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