TEST BANK i i
Financial Accounting Tools For Business Decision
i i i i i
Making, 10th Edition, Paul D. Kimmel,
i i i i i i i
iChapters 1 – 13, Completei i i i
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
,TABLE OF CONTENTS I I
1 Introduction to Financial Statements
i i i i i
2 A Further Look at Financial Statements
i i i i i i i
3 The Accounting Information System
i i i i i
4 Accrual Accounting Concepts
i i i i
5 Merchandising Operations and the Multiple-Step Income Statement
i i i i i i i i
6 Reporting and Analyzing Inventory
i i i i i
7 Fraud, Internal Control, and Cash
i i i i i i
8 Reporting and Analyzing Receivables
i i i i i
9 Reporting and Analyzing Long-Lived Assets
i i i i i i
10 Reporting and Analyzing Liabilities
i i i i i
11 Reporting and Analyzing Stockholders’ Equity
i i i i i i
12 Statement of Cash Flows
i i i i i
13 Financial Analysis: The Big Picture
i i i i i i
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
,CHAPTER 1 i
INTRODUCTION TO FINANCIAL STATEMENTS
i i i
CHAPTER LEARNING OBJECTIVES
i i
1. Identify ithe iforms iof ibusiness iorganization iand ithe iuses iof iaccounting iinformation. iA isole
iproprietorship iis ia ibusiness iowned iby ione iperson. iA ipartnership iis ia ibusiness iowned iby itwo ior
imore ipeople iassociated ias ipartners. iA icorporation iis ia iseparate ilegal ientity ifor iwhich ievidence iof
iownership iis iprovided iby ishares iof istock. iInternal iusers iare imanagers iwho ineed iaccounting
iinformation ito iplan, iorganize, iand irun ibusiness ioperations. iThe iprimary iexternal iusers iare
iinvestors iand icreditors. iInvestors i(stockholders) iuse iaccounting iinformation ito idecide iwhether ito
ibuy, ihold, ior isell ishares iof ia icompany‘s istock. iCreditors i(suppliers iand ibankers) i use i accounting
i information i to i assess i the i risk i of i granting i credit ior i loaning i money i to ia ibusiness. iOther igroups
iwho ihave ian iindirect iinterest iin ia ibusiness iare itaxing iauthorities, icustomers, ilabor iunions, iand
i regulatory iagencies.
2. Explain ithe ithree iprincipal itypes iof ibusiness iactivity. iFinancing iactivities i involve icollecting ithe
inecessary ifunds ito isupport ithe ibusiness. iInvesting iactivities iinvolve iacquiring ithe iresources
inecessary ito irun ithe ibusiness. iOperating iactivities iinvolve iputting i the iresources iof i the ibusiness
i into iaction ito igenerate ia i profit.
3. Describe ithe ifour ifinancial istatements iand ihow ithey iare iprepared. iAn iincome istatement ipresents
ithe irevenues iand iexpenses iof ia icompany ifor ia ispecific iperiod iof itime. iA iretained iearnings
istatement isummarizes ithe ichanges iin iretained iearnings ithat ihave ioccurred ifor ia ispecific iperiod iof
itime. iA ibalance isheet ireports ithe iassets, iliabilities, iand istockholders‘ iequity iof ia ibusiness iat ia
ispecific idate. iA istatement iof icash iflows i summarizes i information iconcerning ithe icash iinflows
i(receipts) iand ioutflows i(payments) ifor ia ispecific iperiod iof itime. iAssets iare iresources iowned iby ia
ibusiness. iLiabilities iare ithe idebts iand iobligations iof ithe ibusiness. iLiabilities irepresent iclaims iof
icreditors ion ithe iassets iof ithe ibusiness. iStockholders‘ iequity irepresents ithe iclaims iof iowners ion
ithe iassets iof ithe ibusiness. iStockholders‘ iequity iis isubdivided iinto itwo iparts: i common istock iand
iretained iearnings. iThe ibasic iaccounting iequation iis iAssets i= iLiabilities i+ iStockholders‘ iEquity.
iWithin ithe iannual ireport, ithe imanagement idiscussion iand ianalysis iprovides imanagement‘s
iinterpretation iof ithe icompany‘siresults iand ifinancial iposition ias iwell ias ia idiscussion iof iplans ifor ithe
ifuture. iNotes ito ithe ifinancial istatements iprovide iadditional iexplanation ior idetail ito imake ithe
ifinancial istatements imore iinformative. iThe iauditor‘s ireport iexpresses ian iopinion ias ito iwhether
ithe ifinancialistatements ipresent ifairly ithe icompany‘s iresults iof i operations iand ifinancial iposition.
*4. iExplain ithe icareer iopportunities iin iaccounting. iAccounting ioffers imany idifferent ijobs iin ifields isuch
ias ipublic iand iprivate iaccounting, igovernmental, iand iforensic iaccounting. iAccounting iis ia ipopular
imajor ibecause ithere iare imany idifferent itypes iof ijobs, iwith iunlimited ipotential ifor icareer
iadvancement
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
, 2-2 Test iBank ifor iKimmel, iFinancial iAccounting: iTools ifor iBusiness iDecision iMaking,
i 10e
Difficulties:
Easy: i143
Medium: i101
Hard: i12
Question List by Section
i i i
Business iOrganization iand iAccounting iInformation iUses:
iForms iof iBusiness iOrganization; i47, i48, i202, i246
Sole iProprietorship: i5, i44, i49, i58, i59
Partnership: i1, i4, i46, i56
Corporation: i2, i3, i45, i50, i51, i52, i53, i55, i57, i233, i245
Hybrid iForms iof iOrganization: i60, i61
Users iand iUses iof iFinancial iInformation: i6, i7, i11, i74, i87
Internal iUsers: i62, i63, i64, i75, i77, i82, i234
External iUsers: i8, i9, i10, i12, i65, i76, i78, i79, i80, i81, i83, i84, i85, i86, i88, i89
Data iAnalytics: i66, i67, i68, i69, i70, i235, i236
Ethics iin iFinancial iReporting: i71, i72, i73, i237, i255iThe
i Three i Types iof i Business iActivity: i97
Financing iActivities: i13, i15, i18, i90, i91, i93, i94, i95, i96, i97, i102, i109, i117, i118, i119, i238
Investing iActivities: i14, i16, i98, i99, i115, i116
Operating iActivities: i17, i19, i20, i100, i101, i103, i104, i105, i106, i107, i108, i110, i111, i112, i113,
114
The iFour iFinancial iStatements:
Income iStatement: i21, i22, i23, i24,127, i128, i132, i133, i134, i138, i142, i143
Retained iEarnings iStatement: i120, i122, i123, i 124, i125, i126, i129, i130, i131, i135, i137, i139, i140,
141, i144, i145, i146, i147, i148, i149, i150, i154, i164, i169, i178, i181, i252
Balance iSheet: i25, i27, i28, i29, i30, i31, i32, i33, i34, i35, i136, i151, i152, i153, i163, i165, i166, i168,
170, i173, i177, i179, i180, i182, i185, i186, i187, i188, i199, i200, i201, i207, i208, i213, i214, i215, i216,
217, i218, i219, i220, i221, i222, i225, i229, i239, i240, i241, i253
Statement iof iCash iFlows: i26, i121, i171, i174, i183, i242, i249
Interrelationships iof iStatements: i155, i156, i157, i158, i159, i160, i161, i162, i167, i175, i176, i184,
250, i251, i256
Elements iof ian iAnnual iReport: i36, i41, i192, i196, i197
Management iDiscussion iand iAnalysis: i40, i191
Notes ito ithe iFinancial iStatements: i37, i42, i190, i193, i194, i198, i254
Auditor‘s iReport: i38, i39, i195
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
Financial Accounting Tools For Business Decision
i i i i i
Making, 10th Edition, Paul D. Kimmel,
i i i i i i i
iChapters 1 – 13, Completei i i i
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
,TABLE OF CONTENTS I I
1 Introduction to Financial Statements
i i i i i
2 A Further Look at Financial Statements
i i i i i i i
3 The Accounting Information System
i i i i i
4 Accrual Accounting Concepts
i i i i
5 Merchandising Operations and the Multiple-Step Income Statement
i i i i i i i i
6 Reporting and Analyzing Inventory
i i i i i
7 Fraud, Internal Control, and Cash
i i i i i i
8 Reporting and Analyzing Receivables
i i i i i
9 Reporting and Analyzing Long-Lived Assets
i i i i i i
10 Reporting and Analyzing Liabilities
i i i i i
11 Reporting and Analyzing Stockholders’ Equity
i i i i i i
12 Statement of Cash Flows
i i i i i
13 Financial Analysis: The Big Picture
i i i i i i
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
,CHAPTER 1 i
INTRODUCTION TO FINANCIAL STATEMENTS
i i i
CHAPTER LEARNING OBJECTIVES
i i
1. Identify ithe iforms iof ibusiness iorganization iand ithe iuses iof iaccounting iinformation. iA isole
iproprietorship iis ia ibusiness iowned iby ione iperson. iA ipartnership iis ia ibusiness iowned iby itwo ior
imore ipeople iassociated ias ipartners. iA icorporation iis ia iseparate ilegal ientity ifor iwhich ievidence iof
iownership iis iprovided iby ishares iof istock. iInternal iusers iare imanagers iwho ineed iaccounting
iinformation ito iplan, iorganize, iand irun ibusiness ioperations. iThe iprimary iexternal iusers iare
iinvestors iand icreditors. iInvestors i(stockholders) iuse iaccounting iinformation ito idecide iwhether ito
ibuy, ihold, ior isell ishares iof ia icompany‘s istock. iCreditors i(suppliers iand ibankers) i use i accounting
i information i to i assess i the i risk i of i granting i credit ior i loaning i money i to ia ibusiness. iOther igroups
iwho ihave ian iindirect iinterest iin ia ibusiness iare itaxing iauthorities, icustomers, ilabor iunions, iand
i regulatory iagencies.
2. Explain ithe ithree iprincipal itypes iof ibusiness iactivity. iFinancing iactivities i involve icollecting ithe
inecessary ifunds ito isupport ithe ibusiness. iInvesting iactivities iinvolve iacquiring ithe iresources
inecessary ito irun ithe ibusiness. iOperating iactivities iinvolve iputting i the iresources iof i the ibusiness
i into iaction ito igenerate ia i profit.
3. Describe ithe ifour ifinancial istatements iand ihow ithey iare iprepared. iAn iincome istatement ipresents
ithe irevenues iand iexpenses iof ia icompany ifor ia ispecific iperiod iof itime. iA iretained iearnings
istatement isummarizes ithe ichanges iin iretained iearnings ithat ihave ioccurred ifor ia ispecific iperiod iof
itime. iA ibalance isheet ireports ithe iassets, iliabilities, iand istockholders‘ iequity iof ia ibusiness iat ia
ispecific idate. iA istatement iof icash iflows i summarizes i information iconcerning ithe icash iinflows
i(receipts) iand ioutflows i(payments) ifor ia ispecific iperiod iof itime. iAssets iare iresources iowned iby ia
ibusiness. iLiabilities iare ithe idebts iand iobligations iof ithe ibusiness. iLiabilities irepresent iclaims iof
icreditors ion ithe iassets iof ithe ibusiness. iStockholders‘ iequity irepresents ithe iclaims iof iowners ion
ithe iassets iof ithe ibusiness. iStockholders‘ iequity iis isubdivided iinto itwo iparts: i common istock iand
iretained iearnings. iThe ibasic iaccounting iequation iis iAssets i= iLiabilities i+ iStockholders‘ iEquity.
iWithin ithe iannual ireport, ithe imanagement idiscussion iand ianalysis iprovides imanagement‘s
iinterpretation iof ithe icompany‘siresults iand ifinancial iposition ias iwell ias ia idiscussion iof iplans ifor ithe
ifuture. iNotes ito ithe ifinancial istatements iprovide iadditional iexplanation ior idetail ito imake ithe
ifinancial istatements imore iinformative. iThe iauditor‘s ireport iexpresses ian iopinion ias ito iwhether
ithe ifinancialistatements ipresent ifairly ithe icompany‘s iresults iof i operations iand ifinancial iposition.
*4. iExplain ithe icareer iopportunities iin iaccounting. iAccounting ioffers imany idifferent ijobs iin ifields isuch
ias ipublic iand iprivate iaccounting, igovernmental, iand iforensic iaccounting. iAccounting iis ia ipopular
imajor ibecause ithere iare imany idifferent itypes iof ijobs, iwith iunlimited ipotential ifor icareer
iadvancement
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
, 2-2 Test iBank ifor iKimmel, iFinancial iAccounting: iTools ifor iBusiness iDecision iMaking,
i 10e
Difficulties:
Easy: i143
Medium: i101
Hard: i12
Question List by Section
i i i
Business iOrganization iand iAccounting iInformation iUses:
iForms iof iBusiness iOrganization; i47, i48, i202, i246
Sole iProprietorship: i5, i44, i49, i58, i59
Partnership: i1, i4, i46, i56
Corporation: i2, i3, i45, i50, i51, i52, i53, i55, i57, i233, i245
Hybrid iForms iof iOrganization: i60, i61
Users iand iUses iof iFinancial iInformation: i6, i7, i11, i74, i87
Internal iUsers: i62, i63, i64, i75, i77, i82, i234
External iUsers: i8, i9, i10, i12, i65, i76, i78, i79, i80, i81, i83, i84, i85, i86, i88, i89
Data iAnalytics: i66, i67, i68, i69, i70, i235, i236
Ethics iin iFinancial iReporting: i71, i72, i73, i237, i255iThe
i Three i Types iof i Business iActivity: i97
Financing iActivities: i13, i15, i18, i90, i91, i93, i94, i95, i96, i97, i102, i109, i117, i118, i119, i238
Investing iActivities: i14, i16, i98, i99, i115, i116
Operating iActivities: i17, i19, i20, i100, i101, i103, i104, i105, i106, i107, i108, i110, i111, i112, i113,
114
The iFour iFinancial iStatements:
Income iStatement: i21, i22, i23, i24,127, i128, i132, i133, i134, i138, i142, i143
Retained iEarnings iStatement: i120, i122, i123, i 124, i125, i126, i129, i130, i131, i135, i137, i139, i140,
141, i144, i145, i146, i147, i148, i149, i150, i154, i164, i169, i178, i181, i252
Balance iSheet: i25, i27, i28, i29, i30, i31, i32, i33, i34, i35, i136, i151, i152, i153, i163, i165, i166, i168,
170, i173, i177, i179, i180, i182, i185, i186, i187, i188, i199, i200, i201, i207, i208, i213, i214, i215, i216,
217, i218, i219, i220, i221, i222, i225, i229, i239, i240, i241, i253
Statement iof iCash iFlows: i26, i121, i171, i174, i183, i242, i249
Interrelationships iof iStatements: i155, i156, i157, i158, i159, i160, i161, i162, i167, i175, i176, i184,
250, i251, i256
Elements iof ian iAnnual iReport: i36, i41, i192, i196, i197
Management iDiscussion iand iAnalysis: i40, i191
Notes ito ithe iFinancial iStatements: i37, i42, i190, i193, i194, i198, i254
Auditor‘s iReport: i38, i39, i195
Copyright i© i2022 iJohn iWiley i& iSons, iInc. i(For iInstructor iUse
iOnly)
