Test bank for financial accounting tools for business decision making 10th edition

TEST BANK g g




Financial Accounting Tools For Business Decision
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Making, 10th Edition, Paul D. Kimmel,
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Chapters 1 – 13, Complete
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Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only)
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,TABLE OF CONTENTS G G




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 Only)
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,CHAPTER 1 g




INTRODUCTION TO FINANCIAL STATEMENTS g g g




CHAPTER LEARNING OBJECTIVES g g




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 or more
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people associated as partners. A corporation is a separate legal entity for which evidence of ownership is
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provided by shares of stock. Internal users are managers who need accounting information to plan,
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organize, and run business operations. The primary external users are investors and creditors. Investors
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(stockholders) use accounting information to decide whether to buy, hold, or sell shares of a company‘s
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stock. Creditors (suppliers and bankers) use accounting information to assess the risk of granting credit
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or loaning money to a business. Other groups who have an indirect interest in a business are taxing
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authorities, customers, labor unions, and regulatory agencies.
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2. Explain the three principal types of business activity. Financing activities involve collecting the
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necessary funds to support the business. Investing activities involve acquiring the resources necessary to
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run the business. Operating activities involve putting the resources of the business into action to
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generate a profit.
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3. Describe the four financial statements and how they are prepared. An income statement presents the
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revenues and expenses of a company for a specific period of time. A retained earnings statement
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summarizes the changes in retained earnings that have occurred for a specific period of time. A balance
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sheet reports the assets, liabilities, and stockholders‘ equity of a business at a specific date. A statement
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of cash flows summarizes information concerning the cash inflows (receipts) and outflows (payments)
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for a specific period of time. Assets are resources owned by a business. Liabilities are the debts and
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obligations of the business. Liabilities represent claims of creditors on the assets of the business.
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Stockholders‘ equity represents the claims of owners on the assets of the business. Stockholders‘ equity
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is subdivided into two parts: common stock and retained earnings. The basic accounting equation is
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Assets = Liabilities + Stockholders‘ Equity. Within the annual report, the management discussion and
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analysis provides management‘s interpretation of the company‘s results and financial position as well as
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a discussion of plans for the future. Notes to the financial statements provide additional explanation or
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detail to make the financial statements more informative. The auditor‘s report expresses an opinion as to
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whether the financial statements present fairly the company‘s results of operations and financial
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position.
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*4. Explain the career opportunities in accounting. Accounting offers many different jobs in fields such as
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public and private accounting, governmental, and forensic accounting. Accounting is a popular major
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because there are many different types of jobs, with unlimited potential for career advancement
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Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only)
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, 2-2 Test Bank for Kimmel, Financial Accounting: Tools for Business Decision Making, 10e
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Difficulties:
Easy: 143 g




Medium: 101 g




Hard: 12 g




Question List by Section g g g




Business Organization and Accounting Information Uses:Forms
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of Business Organization; 47, 48, 202, 246
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Sole Proprietorship: 5, 44, 49, 58, 59 g g g g g g




Partnership: 1, 4, 46, 56 g g g g




Corporation: 2, 3, 45, 50, 51, 52, 53, 55, 57, 233, 245 g g g g g g g g g g g




Hybrid Forms of Organization: 60, 61 g g g g g




Users and Uses of Financial Information: 6, 7, 11, 74, 87
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Internal Users: 62, 63, 64, 75, 77, 82, 234 g g g g g g g g




External Users: 8, 9, 10, 12, 65, 76, 78, 79, 80, 81, 83, 84, 85, 86, 88, 89 g g g g g g g g g g g g g g g g g




Data Analytics: 66, 67, 68, 69, 70, 235, 236
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Ethics in Financial Reporting: 71, 72, 73, 237, 255The
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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 g g g g g g g




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
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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, g g g g g g g g g g g g g g g g g g g




170, 173, 177, 179, 180, 182, 185, 186, 187, 188, 199, 200, 201, 207, 208, 213, 214, 215, 216, g g g g g g g g g g g g g g g g g g




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 g g g g g g g g g g




Interrelationships of Statements: 155, 156, 157, 158, 159, 160, 161, 162, 167, 175, 176, 184, g g g g g g g g g g g g g g




250, 251, 256
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Elements of an Annual Report: 36, 41, 192, 196, 197 g g g g g g g g g




Management Discussion and Analysis: 40, 191 g g g g g




Notes to the Financial Statements: 37, 42, 190, 193, 194, 198, 254
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Auditor‘s Report: 38, 39, 195 g g g g




Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only) g g g g g g g g g g g