Financial Accounting Tools For Business Decision Making, 10th Edition TEST BANK by Paul D. Kimmel, Jerry J. Weygandt, Verified Chapters 1 - 13, Complete Newest Version

TEST BANK

Financial Accounting Tools For Business

Decision Making, 10th Edition, Paul D.

Kimmel,




Cha

pter


Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only)
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, s 1 – 13, Complete




TABLE OF CONTENTS T8 T8




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-
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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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, CHAPTER 1 T8




INTRODUCTION TO FINANCIAL STATEMENTS T8 T8 T8




CHAPTER LEARNING OBJECTIVES T8 T8




1. Identify the forms of business organization and the uses of accounting information. A sol
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e proprietorship is a business owned by one person. A partnership is a business owned by two
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or more people associated as partners. A corporation is a separate legal entity for which eviden
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ce of ownership is provided by shares of stock. Internal users are managers who need accounti
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ng information to plan, organize, and run business operations. The primary external users are i
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nvestors and creditors. Investors (stockholders) use accounting information to decide whether
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to buy, hold, or sell shares of a company‘s stock. Creditors (suppliers and bankers) use accounti
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ng information to assess the risk of granting credit or loaning money toa business. Other gro
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ups who have an indirect interest in a business are taxing authorities, customers, labor unions,
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and regulatory agencies. T8 T8




2. Explain the three principal types of business activity. Financing activities involve collecting
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the necessary funds to support the business. Investing activities involve acquiring the resource
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s necessary to run the business. Operating activities involve putting the resources of the busi
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ness into action to generate a profit.
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3. Describe the four financial statements and how they are prepared. An income statement pr
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esents the revenues and expenses of a company for a specific period of time. A retained earnin
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gs statement summarizes the changes in retained earnings that have occurred for a specific pe
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riod of time. A balance sheet reports the assets, liabilities, and stockholders‘ equity of a busines
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s at a specific date. A statement of cash flows summarizes information concerning the cash i
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nflows (receipts) and outflows (payments) for a specific period of time. Assets are resources ow
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ned by a business. Liabilities are the debts and obligations of the business. Liabilities represent
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claims of creditors on the assets of the business. Stockholders‘ equity represents the claims of
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owners on the assets of the business. Stockholders‘ equity is subdivided into two parts: comm
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on stock and retained earnings. The basic accounting equation is Assets = Liabilities + Stockho
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Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only)
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