TEST BANK
Financial Accounting Tools For Business Decision
Making, 10th Edition, Paul D. Kimmel,
Chapters 1 – 13, Complete
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
,TABLE OF CONTENTS E E
1 Introduction to Financial Statements
e e e e e
2 A Further Look at Financial Statements
e e e e e e e
3 The Accounting Information System
e e e e e
4 Accrual Accounting Concepts
e e e e
5 Merchandising Operations and the Multiple-Step Income Statement
e e e e e e e e
6 Reporting and Analyzing Inventory
e e e e e
7 Fraud, Internal Control, and Cash
e e e e e e
8 Reporting and Analyzing Receivables
e e e e e
9 Reporting and Analyzing Long-Lived Assets
e e e e e e
10 Reporting and Analyzing Liabilities
e e e e e
11 Reporting and Analyzing Stockholders’ Equity
e e e e e e
12 Statement of Cash Flows
e e e e e
13 Financial Analysis: The Big Picture
e e e e e e
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
,CHAPTER 1 e
INTRODUCTION TO FINANCIAL STATEMENTS
e e e
CHAPTEReLEARNINGeOBJECTIVES
1. Identifyetheeformseofebusinesseorganizationeandetheeuseseofeaccountingeinformation.eAesoleepropriet
orshipeiseaebusinesseownedebyeoneeperson.eAepartnershipeiseaebusinesseownedebyetwoeoremoreepeople
eassociatedeasepartners.eAecorporationeiseaeseparateelegaleentityeforewhicheevidenceeofeownershipeisep
rovidedebyeshareseofestock.eInternaleuserseareemanagersewhoeneedeaccountingeinformationetoeplan,eor
ganize,eanderunebusinesseoperations.eTheeprimaryeexternaleuserseareeinvestorseandecreditors.eInvestor
se(stockholders)euseeaccountingeinformationetoedecideewhetheretoebuy,ehold,eoreselleshareseofeaecomp
any‘sestock.eCreditorse(supplierseandebankers)e usee accountinge informatione toe assessethee riske ofe granti
nge crediteore loaninge moneyetoeaebusiness.eOtheregroupsewhoehaveeaneindirecteinteresteineaebusinessea
reetaxingeauthorities,ecustomers,elaboreunions,eande regulatoryeagencies.
2. Explainetheethreeeprincipaletypeseofebusinesseactivity.eFinancingeactivitiese involveecollectingetheenece
ssaryefundsetoesupportetheebusiness.eInvestingeactivitieseinvolveeacquiringetheeresourcesenecessaryetoe
runetheebusiness.eOperatingeactivitieseinvolveeputtinge theeresourceseofe theebusinesseintoeactionetoege
nerateeaeprofit.
3. Describeetheefourefinancialestatementseandehowetheyeareeprepared.eAneincomeestatementepresentset
heerevenueseandeexpenseseofeaecompanyeforeaespecificeperiodeofetime.eAeretainedeearningsestatement
esummarizesetheechangeseineretainedeearningsethatehaveeoccurredeforeaespecificeperiodeofetime.eAebal
anceesheetereportsetheeassets,eliabilities,eandestockholders‘eequityeofeaebusinesseateaespecificedate.eAes
tatementeofecasheflowse summarizese informationeconcerningetheecasheinflowse(receipts)eandeoutflow
se(payments)eforeaespecificeperiodeofetime.eAssetseareeresourceseownedebyeaebusiness.eLiabilitieseareet
heedebtseandeobligationseofetheebusiness.eLiabilitieserepresenteclaimseofecreditorseonetheeassetseofethe
ebusiness.eStockholders‘eequityerepresentsetheeclaimseofeownerseonetheeassetseofetheebusiness.eStockh
olders‘eequityeisesubdividedeintoetwoeparts:ecommonestockeanderetainedeearnings.eTheebasiceaccounti
ngeequationeiseAssetse=eLiabilitiese+eStockholders‘eEquity.eWithinetheeannualereport,etheemanagemente
discussioneandeanalysiseprovidesemanagement‘seinterpretationeofetheecompany‘seresultseandefinanciale
positioneasewelleaseaediscussioneofeplanseforetheefuture.eNotesetoetheefinancialestatementseprovideeadd
itionaleexplanationeoredetailetoemakeetheefinancialestatementsemoreeinformative.eTheeauditor‘sereport
eexpresseseaneopinioneasetoewhetheretheefinancialestatementsepresentefairlyetheecompany‘seresultseofe
operationseandefinancialeposition.
*4.eExplainetheecareereopportunitieseineaccounting.eAccountingeoffersemanyedifferentejobseinefieldsesuche
asepubliceandeprivateeaccounting,egovernmental,eandeforensiceaccounting.eAccountingeiseaepopularema
jorebecauseethereeareemanyedifferentetypeseofejobs,ewitheunlimitedepotentialeforecareereadvancement
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
, 2-2 TesteBankeforeKimmel,eFinancialeAccounting:eToolseforeBusinesseDecisioneMaking,e10
e
Difficulties:
Easy:e143
Medium:e101
Hard:e12
QuestioneListebyeSection
BusinesseOrganizationeandeAccountingeInformationeUses:eForm
seofeBusinesseOrganization;e47,e48,e202,e246
SoleeProprietorship:e5,e44,e49,e58,e59
Partnership:e1,e4,e46,e56
Corporation:e2,e3,e45,e50,e51,e52,e53,e55,e57,e233,e245
HybrideFormseofeOrganization:e60,e61
UserseandeUseseofe FinancialeInformation:e6,e7,e11,e74,e87
InternaleUsers:e62,e63,e64,e75,e77,e82,e234
ExternaleUsers:e8,e9,e10,e12,e65,e76,e78,e79,e80,e81,e83,e84,e85,e86,e88,e89
DataeAnalytics:e66,e67,e68,e69,e70,e235,e236
EthicseineFinancialeReporting:e71,e72,e73,e237,e255eThee
ThreeeTypeseofeBusinesseActivity:e97
FinancingeActivities:e13,e15,e18,e90,e91,e93,e94,e95,e96,e97,e102,e109,e117,e118,e119,e238
InvestingeActivities:e14,e16,e98,e99,e115,e116
OperatingeActivities:e17,e19,e20,e100,e101,e103,e104,e105,e106,e107,e108,e110,e111,e112,e113,
114
TheeFoureFinancialeStatements:
IncomeeStatement:e21,e22,e23,e24,127,e128,e132,e133,e134,e138,e142,e143
RetainedeEarningseStatement:e120,e122,e123,e 124,e125,e126,e129,e130,e131,e135,e137,e139,e140,
141,e144,e145,e146,e147,e148,e149,e150,e154,e164,e169,e178,e181,e252
BalanceeSheet:e25,e27,e28,e29,e30,e31,e32,e33,e34,e35,e136,e151,e152,e153,e163,e165,e166,e168,
170,e173,e177,e179,e180,e182,e185,e186,e187,e188,e199,e200,e201,e207,e208,e213,e214,e215,e216,
217,e218,e219,e220,e221,e222,e225,e229,e239,e240,e241,e253
Statementeofe CasheFlows:e26,e121,e171,e174,e183,e242,e249
InterrelationshipseofeStatements:e155,e156,e157,e158,e159,e160,e161,e162,e167,e175,e176,e184,
250,e251,e256
ElementseofeaneAnnualeReport:e36,e41,e192,e196,e197
ManagementeDiscussioneandeAnalysis:e40,e191
NotesetoetheeFinancialeStatements:e37,e42,e190,e193,e194,e198,e254
Auditor‘seReport:e38,e39,e195
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
Financial Accounting Tools For Business Decision
Making, 10th Edition, Paul D. Kimmel,
Chapters 1 – 13, Complete
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
,TABLE OF CONTENTS E E
1 Introduction to Financial Statements
e e e e e
2 A Further Look at Financial Statements
e e e e e e e
3 The Accounting Information System
e e e e e
4 Accrual Accounting Concepts
e e e e
5 Merchandising Operations and the Multiple-Step Income Statement
e e e e e e e e
6 Reporting and Analyzing Inventory
e e e e e
7 Fraud, Internal Control, and Cash
e e e e e e
8 Reporting and Analyzing Receivables
e e e e e
9 Reporting and Analyzing Long-Lived Assets
e e e e e e
10 Reporting and Analyzing Liabilities
e e e e e
11 Reporting and Analyzing Stockholders’ Equity
e e e e e e
12 Statement of Cash Flows
e e e e e
13 Financial Analysis: The Big Picture
e e e e e e
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
,CHAPTER 1 e
INTRODUCTION TO FINANCIAL STATEMENTS
e e e
CHAPTEReLEARNINGeOBJECTIVES
1. Identifyetheeformseofebusinesseorganizationeandetheeuseseofeaccountingeinformation.eAesoleepropriet
orshipeiseaebusinesseownedebyeoneeperson.eAepartnershipeiseaebusinesseownedebyetwoeoremoreepeople
eassociatedeasepartners.eAecorporationeiseaeseparateelegaleentityeforewhicheevidenceeofeownershipeisep
rovidedebyeshareseofestock.eInternaleuserseareemanagersewhoeneedeaccountingeinformationetoeplan,eor
ganize,eanderunebusinesseoperations.eTheeprimaryeexternaleuserseareeinvestorseandecreditors.eInvestor
se(stockholders)euseeaccountingeinformationetoedecideewhetheretoebuy,ehold,eoreselleshareseofeaecomp
any‘sestock.eCreditorse(supplierseandebankers)e usee accountinge informatione toe assessethee riske ofe granti
nge crediteore loaninge moneyetoeaebusiness.eOtheregroupsewhoehaveeaneindirecteinteresteineaebusinessea
reetaxingeauthorities,ecustomers,elaboreunions,eande regulatoryeagencies.
2. Explainetheethreeeprincipaletypeseofebusinesseactivity.eFinancingeactivitiese involveecollectingetheenece
ssaryefundsetoesupportetheebusiness.eInvestingeactivitieseinvolveeacquiringetheeresourcesenecessaryetoe
runetheebusiness.eOperatingeactivitieseinvolveeputtinge theeresourceseofe theebusinesseintoeactionetoege
nerateeaeprofit.
3. Describeetheefourefinancialestatementseandehowetheyeareeprepared.eAneincomeestatementepresentset
heerevenueseandeexpenseseofeaecompanyeforeaespecificeperiodeofetime.eAeretainedeearningsestatement
esummarizesetheechangeseineretainedeearningsethatehaveeoccurredeforeaespecificeperiodeofetime.eAebal
anceesheetereportsetheeassets,eliabilities,eandestockholders‘eequityeofeaebusinesseateaespecificedate.eAes
tatementeofecasheflowse summarizese informationeconcerningetheecasheinflowse(receipts)eandeoutflow
se(payments)eforeaespecificeperiodeofetime.eAssetseareeresourceseownedebyeaebusiness.eLiabilitieseareet
heedebtseandeobligationseofetheebusiness.eLiabilitieserepresenteclaimseofecreditorseonetheeassetseofethe
ebusiness.eStockholders‘eequityerepresentsetheeclaimseofeownerseonetheeassetseofetheebusiness.eStockh
olders‘eequityeisesubdividedeintoetwoeparts:ecommonestockeanderetainedeearnings.eTheebasiceaccounti
ngeequationeiseAssetse=eLiabilitiese+eStockholders‘eEquity.eWithinetheeannualereport,etheemanagemente
discussioneandeanalysiseprovidesemanagement‘seinterpretationeofetheecompany‘seresultseandefinanciale
positioneasewelleaseaediscussioneofeplanseforetheefuture.eNotesetoetheefinancialestatementseprovideeadd
itionaleexplanationeoredetailetoemakeetheefinancialestatementsemoreeinformative.eTheeauditor‘sereport
eexpresseseaneopinioneasetoewhetheretheefinancialestatementsepresentefairlyetheecompany‘seresultseofe
operationseandefinancialeposition.
*4.eExplainetheecareereopportunitieseineaccounting.eAccountingeoffersemanyedifferentejobseinefieldsesuche
asepubliceandeprivateeaccounting,egovernmental,eandeforensiceaccounting.eAccountingeiseaepopularema
jorebecauseethereeareemanyedifferentetypeseofejobs,ewitheunlimitedepotentialeforecareereadvancement
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
, 2-2 TesteBankeforeKimmel,eFinancialeAccounting:eToolseforeBusinesseDecisioneMaking,e10
e
Difficulties:
Easy:e143
Medium:e101
Hard:e12
QuestioneListebyeSection
BusinesseOrganizationeandeAccountingeInformationeUses:eForm
seofeBusinesseOrganization;e47,e48,e202,e246
SoleeProprietorship:e5,e44,e49,e58,e59
Partnership:e1,e4,e46,e56
Corporation:e2,e3,e45,e50,e51,e52,e53,e55,e57,e233,e245
HybrideFormseofeOrganization:e60,e61
UserseandeUseseofe FinancialeInformation:e6,e7,e11,e74,e87
InternaleUsers:e62,e63,e64,e75,e77,e82,e234
ExternaleUsers:e8,e9,e10,e12,e65,e76,e78,e79,e80,e81,e83,e84,e85,e86,e88,e89
DataeAnalytics:e66,e67,e68,e69,e70,e235,e236
EthicseineFinancialeReporting:e71,e72,e73,e237,e255eThee
ThreeeTypeseofeBusinesseActivity:e97
FinancingeActivities:e13,e15,e18,e90,e91,e93,e94,e95,e96,e97,e102,e109,e117,e118,e119,e238
InvestingeActivities:e14,e16,e98,e99,e115,e116
OperatingeActivities:e17,e19,e20,e100,e101,e103,e104,e105,e106,e107,e108,e110,e111,e112,e113,
114
TheeFoureFinancialeStatements:
IncomeeStatement:e21,e22,e23,e24,127,e128,e132,e133,e134,e138,e142,e143
RetainedeEarningseStatement:e120,e122,e123,e 124,e125,e126,e129,e130,e131,e135,e137,e139,e140,
141,e144,e145,e146,e147,e148,e149,e150,e154,e164,e169,e178,e181,e252
BalanceeSheet:e25,e27,e28,e29,e30,e31,e32,e33,e34,e35,e136,e151,e152,e153,e163,e165,e166,e168,
170,e173,e177,e179,e180,e182,e185,e186,e187,e188,e199,e200,e201,e207,e208,e213,e214,e215,e216,
217,e218,e219,e220,e221,e222,e225,e229,e239,e240,e241,e253
Statementeofe CasheFlows:e26,e121,e171,e174,e183,e242,e249
InterrelationshipseofeStatements:e155,e156,e157,e158,e159,e160,e161,e162,e167,e175,e176,e184,
250,e251,e256
ElementseofeaneAnnualeReport:e36,e41,e192,e196,e197
ManagementeDiscussioneandeAnalysis:e40,e191
NotesetoetheeFinancialeStatements:e37,e42,e190,e193,e194,e198,e254
Auditor‘seReport:e38,e39,e195
Copyrighte©e2022eJohneWileye&eSons,eInc.e(ForeInstructoreUseeOnl
y)
