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