and labor unions. EK EK EK




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. The
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primary accounting standard-
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setting body in the United States is the Financial Accounting Standards Board.
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3. State the accounting equation, and define its components. The basic accounting equation is:
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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 assets.Ow
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ner's equity is the ownership claim on total assets.
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The expanded accounting equation is:
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Assets EK EK Liabilities + Owner's Capital EK EK EK EK EK Owner's Drawings + Revenues EK EK EK EK



Expenses
Investments by owners (assets the owner puts into the business) are recorded in a category called
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Kowner‘s capital. Owner‘s drawings are the withdrawal of assets by the owner for personal use. Re
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venues are the gross increase in owner‘s equity from business activities for the purpose of earning
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income. Expenses are the costs of assets consumed or services used in the process of earning
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revenue. Owner‘s equity is increased by an owner‘s investmentsand by revenues from busine
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ss operations. Owner‘s equity is decreased by an owner‘s withdrawals of assets and by expenses.
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4. Analyze the effects of business transactions on the accounting equation. Each businesstransac
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tion must have a dual effect on the accounting equation. For example, if an individual asset increa
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ses, there must be a corresponding (1) decrease in another asset, or (2) increase in a specific liabili
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ty, 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 prese
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nts the revenues and expenses, and resulting net income or net loss for a specific period of tim
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e. An owner's equity statement summarizes the changes in owner's equity for a specific period of t
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ime. A balance sheet reports the assets, liabilities, and owner's equity at a specific date. A stateme
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nt of cash flows summarizes information about the cash inflows (receipts) and outflows (payments)
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for a specific period of time.
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