TEST BANK
Financial Accounting Tools For Business Decision Making
10th Edition by Kimmel,
Chapters 1 – 13, Complete
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
,TABLE OF CONTENTS G G
1 Introduction to Financial Statements
g g g g g
2 A Further Look at Financial Statements
g g g g g g g
3 The Accounting Information System
g g g g g
4 Accrual Accounting Concepts
g g g g
5 Merchandising Operations and the Multiple-Step Income Statement
g g g g g g g g
6 Reporting and Analyzing Inventory
g g g g g
7 Fraud, Internal Control, and Cash
g g g g g g
8 Reporting and Analyzing Receivables
g g g g g
9 Reporting and Analyzing Long-Lived Assets
g g g g g g
10 Reporting and Analyzing Liabilities
g g g g g
11 Reporting and Analyzing Stockholders’ Equity
g g g g g g
12 Statement of Cash Flows
g g g g g
13 Financial Analysis: The Big Picture
g g g g g g
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
,CHAPTER 1 g
INTRODUCTION TO FINANCIAL STATEMENTS
g g g
CHAPTER LEARNING OBJECTIVES
g g
1. Identifygthegformsgofgbusinessgorganizationgandgthegusesgofgaccountingginformation.gAgsolegproprietors
hipgisgagbusinessgownedgbygonegperson.gAgpartnershipgisgagbusinessgownedgbygtwogorgmoregpeoplegassocia
tedgasgpartners.gAgcorporationgisgagseparateglegalgentitygforgwhichgevidencegofgownershipgisgprovidedgbygs
haresgofgstock.gInternalgusersgaregmanagersgwhogneedgaccountingginformationgtogplan,gorganize,gandgrungb
usinessgoperations.gThegprimarygexternalgusersgareginvestorsgandgcreditors.gInvestorsg(stockholders)gusega
ccountingginformationgtogdecidegwhethergtogbuy,ghold,gorgsellgsharesgofgagcompany‘sgstock.gCreditorsg(su
ppliersgandgbankers)g usegaccountingginformationg tog assessgtheg riskg ofg grantingg creditgorg loaningg moneygt
ogagbusiness.gOtherggroupsgwhoghavegangindirectginterestgingagbusinessgaregtaxinggauthorities,gcustomers,gl
aborgunions,gandg regulatorygagencies.
2. Explaingthegthreegprincipalgtypesgofgbusinessgactivity.gFinancinggactivitiesg involvegcollectinggthegneces
sarygfundsgtogsupportgthegbusiness.gInvestinggactivitiesginvolvegacquiringgthegresourcesgnecessarygtogrungt
hegbusiness.gOperatinggactivitiesginvolvegputtingg thegresourcesgofg thegbusinessgintogactiongtoggenerategagp
rofit.
3. Describegthegfourgfinancialgstatementsgandghowgtheygaregprepared.gAngincomegstatementgpresentsgthegr
evenuesgandgexpensesgofgagcompanygforgagspecificgperiodgofgtime.gAgretainedgearningsgstatementgsummar
izesgthegchangesgingretainedgearningsgthatghavegoccurredgforgagspecificgperiodgofgtime.gAgbalancegsheetgre
portsgthegassets,gliabilities,gandgstockholders‘gequitygofgagbusinessgatgagspecificgdate.gAgstatementgofgcashg
flowsg summarizesg informationgconcerninggthegcashginflowsg(receipts)gandgoutflowsg(payments)gforgagsp
ecificgperiodgofgtime. gAssetsgaregresourcesgownedgbygagbusiness.gLiabilitiesgaregthegdebtsgandgobligationsg
ofgthegbusiness.gLiabilitiesgrepresentgclaimsgofgcreditorsgongthegassetsgofgthegbusiness.gStockholders‘gequit
ygrepresentsgthegclaimsgofgownersgongthegassetsgofgthegbusiness.gStockholders‘gequitygisgsubdividedgintogt
wogparts:gcommongstockgandgretainedgearnings.gThegbasicgaccountinggequationgisgAssetsg=gLiabilitiesg+gS
tockholders‘gEquity.gWithingthegannualgreport,gthegmanagementgdiscussiongandganalysisgprovidesgmanag
ement‘sginterpretationgofgthegcompany‘sgresultsgandgfinancialgpositiongasgwellgasgagdiscussiongofgplansgforg
thegfuture.gNotesgtogthegfinancialgstatementsgprovidegadditionalgexplanationgorgdetailgtogmakegthegfinancia
lgstatementsgmoreginformative. gThegauditor‘sgreportgexpressesgangopiniongasgtogwhethergthegfinancialgstate
mentsgpresentgfairlygthegcompany‘sgresultsgofg operationsgandgfinancialgposition.
*4.gExplaingthegcareergopportunitiesgingaccounting.gAccountinggoffersgmanygdifferentgjobsgingfieldsgsuchgasg
publicgandgprivategaccounting,ggovernmental,gandgforensicgaccounting.gAccountinggisgagpopulargmajorgbe
causegtheregaregmanygdifferentgtypesgofgjobs,gwithgunlimitedgpotentialgforgcareergadvancement
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
, 2-2 Testg BankgforgKimmel,gFinancialgAccounting:gToolsgforgBusinessgDecisiongMaking,g 10e
Difficulties:
Easy:g143
Medium:g101
Hard:g12
Question List by Section
g g g
BusinessgOrganizationgandgAccountinggInformationgUses:gForm
sgofgBusinessgOrganization; g47,g48,g202,g246
SolegProprietorship:g5,g44,g49,g58,g59
Partnership:g1,g4,g46,g56
Corporation:g2,g3,g45,g50,g51,g52,g53,g55,g57,g233,g245
HybridgFormsgofgOrganization:g60,g61
Usersgandg UsesgofgFinancialgInformation:g6,g7,g11,g74,g87
InternalgUsers:g62,g63,g64,g75,g77,g82,g234
ExternalgUsers:g8,g9,g10,g12,g65,g76,g78,g79,g80,g81,g83,g84,g85,g86,g88,g89
DatagAnalytics:g66,g67,g68,g69,g70,g235,g236
EthicsgingFinancialgReporting:g71,g72,g73,g237,g255gTheg
ThreegTypesgofgBusinessgActivity:g97
FinancinggActivities:g13,g15,g18,g90,g91,g93,g94,g95,g96,g97,g102,g109,g117,g118,g119,g238
InvestinggActivities:g14, g16,g98,g99,g115,g116
Operatingg Activities:g17,g19,g20,g100,g101,g103,g104,g105,g106,g107,g108,g110,g111,g112,g113,
114
ThegFourgFinancialgStatements:
IncomegStatement:g21,g22,g23,g24,127,g128,g132,g133,g134,g138,g142,g143
RetainedgEarningsgStatement:g120,g122,g123,g 124,g125,g126,g129,g130,g131,g135,g137,g139,g140,
141,g144,g145,g146,g147,g148,g149,g150,g154,g164,g169,g178,g181,g252
BalancegSheet:g25,g27,g28,g29,g30,g31,g32,g33,g34,g35,g136,g151,g152,g153,g163,g165,g166,g168,
170,g173,g177,g179,g180,g182,g185,g186,g187,g188,g199,g200,g201,g207,g208,g213,g214,g215,g216,
217,g218,g219,g220,g221,g222,g225,g229,g239,g240,g241,g253
StatementgofgCashgFlows:g26,g121,g171,g174,g183,g242,g249
InterrelationshipsgofgStatements:g155,g156,g157,g158,g159,g160,g161,g162,g167,g175,g176,g184,
250,g251,g256
ElementsgofgangAnnualgReport:g36,g41,g192,g196,g197
ManagementgDiscussiongandgAnalysis:g40,g191
NotesgtogthegFinancialgStatements:g37,g42,g190,g193,g194,g198,g254
Auditor‘sgReport:g38,g39,g195
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
Financial Accounting Tools For Business Decision Making
10th Edition by Kimmel,
Chapters 1 – 13, Complete
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
,TABLE OF CONTENTS G G
1 Introduction to Financial Statements
g g g g g
2 A Further Look at Financial Statements
g g g g g g g
3 The Accounting Information System
g g g g g
4 Accrual Accounting Concepts
g g g g
5 Merchandising Operations and the Multiple-Step Income Statement
g g g g g g g g
6 Reporting and Analyzing Inventory
g g g g g
7 Fraud, Internal Control, and Cash
g g g g g g
8 Reporting and Analyzing Receivables
g g g g g
9 Reporting and Analyzing Long-Lived Assets
g g g g g g
10 Reporting and Analyzing Liabilities
g g g g g
11 Reporting and Analyzing Stockholders’ Equity
g g g g g g
12 Statement of Cash Flows
g g g g g
13 Financial Analysis: The Big Picture
g g g g g g
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
,CHAPTER 1 g
INTRODUCTION TO FINANCIAL STATEMENTS
g g g
CHAPTER LEARNING OBJECTIVES
g g
1. Identifygthegformsgofgbusinessgorganizationgandgthegusesgofgaccountingginformation.gAgsolegproprietors
hipgisgagbusinessgownedgbygonegperson.gAgpartnershipgisgagbusinessgownedgbygtwogorgmoregpeoplegassocia
tedgasgpartners.gAgcorporationgisgagseparateglegalgentitygforgwhichgevidencegofgownershipgisgprovidedgbygs
haresgofgstock.gInternalgusersgaregmanagersgwhogneedgaccountingginformationgtogplan,gorganize,gandgrungb
usinessgoperations.gThegprimarygexternalgusersgareginvestorsgandgcreditors.gInvestorsg(stockholders)gusega
ccountingginformationgtogdecidegwhethergtogbuy,ghold,gorgsellgsharesgofgagcompany‘sgstock.gCreditorsg(su
ppliersgandgbankers)g usegaccountingginformationg tog assessgtheg riskg ofg grantingg creditgorg loaningg moneygt
ogagbusiness.gOtherggroupsgwhoghavegangindirectginterestgingagbusinessgaregtaxinggauthorities,gcustomers,gl
aborgunions,gandg regulatorygagencies.
2. Explaingthegthreegprincipalgtypesgofgbusinessgactivity.gFinancinggactivitiesg involvegcollectinggthegneces
sarygfundsgtogsupportgthegbusiness.gInvestinggactivitiesginvolvegacquiringgthegresourcesgnecessarygtogrungt
hegbusiness.gOperatinggactivitiesginvolvegputtingg thegresourcesgofg thegbusinessgintogactiongtoggenerategagp
rofit.
3. Describegthegfourgfinancialgstatementsgandghowgtheygaregprepared.gAngincomegstatementgpresentsgthegr
evenuesgandgexpensesgofgagcompanygforgagspecificgperiodgofgtime.gAgretainedgearningsgstatementgsummar
izesgthegchangesgingretainedgearningsgthatghavegoccurredgforgagspecificgperiodgofgtime.gAgbalancegsheetgre
portsgthegassets,gliabilities,gandgstockholders‘gequitygofgagbusinessgatgagspecificgdate.gAgstatementgofgcashg
flowsg summarizesg informationgconcerninggthegcashginflowsg(receipts)gandgoutflowsg(payments)gforgagsp
ecificgperiodgofgtime. gAssetsgaregresourcesgownedgbygagbusiness.gLiabilitiesgaregthegdebtsgandgobligationsg
ofgthegbusiness.gLiabilitiesgrepresentgclaimsgofgcreditorsgongthegassetsgofgthegbusiness.gStockholders‘gequit
ygrepresentsgthegclaimsgofgownersgongthegassetsgofgthegbusiness.gStockholders‘gequitygisgsubdividedgintogt
wogparts:gcommongstockgandgretainedgearnings.gThegbasicgaccountinggequationgisgAssetsg=gLiabilitiesg+gS
tockholders‘gEquity.gWithingthegannualgreport,gthegmanagementgdiscussiongandganalysisgprovidesgmanag
ement‘sginterpretationgofgthegcompany‘sgresultsgandgfinancialgpositiongasgwellgasgagdiscussiongofgplansgforg
thegfuture.gNotesgtogthegfinancialgstatementsgprovidegadditionalgexplanationgorgdetailgtogmakegthegfinancia
lgstatementsgmoreginformative. gThegauditor‘sgreportgexpressesgangopiniongasgtogwhethergthegfinancialgstate
mentsgpresentgfairlygthegcompany‘sgresultsgofg operationsgandgfinancialgposition.
*4.gExplaingthegcareergopportunitiesgingaccounting.gAccountinggoffersgmanygdifferentgjobsgingfieldsgsuchgasg
publicgandgprivategaccounting,ggovernmental,gandgforensicgaccounting.gAccountinggisgagpopulargmajorgbe
causegtheregaregmanygdifferentgtypesgofgjobs,gwithgunlimitedgpotentialgforgcareergadvancement
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
, 2-2 Testg BankgforgKimmel,gFinancialgAccounting:gToolsgforgBusinessgDecisiongMaking,g 10e
Difficulties:
Easy:g143
Medium:g101
Hard:g12
Question List by Section
g g g
BusinessgOrganizationgandgAccountinggInformationgUses:gForm
sgofgBusinessgOrganization; g47,g48,g202,g246
SolegProprietorship:g5,g44,g49,g58,g59
Partnership:g1,g4,g46,g56
Corporation:g2,g3,g45,g50,g51,g52,g53,g55,g57,g233,g245
HybridgFormsgofgOrganization:g60,g61
Usersgandg UsesgofgFinancialgInformation:g6,g7,g11,g74,g87
InternalgUsers:g62,g63,g64,g75,g77,g82,g234
ExternalgUsers:g8,g9,g10,g12,g65,g76,g78,g79,g80,g81,g83,g84,g85,g86,g88,g89
DatagAnalytics:g66,g67,g68,g69,g70,g235,g236
EthicsgingFinancialgReporting:g71,g72,g73,g237,g255gTheg
ThreegTypesgofgBusinessgActivity:g97
FinancinggActivities:g13,g15,g18,g90,g91,g93,g94,g95,g96,g97,g102,g109,g117,g118,g119,g238
InvestinggActivities:g14, g16,g98,g99,g115,g116
Operatingg Activities:g17,g19,g20,g100,g101,g103,g104,g105,g106,g107,g108,g110,g111,g112,g113,
114
ThegFourgFinancialgStatements:
IncomegStatement:g21,g22,g23,g24,127,g128,g132,g133,g134,g138,g142,g143
RetainedgEarningsgStatement:g120,g122,g123,g 124,g125,g126,g129,g130,g131,g135,g137,g139,g140,
141,g144,g145,g146,g147,g148,g149,g150,g154,g164,g169,g178,g181,g252
BalancegSheet:g25,g27,g28,g29,g30,g31,g32,g33,g34,g35,g136,g151,g152,g153,g163,g165,g166,g168,
170,g173,g177,g179,g180,g182,g185,g186,g187,g188,g199,g200,g201,g207,g208,g213,g214,g215,g216,
217,g218,g219,g220,g221,g222,g225,g229,g239,g240,g241,g253
StatementgofgCashgFlows:g26,g121,g171,g174,g183,g242,g249
InterrelationshipsgofgStatements:g155,g156,g157,g158,g159,g160,g161,g162,g167,g175,g176,g184,
250,g251,g256
ElementsgofgangAnnualgReport:g36,g41,g192,g196,g197
ManagementgDiscussiongandgAnalysis:g40,g191
NotesgtogthegFinancialgStatements:g37,g42,g190,g193,g194,g198,g254
Auditor‘sgReport:g38,g39,g195
Copyrightg©g2022gJohngWileyg&gSons,gInc.g(ForgInstructorgUsegOnly)
