TESTBANK
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
all Chapters 1-27, Complete
,TABLE OF CONTENTSz z
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 Re
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porting
,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 z
ACCOUNTING IN ACTION z z
CHAPTER LEARNING OBJECTIVES
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1. Identifyzthezactivitieszandzuserszassociatedzwithzaccounting.zAccountingziszanzinformationzsystemzthatzi
dentifies,zrecords,zandzcommunicateszthezeconomiczeventszofzanzorganizationztozinterestedzusers.zThez
majorzuserszandzuseszofzaccountingzarezaszfollows:z(a)zManagementzuseszaccountingzinformationztozplan
,zorganize,zandzrunzthezbusiness.z(b)zInvestorsz(owners)zdecidezwhetherztozbuy,zhold,zorzsellztheirzfinanci
alzinterestszonzthezbasiszofzaccountingzdata.z(c)zCreditorsz(supplierszandzbankers)zevaluatezthezriskszofzgra
ntingzcreditzorzlendingz moneyz onzthezbasiszofzaccountingzinformation.zOtherzgroupszthatzusezaccountin
gzinformationzareztaxingzauthorities,zregulatoryzagencies,zcustomers,zandzlaborzunions.
2. Explainzthezbuildingzblockszofzaccounting:zethics,zprinciples,zandzassumptions.zEthicszarezthezstandards
zofzconductzbyzwhichzactionszarezjudgedzaszrightzorzwrong.zEffectivezfinancial zreportingzdependsz onz soun
dzethicalzbehavior.
Generallyzacceptedzaccountingzprincipleszarezazcommonzsetzofzstandardszusedzbyzaccountants.zThezpri
maryzaccountingzstandard-
settingzbodyzinzthezUnitedzStatesziszthezFinancialzAccountingzStandardszBoard.
3. Statezthezaccountingzequation,zandzdefinezitszcomponents.zThezbasicz accountingzequationzis:
Assetsz=zLiabilitiesz+zOwner'szEquity
Assetsz arez resourcesz az businessz owns.z Liabilitiesz arez creditorshipz claimsz onz totalz assets.zOwner'szequityz
iszthezownershipzclaimzonztotalzassets.
Thezexpandedzaccountingzequationzis:
Assetsz zLiabilitiesz+zOwner'szCapitalz zOwner'szDrawingsz+zRevenuesz
Expenses
Investmentszbyzownersz(assetszthezownerzputszintozthezbusiness)zarezrecordedzinzazcategoryzcalledzown
er‘szcapital.zOwner‘szdrawingszarezthezwithdrawalzofzassetszbyzthezownerzforzpersonalzuse.zRevenueszare
zthezgrosszincreasezinzowner‘szequityzfromzbusinesszactivitieszforzthezpurposezofzearningzincome. zExpens
eszarezthezcostszofzassetszconsumedzorzserviceszusedzinz thez processz ofz earningz revenue.z Owner‘sz equit
yz isz increasedz byz anz owner‘sz investmentszandzbyzrevenueszfromzbusinesszoperations.zOwner‘szequityzis
zdecreasedzbyzanz owner‘szwithdrawalszofz assetszandzbyzexpenses.
4. Analyzezthezeffectszofzbusinessztransactionszonzthezaccountingzequation.zEachzbusinessztransactionzmu
stzhavezazdualzeffectzonzthezaccountingzequation.zForzexample,zifzanzindividualzassetzincreases,ztherezmu
stzbezazcorrespondingz(1)zdecreasezinzanotherzasset,zorz(2)zincreasezinzazspecificzliability,zorz(3)zincreasezi
nzowner'szequity.
5. Describezthezfourzfinancialzstatementszandzhowztheyzarezprepared.zAnzincomezstatementzpresentszthez
revenueszandzexpenses,zandzresultingznetzincomezorznetz losszforzaz specificzperiodzofztime.zAnzowner'sze
quityzstatementzsummarizeszthezchangeszinzowner'szequityzforzazspecificzperiodzofztime.zAzbalancezsheet
zreportszthezassets,zliabilities, zandzowner'szequityzatzazspecificzdate.zAzstatementzofzcashzflowszsummariz
eszinformationzaboutzthezcashzinflowsz(receipts)zandzoutflowsz(payments)zforzazspecificzperiodzofztime.
