TEST BANK s9 s9
Financial Accounting Tools For Business Decision
s9 s9 s9 s9 s9
s9 Making, 10th Edition, Paul D. Kimmel,
s9 s9 s9 s9 s9 s9
s9 Chapters 1 – 13, Complete s9 s9 s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
,TABLE OF CONTENTS S9 S9
1 Introduction to Financial Statements
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2 A Further Look at Financial Statements
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3 The Accounting Information System
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4 Accrual Accounting Concepts
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5 Merchandising Operations and the Multiple-Step Income Statement
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6 Reporting and Analyzing Inventory
s9 s9 s9 s9 s9
7 Fraud, Internal Control, and Cash
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8 Reporting and Analyzing Receivables
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9 Reporting and Analyzing Long-Lived Assets
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10 Reporting and Analyzing Liabilities
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11 Reporting and Analyzing Stockholders’ Equity
s9 s9 s9 s9 s9 s9
12 Statement of Cash Flows
s9 s9 s9 s9 s9
13 Financial Analysis: The Big Picture
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Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
,CHAPTER 1 s9
INTRODUCTION TO FINANCIAL STATEMENTS s9 s9 s9
CHAPTER LEARNING OBJECTIVES s9 s9
1. Identify the forms of business organization and the uses of accounting information. A sole
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
proprietorship is a business owned by one person. A partnership is a business owned by two
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
or more people associated as partners. A corporation is a separate legal entity for which
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
evidence of ownership is provided by shares of stock. Internal users are managers who need
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
accounting information to plan, organize, and run business operations. The primary external
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
users are investors and creditors. Investors (stockholders) use accounting information to decide
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
whether to buy, hold, or sell shares of a company‘s stock. Creditors (suppliers and bankers)
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
use accounting information to assess the risk of granting credit or loaning money to a
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 9
s
business. Other groups who have an indirect interest in a business are taxing authorities,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
customers, labor unions, and regulatory agencies.
s9 s9 s9 s9 s9 s9
2. Explain the three principal types of business activity. Financing activities involve collecting the
s9 s9 s9 s9 s9 s9 s9 s9 s9 s 9 s9 s9
necessary funds to support the business. Investing activities involve acquiring the resources
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
necessary to run the business. Operating activities involve putting the resources of the
s9 s9 s9 s9 s9 s9 s9 s9 s9 s 9 s9 s9 s9
business into action to generate a profit.
s9 s9 s9 s9 s9 s9 s9
3. Describe the four financial statements and how they are prepared. An income statement
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
presents the revenues and expenses of a company for a specific period of time. A retained
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
earnings statement summarizes the changes in retained earnings that have occurred for a
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
specific period of time. A balance sheet reports the assets, liabilities, and stockholders‘ equity
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
of a business at a specific date. A statement of cash flows summarizes information
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s 9 s 9
concerning the cash inflows (receipts) and outflows (payments) for a specific period of time.
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Assets are resources owned by a business. Liabilities are the debts and obligations of the
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
business. Liabilities represent claims of creditors on the assets of the business. Stockholders‘
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
equity represents the claims of owners on the assets of the business. Stockholders‘ equity is
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
subdivided into two parts: common stock and retained earnings. The basic accounting equation
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
is Assets = Liabilities + Stockholders‘ Equity. Within the annual report, the management
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
discussion and analysis provides management‘s interpretation of the company‘s results and
s9 s9 s9 s9 s9 s9 s9 s9 s9 9
s s9
financial position as well as a discussion of plans for the future. Notes to the financial
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
statements provide additional explanation or detail to make the financial statements more
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
informative. The auditor‘s report expresses an opinion as to whether the financial statements
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 9
s
present fairly the company‘s results of operations and financial position.
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
*4. Explain the career opportunities in accounting. Accounting offers many different jobs in fields
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
such as public and private accounting, governmental, and forensic accounting. Accounting is a
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
popular major because there are many different types of jobs, with unlimited potential for
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
career advancement
s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
, 2-2 Test Bank for Kimmel, Financial Accounting: Tools for Business Decision
s9 s9 s9 s9 s9 s9 s9 s9 s9
Making, 10e
s9 s9
Difficulties:
Easy: 143 s9
Medium: 101 s9
Hard: 12 s9
Question List by Section s9 s9 s9
Business Organization and Accounting Information
s9 s9 s9 s9
Uses:Forms of Business Organization; 47, 48, 202, 246
s9 9
s s9 s9 s9 s9 s9 s9 s9
Sole Proprietorship: 5, 44, 49, 58, 59
s9 s9 s9 s9 s9 s9
Partnership: 1, 4, 46, 56 s9 s9 s9 s9
Corporation: 2, 3, 45, 50, 51, 52, 53, 55, 57, 233, 245 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Hybrid Forms of Organization: 60, 61 s9 s9 s9 s9 s9
Users and Uses of Financial Information: 6, 7, 11, 74, 87
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Internal Users: 62, 63, 64, 75, 77, 82, 234 s9 s9 s9 s9 s9 s9 s9 s9
External Users: 8, 9, 10, 12, 65, 76, 78, 79, 80, 81, 83, 84, 85, 86, 88, 89
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Data Analytics: 66, 67, 68, 69, 70, 235, 236
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Ethics in Financial Reporting: 71, 72, 73, 237,
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255The Three Types of Business Activity: 97
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s s9 s9 s9 s9 s9 s9
Financing Activities: 13, 15, 18, 90, 91, 93, 94, 95, 96, 97, 102, 109, 117, 118, 119, 238
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Investing Activities: 14, 16, 98, 99, 115, 116
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Operating Activities: 17, 19, 20, 100, 101, 103, 104, 105, 106, 107, 108, 110, 111, 112, 113,
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114
The Four Financial Statements:
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Income Statement: 21, 22, 23, 24,127, 128, 132, 133, 134, 138, 142, 143
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Retained Earnings Statement: 120, 122, 123, 124, 125, 126, 129, 130, 131, 135, 137, 139, 140,
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141, 144, 145, 146, 147, 148, 149, 150, 154, 164, 169, 178, 181, 252
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Balance Sheet: 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 136, 151, 152, 153, 163, 165, 166, 168,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
170, 173, 177, 179, 180, 182, 185, 186, 187, 188, 199, 200, 201, 207, 208, 213, 214, 215, 216,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
217, 218, 219, 220, 221, 222, 225, 229, 239, 240, 241, 253
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Statement of Cash Flows: 26, 121, 171, 174, 183, 242, 249
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Interrelationships of Statements: 155, 156, 157, 158, 159, 160, 161, 162, 167, 175, 176, 184,
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250, 251, 256
s9 s9
Elements of an Annual Report: 36, 41, 192, 196, 197
s9 s9 s9 s9 s9 s9 s9 s9 s9
Management Discussion and Analysis: 40, 191 s9 s9 s9 s9 s9
Notes to the Financial Statements: 37, 42, 190, 193, 194, 198, 254
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Auditor‘s Report: 38, 39, 195 s9 s9 s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
s9
Financial Accounting Tools For Business Decision
s9 s9 s9 s9 s9
s9 Making, 10th Edition, Paul D. Kimmel,
s9 s9 s9 s9 s9 s9
s9 Chapters 1 – 13, Complete s9 s9 s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
,TABLE OF CONTENTS S9 S9
1 Introduction to Financial Statements
s9 s9 s9 s9 s9
2 A Further Look at Financial Statements
s9 s9 s9 s9 s9 s9 s9
3 The Accounting Information System
s9 s9 s9 s9 s9
4 Accrual Accounting Concepts
s9 s9 s9 s9
5 Merchandising Operations and the Multiple-Step Income Statement
s9 s9 s9 s9 s9 s9 s9 s9
6 Reporting and Analyzing Inventory
s9 s9 s9 s9 s9
7 Fraud, Internal Control, and Cash
s9 s9 s9 s9 s9 s9
8 Reporting and Analyzing Receivables
s9 s9 s9 s9 s9
9 Reporting and Analyzing Long-Lived Assets
s9 s9 s9 s9 s9 s9
10 Reporting and Analyzing Liabilities
s9 s9 s9 s9 s9
11 Reporting and Analyzing Stockholders’ Equity
s9 s9 s9 s9 s9 s9
12 Statement of Cash Flows
s9 s9 s9 s9 s9
13 Financial Analysis: The Big Picture
s9 s9 s9 s9 s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
,CHAPTER 1 s9
INTRODUCTION TO FINANCIAL STATEMENTS s9 s9 s9
CHAPTER LEARNING OBJECTIVES s9 s9
1. Identify the forms of business organization and the uses of accounting information. A sole
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
proprietorship is a business owned by one person. A partnership is a business owned by two
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
or more people associated as partners. A corporation is a separate legal entity for which
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
evidence of ownership is provided by shares of stock. Internal users are managers who need
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
accounting information to plan, organize, and run business operations. The primary external
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
users are investors and creditors. Investors (stockholders) use accounting information to decide
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
whether to buy, hold, or sell shares of a company‘s stock. Creditors (suppliers and bankers)
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
use accounting information to assess the risk of granting credit or loaning money to a
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 9
s
business. Other groups who have an indirect interest in a business are taxing authorities,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
customers, labor unions, and regulatory agencies.
s9 s9 s9 s9 s9 s9
2. Explain the three principal types of business activity. Financing activities involve collecting the
s9 s9 s9 s9 s9 s9 s9 s9 s9 s 9 s9 s9
necessary funds to support the business. Investing activities involve acquiring the resources
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
necessary to run the business. Operating activities involve putting the resources of the
s9 s9 s9 s9 s9 s9 s9 s9 s9 s 9 s9 s9 s9
business into action to generate a profit.
s9 s9 s9 s9 s9 s9 s9
3. Describe the four financial statements and how they are prepared. An income statement
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
presents the revenues and expenses of a company for a specific period of time. A retained
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
earnings statement summarizes the changes in retained earnings that have occurred for a
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
specific period of time. A balance sheet reports the assets, liabilities, and stockholders‘ equity
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
of a business at a specific date. A statement of cash flows summarizes information
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s 9 s 9
concerning the cash inflows (receipts) and outflows (payments) for a specific period of time.
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Assets are resources owned by a business. Liabilities are the debts and obligations of the
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
business. Liabilities represent claims of creditors on the assets of the business. Stockholders‘
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
equity represents the claims of owners on the assets of the business. Stockholders‘ equity is
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
subdivided into two parts: common stock and retained earnings. The basic accounting equation
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
is Assets = Liabilities + Stockholders‘ Equity. Within the annual report, the management
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
discussion and analysis provides management‘s interpretation of the company‘s results and
s9 s9 s9 s9 s9 s9 s9 s9 s9 9
s s9
financial position as well as a discussion of plans for the future. Notes to the financial
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
statements provide additional explanation or detail to make the financial statements more
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
informative. The auditor‘s report expresses an opinion as to whether the financial statements
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 9
s
present fairly the company‘s results of operations and financial position.
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
*4. Explain the career opportunities in accounting. Accounting offers many different jobs in fields
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
such as public and private accounting, governmental, and forensic accounting. Accounting is a
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
popular major because there are many different types of jobs, with unlimited potential for
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
career advancement
s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
, 2-2 Test Bank for Kimmel, Financial Accounting: Tools for Business Decision
s9 s9 s9 s9 s9 s9 s9 s9 s9
Making, 10e
s9 s9
Difficulties:
Easy: 143 s9
Medium: 101 s9
Hard: 12 s9
Question List by Section s9 s9 s9
Business Organization and Accounting Information
s9 s9 s9 s9
Uses:Forms of Business Organization; 47, 48, 202, 246
s9 9
s s9 s9 s9 s9 s9 s9 s9
Sole Proprietorship: 5, 44, 49, 58, 59
s9 s9 s9 s9 s9 s9
Partnership: 1, 4, 46, 56 s9 s9 s9 s9
Corporation: 2, 3, 45, 50, 51, 52, 53, 55, 57, 233, 245 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Hybrid Forms of Organization: 60, 61 s9 s9 s9 s9 s9
Users and Uses of Financial Information: 6, 7, 11, 74, 87
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Internal Users: 62, 63, 64, 75, 77, 82, 234 s9 s9 s9 s9 s9 s9 s9 s9
External Users: 8, 9, 10, 12, 65, 76, 78, 79, 80, 81, 83, 84, 85, 86, 88, 89
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Data Analytics: 66, 67, 68, 69, 70, 235, 236
s9 s9 s9 s9 s9 s9 s9 s9
Ethics in Financial Reporting: 71, 72, 73, 237,
s9 s9 s9 s9 s9 s9 s9
255The Three Types of Business Activity: 97
s9 9
s s9 s9 s9 s9 s9 s9
Financing Activities: 13, 15, 18, 90, 91, 93, 94, 95, 96, 97, 102, 109, 117, 118, 119, 238
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Investing Activities: 14, 16, 98, 99, 115, 116
s9 s9 s9 s9 s9 s9 s9
Operating Activities: 17, 19, 20, 100, 101, 103, 104, 105, 106, 107, 108, 110, 111, 112, 113,
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114
The Four Financial Statements:
s9 s9 s9
Income Statement: 21, 22, 23, 24,127, 128, 132, 133, 134, 138, 142, 143
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Retained Earnings Statement: 120, 122, 123, 124, 125, 126, 129, 130, 131, 135, 137, 139, 140,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
141, 144, 145, 146, 147, 148, 149, 150, 154, 164, 169, 178, 181, 252
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Balance Sheet: 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 136, 151, 152, 153, 163, 165, 166, 168,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
170, 173, 177, 179, 180, 182, 185, 186, 187, 188, 199, 200, 201, 207, 208, 213, 214, 215, 216,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
217, 218, 219, 220, 221, 222, 225, 229, 239, 240, 241, 253
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Statement of Cash Flows: 26, 121, 171, 174, 183, 242, 249
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Interrelationships of Statements: 155, 156, 157, 158, 159, 160, 161, 162, 167, 175, 176, 184,
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
250, 251, 256
s9 s9
Elements of an Annual Report: 36, 41, 192, 196, 197
s9 s9 s9 s9 s9 s9 s9 s9 s9
Management Discussion and Analysis: 40, 191 s9 s9 s9 s9 s9
Notes to the Financial Statements: 37, 42, 190, 193, 194, 198, 254
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Auditor‘s Report: 38, 39, 195 s9 s9 s9 s9
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use
s9 s9 s9 s9 s9 s9 s9 s9 s9 s9
Only)
s9
