An income statement presents the revenues and expenses, and resulting Net income or Net loss for a specific period of time. For example, if an individual asset increases, there must be a corresponding (1) decrease in another asset, or (2) increase in a specific liability, or (3) increase in owner's equity.Ĩ.Understand the four financial statements and how they are prepared. Each business transaction must have a dual effect on the accounting equation. Expenses are the costs of assets consumed of services used in the process of earning revenue.7.Analyze the effects of business transactions on the accounting equation. Revenues are increases in assets resulting from income-earning activities. Owner's drawings are the Assets the owner withdraws for personal use. Owner's Capital is assets the owner puts into the business. Owner's equity is the ownership claim on total assets.Īssets ( Liabilities + Owner's Capital ( Owner's Drawings + Revenues ( Expenses Liabilities are creditorship claims on total assets. The basic accounting equation is:Īssets are resources owned by a business. The economic entity assumption requires that the activities of each economic entity be kept separate from the activities of its owner(s) and other economic entities.Ħ.State the accounting equation, and define its components. The monetary unit assumption requires that companies include in the accounting records only transaction data that can be expressed in terms of money. Generally accepted accounting principles are a common set of standards used by accountants.ĥ.Explain the monetary unit assumption and the economic entity assumption. Effective financial reporting depends on sound ethical behavior.4.Explain generally accepted accounting principles. Ethics are the standards of conduct by which actions are judged as right or wrong. Other groups that use accounting information are taxing authorities, regulatory agencies, customers, and labor unions.ģ.Understand why ethics is a fundamental business concept. (c) Creditors (suppliers and bankers) evaluate the risks of granting credit or lending money on the basis of accounting information. (b) Investors (owners) decide whether to buy, hold, or sell their financial interests on the basis of accounting data. The major users and uses of accounting are as follows: (a) Management uses accounting information to plan, organize, and run the business. Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users.Ģ.Identify the users and uses of accounting.
ACCOUNTING PRINCIPLES 11TH EDITION.PDF PROFESSIONAL
A summary table of all learning outcomes, including AACSB, AICPA, and IMA professional standards, is available on the Weygandt Accounting Principles 11e instructor web site.CHAPTER LEARNING OBJECTIVESġ.Explain what accounting is. This chapter also contains one set of ten Matching questions and Short-Answer Essay questions. Note:TF=True-FalseBE=Brief ExerciseC=Completion SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPELearning Objective 6Ģ7.ġ64.ġ65. SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPEItemTypeItemTypeItemTypeItemTypeItemTypeItemTypeItemType StThis question also appears in a self-test at the student companion website.ĪThis question covers a topic in an appendix to the chapter. SgThis question also appears in the Study Guide. Summary of Questions by LEARNING Objectives and Blooms Taxonomy 1 - 4Test Bank for Accounting Principles, Eleventh Edition
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