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