TESTBANK
Accounting Principles 14th Edition
by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 27, Complete
,TABLE OF CONTENTSj j
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 j
ACCOUNTING IN ACTION j j
CHAPTER LEARNING OBJECTIVES
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1. Identifyjthejactivitiesjandjusersjassociatedjwithjaccounting.jAccountingjisjanjinformationjsystemjthatjide
ntifies,jrecords,jandjcommunicatesjthejeconomicjeventsjofjanjorganizationjtojinterestedjusers.jThejmajorj
usersjandjusesjofjaccountingjarejasjfollows:j(a)jManagementjusesjaccountingjinformationjtojplan,jorganiz
e,jandjrunjthejbusiness.j(b)jInvestorsj(owners)jdecidejwhetherjtojbuy,jhold,jorjselljtheirjfinancialjinterestsj
onjthejbasisjofjaccountingjdata.j(c)jCreditorsj(suppliersjandjbankers)jevaluatejthejrisksjofjgrantingjcreditjorj
lendingj moneyj onjthejbasisjofjaccountingjinformation.jOtherjgroupsjthatjusejaccountingjinformationjare
jtaxingjauthorities,jregulatoryjagencies,jcustomers,j andjlaborjunions.
2. Explainjthejbuildingjblocksjofjaccounting:jethics,jprinciples,jandjassumptions.jEthicsjarejthejstandardsjof
jconductjbyjwhichjactionsjarejjudgedjasjrightjorjwrong.jEffectivejfinancialjreportingjdependsjonj soundjethi
caljbehavior.
Generallyjacceptedjaccountingjprinciplesjarejajcommonjsetjofjstandardsjusedjbyjaccountants.jThejprimar
yjaccountingjstandard-settingjbodyjinjthejUnitedjStatesjisjthejFinancialjAccountingjStandardsjBoard.
3. Statejthejaccountingjequation,jandjdefinejitsjcomponents.jThejbasicj accountingjequationjis:
Assetsj=jLiabilitiesj+jOwner'sjEquity
Assetsj arej resourcesj aj businessj owns.j Liabilitiesj arej creditorshipj claimsj onj totalj assets.jOwner'sjequityjisj
thejownershipjclaimjonjtotaljassets.
Thejexpandedjaccountingjequationjis:
Assetsj jLiabilitiesj+jOwner'sjCapitalj jOwner'sjDrawingsj+jRevenuesj
Expenses
Investmentsjbyjownersj(assetsjthejownerjputsjintojthejbusiness)jarejrecordedjinjajcategoryjcalledjowner‘sj
capital.jOwner‘sjdrawingsjarejthejwithdrawaljofjassetsjbyjthejownerjforjpersonaljuse.jRevenuesjarejthejgr
ossjincreasejinjowner‘sjequityjfromjbusinessjactivitiesjforjthejpurposejofjearningjincome.jExpensesjarejthe
jcostsjofjassetsjconsumedjorjservicesjusedjinj thej processj ofj earningj revenue.j Owner‘sj equityj isj increase
dj byj anj owner‘sj investmentsjandjbyjrevenuesjfromjbusinessjoperations.jOwner‘sjequityjisjdecreasedjbyja
njowner‘sjwithdrawalsjofjassetsjandjbyjexpenses.
4. Analyzejthejeffectsjofjbusinessjtransactionsjonjthejaccountingjequation.jEachjbusinessjtransactionjmustj
havejajdualjeffectjonjthejaccountingjequation.jForjexample,jifjanjindividualjassetjincreases,jtherejmustjbej
ajcorrespondingj(1)jdecreasejinjanotherjasset,jorj(2)jincreasejinjajspecificjliability,jorj(3)jincreasejinjowner'
sjequity.
5. Describejthejfourjfinancialjstatementsjandjhowjtheyjarejprepared.jAnjincomejstatementjpresentsjthejre
venuesjandjexpenses,jandjresultingjnetjincomejorjnetj lossjforjaj specificjperiodjofjtime.jAnjowner'sjequityj
statementjsummarizesjthejchangesjinjowner'sjequityjforjajspecificjperiodjofjtime.jAjbalancejsheetjreportsj
thejassets,jliabilities,jandjowner'sjequityjatjajspecificjdate.jAjstatementjofjcashjflowsjsummarizesjinformat
ionjaboutjthejcashjinflowsj(receipts)jandjoutflowsj(payments)jforjajspecificjperiodjofjtime.
