TESTBANK
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete
,TABLE OF CONTENTSq q
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 Assets
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11 Current Liabilities and Payroll Accounting
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12 Accounting for Partnerships
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13 Corporations: Organization and Capital Stock Transactions
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14 Corporations: Dividends, Retained Earnings, and Income R
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eporting
,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 q
ACCOUNTING IN ACTION q q
CHAPTERqLEARNINGqOBJECTIVES
1. Identifyqtheqactivitiesqandqusersqassociatedqwithqaccounting.qAccountingqisqanqinformationqsystemqt
hatqidentifies,qrecords,qandqcommunicatesqtheqeconomicqeventsqofqanqorganizationqtoqinterestedquser
s.qTheqmajorqusersqandqusesqofqaccountingqareqasqfollows:q(a)qManagementqusesqaccountingqinformat
ionqtoqplan,qorganize,qandqrunqtheqbusiness.q(b)qInvestorsq(owners)qdecideqwhetherqtoqbuy,qhold,qorqs
ellqtheirqfinancialqinterestsqonqtheqbasisqofqaccountingqdata.q(c)qCreditorsq(suppliersqandqbankers)qeval
uateqtheqrisksqofqgrantingqcreditqorqlendingq moneyq onqtheqbasisqofqaccountingqinformation.qOtherqgr
oupsqthatquseqaccountingqinformationqareqtaxingqauthorities,qregulatoryqagencies,qcustomers,qandqlab
orqunions.
2. Explainqtheqbuildingqblocksqofqaccounting:qethics,qprinciples,qandqassumptions.qEthicsqareqtheqstanda
rdsqofqconductqbyqwhichqactionsqareqjudgedqasqrightqorqwrong.qEffectiveqfinancialqreportingqdependsq
onqsoundqethicalqbehavior.
Generallyqacceptedqaccountingqprinciplesqareqaqcommonqsetqofqstandardsqusedqbyqaccountants.qTheq
primaryqaccountingqstandard-
settingqbodyqinqtheqUnitedqStatesqisqtheqFinancialqAccountingqStandardsqBoard.
3. Stateqtheqaccountingqequation,qandqdefineqitsqcomponents.qTheqbasicq accountingqequationqis:
Assetsq=qLiabilitiesq+qOwner'sqEquity
Assetsq areq resourcesq aq businessq owns.q Liabilitiesq areq creditorshipq claimsq onq totalq assets.qOwner'sqeq
uityqisqtheqownershipqclaimqonqtotalqassets.
Theqexpandedqaccountingqequationqis:
Assetsq qLiabilitiesq+qOwner'sqCapitalq qOwner'sqDrawingsq+qRevenuesq
Expenses
Investmentsqbyqownersq(assetsqtheqownerqputsqintoqtheqbusiness)qareqrecordedqinqaqcategoryqcalledqo
wner‘sqcapital.qOwner‘sqdrawingsqareqtheqwithdrawalqofqassetsqbyqtheqownerqforqpersonalquse.qReven
uesqareqtheqgrossqincreaseqinqowner‘sqequityqfromqbusinessqactivitiesqforqtheqpurposeqofqearningqinco
me.qExpensesqareqtheqcostsqofqassetsqconsumedqorqservicesqusedqinq theq processq ofq earningq revenue
.q Owner‘sq equityq isq increasedq byq anq owner‘sq investmentsqandqbyqrevenuesqfromqbusinessqoperation
s.qOwner‘sqequityqisqdecreasedqbyqanqowner‘sqwithdrawalsqofqassetsqandqbyqexpenses.
4. Analyzeqtheqeffectsqofqbusinessqtransactionsqonqtheqaccountingqequation.qEachqbusinessqtransactionq
mustqhaveqaqdualqeffectqonqtheqaccountingqequation.qForqexample,qifqanqindividualqassetqincreases,qth
ereqmustqbeqaqcorrespondingq(1)qdecreaseqinqanotherqasset,qorq(2)qincreaseqinqaqspecificqliability,qorq(
3)qincreaseqinqowner'sqequity.
5. Describeqtheqfourqfinancialqstatementsqandqhowqtheyqareqprepared.qAnqincomeqstatementqpresentsq
theqrevenuesqandqexpenses,qandqresultingqnetqincomeqorqnetq lossqforqaq specificqperiodqofqtime.qAnqo
wner'sqequityqstatementqsummarizesqtheqchangesqinqowner'sqequityqforqaqspecificqperiodqofqtime.qAqb
alanceqsheetqreportsqtheqassets,qliabilities,qandqowner'sqequityqatqaqspecificqdate.qAqstatementqofqcash
qflowsqsummarizesqinformationqaboutqtheqcashqinflowsq(receipts)qandqoutflowsq(payments)qforqaq spec
ificqperiodqofqtime.
