Complete Solution Manual Financial Accounting Tools
for Business Decision Making 10th Edition Kimmel
Weygandt Mitchell
Accounting - ANSWER System that collects and processes (analyzes, measures,
and records) financial information about an organization and reports that information
to decision makers.
Accounting entity - ANSWER Is the organization for with financial data are to be
collected.
The four basic statements: - ANSWER 1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - ANSWER Reports the amount of assets, liabilities and
stockholders' equity of an accounting entry at a point in time.
Income Statement - ANSWER Reports the revenues less the expenses of the
accounting period.
Statement of Retained Earnings - ANSWER Reports the way that net income and
the distribution of dividends affected the financial position of the company during the
accounting period.
Statement of Cash Flows - ANSWER Reports inflows and outflows of cash during
the accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - ANSWER Assets = Liabilities + Stockholders' Equity
Assets - ANSWER Are the economic resources owned by the company. Each of
these economic resources is expected to provide future benefits to the firm.
Liabilities - ANSWER Are the company's debts or obligations. Which will be paid
with assets or services.
Stockholders' Equity (Owners' Equity) - ANSWER Indicates the amount of financing
provided by owners of the business and earnings. Is the sum of the contribute capital
+ the retained earnings.
Accounting Period - ANSWER Is the time period cover by the financial statements.
Elements of the Income Statement - ANSWER Revenues, Expenses and Net
Income.
, Revenues - ANSWER Earnings from the sale of goods or services to costumers.
Revenues are reported whether or not have yet been paid for.
Expenses - ANSWER Represent the dollar amount of resources the entity used to
earn revenue during the period.
Net Income ("the bottom line") - ANSWER Is the excess of total revenues over total
expenses.
Net Loss - ANSWER If total expenses exceed total revenues.
Retained Earning Equation - ANSWER Ending Retained Earnings = (Beginning of
Retained Earnings + Net Income) - Dividends
The Cash Flow Statement Equation - ANSWER +/- Cash flow from Operating
Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
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Change in Cash
Cash Flow from Operating Activities, and examples - ANSWER CFO- Are cash flow
that are directly related to earning income. Example, collecting cash from costumers,
pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - ANSWER CFI- Are cash flow
related to the acquisition or sale of the company's productive assets. Example, the
purchase of additional equipment.
Cash Flow from Financing Activities, and examples - ANSWER CFF- Are cash flow
directly related to the financing of the enterprise itself. Example, the payment of
money to investors and creditors.
Notes - ANSWER "Footnotes" provide supplemental information about the financial
condition of a company.
GAAP - ANSWER Generally Accepted Accounting Principles, are the measurement
rules used to develop the information in financial statements.
SEC - ANSWER Security and Exchange Commission, is the U.S government
agency that determines the financial statements that public companies must provide
to stockholders, and the rules that they must use in producing those statements.
FASB - ANSWER Financial Accounting Standards Board, is the private sector body
given the primary responsibility to work out the detailed rules that become GAAP.
Audit - ANSWER Is an examination of the financial reports to ensure that they
represent claim and comfort with GAAP.
for Business Decision Making 10th Edition Kimmel
Weygandt Mitchell
Accounting - ANSWER System that collects and processes (analyzes, measures,
and records) financial information about an organization and reports that information
to decision makers.
Accounting entity - ANSWER Is the organization for with financial data are to be
collected.
The four basic statements: - ANSWER 1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - ANSWER Reports the amount of assets, liabilities and
stockholders' equity of an accounting entry at a point in time.
Income Statement - ANSWER Reports the revenues less the expenses of the
accounting period.
Statement of Retained Earnings - ANSWER Reports the way that net income and
the distribution of dividends affected the financial position of the company during the
accounting period.
Statement of Cash Flows - ANSWER Reports inflows and outflows of cash during
the accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - ANSWER Assets = Liabilities + Stockholders' Equity
Assets - ANSWER Are the economic resources owned by the company. Each of
these economic resources is expected to provide future benefits to the firm.
Liabilities - ANSWER Are the company's debts or obligations. Which will be paid
with assets or services.
Stockholders' Equity (Owners' Equity) - ANSWER Indicates the amount of financing
provided by owners of the business and earnings. Is the sum of the contribute capital
+ the retained earnings.
Accounting Period - ANSWER Is the time period cover by the financial statements.
Elements of the Income Statement - ANSWER Revenues, Expenses and Net
Income.
, Revenues - ANSWER Earnings from the sale of goods or services to costumers.
Revenues are reported whether or not have yet been paid for.
Expenses - ANSWER Represent the dollar amount of resources the entity used to
earn revenue during the period.
Net Income ("the bottom line") - ANSWER Is the excess of total revenues over total
expenses.
Net Loss - ANSWER If total expenses exceed total revenues.
Retained Earning Equation - ANSWER Ending Retained Earnings = (Beginning of
Retained Earnings + Net Income) - Dividends
The Cash Flow Statement Equation - ANSWER +/- Cash flow from Operating
Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
----------------------------------------
Change in Cash
Cash Flow from Operating Activities, and examples - ANSWER CFO- Are cash flow
that are directly related to earning income. Example, collecting cash from costumers,
pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - ANSWER CFI- Are cash flow
related to the acquisition or sale of the company's productive assets. Example, the
purchase of additional equipment.
Cash Flow from Financing Activities, and examples - ANSWER CFF- Are cash flow
directly related to the financing of the enterprise itself. Example, the payment of
money to investors and creditors.
Notes - ANSWER "Footnotes" provide supplemental information about the financial
condition of a company.
GAAP - ANSWER Generally Accepted Accounting Principles, are the measurement
rules used to develop the information in financial statements.
SEC - ANSWER Security and Exchange Commission, is the U.S government
agency that determines the financial statements that public companies must provide
to stockholders, and the rules that they must use in producing those statements.
FASB - ANSWER Financial Accounting Standards Board, is the private sector body
given the primary responsibility to work out the detailed rules that become GAAP.
Audit - ANSWER Is an examination of the financial reports to ensure that they
represent claim and comfort with GAAP.
