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