Accounting Tools for Business Decisions Making, 8e Paul Kimmel, Jerry Weygandt, Jill Mitchell (Test Bank All Chapters, 100% Original Verified, A + Grade)

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Accounting Tools for Business Decisions Making, 8e
Paul Kimmel, Jerry Weygandt, Jill Mitchell (Test
Bank All Chapters, 100% Original Verified, A
+ Grade)

,Accounting Tools for Business Decisions Making, 8e Paul Kimmel, Jerry
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Weygandt, Jill Mitchell (Test Bank All Chapters, 100% Original Verified, A
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+ Grade) k




CHAPTER 1 k




INTRODUCTION TO FINANCIAL STATEMENTS k k k




CHAPTER LEARNING OBJECTIVES k k




1. Identify the forms of business organization and the uses of accounting information. A
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sole proprietorship is a business owned by one person. A partnership is a business owned by
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two or more people associated as partners. A corporation is a separate legal entity for which
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evidence of ownership is provided by shares of stock. Internal users are managers who need
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accounting information to plan, organize, and run business operations. The primary external
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users are investors and creditors. Investors (stockholders) use accounting information to
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decide whether to buy, hold, or sell shares of a company‘s stock. Creditors (suppliers and
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bankers) use accounting information to assess the risk of granting credit or loaning money to a
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business. Other groups who have an indirect interest in a business are taxing authorities,
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customers, labor unions, and regulatory agencies.
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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
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resources necessary to run the business. Operating activities involve putting the resources of
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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
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presents the revenues and expenses of a company for a specific period of time. A retained
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earnings statement summarizes the changes in retained earnings that have occurred for a
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specific period of time. A balance sheet reports the assets, liabilities, and stockholders‘ equity of
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a business at a specific date. A statement of cash flows summarizes information concerning
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the cash inflows (receipts) and outflows (payments) for a specific period of time. Assets are
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resources owned by a business. Liabilities are the debts and obligations of the business.
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Liabilities represent claims of creditors on the assets of the business. Stockholders‘ equity
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represents the claims of owners on the assets of the business. Stockholders‘ equity is
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subdivided into two parts: common stock and retained earnings. The basic accounting equation
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is Assets = Liabilities + Stockholders‘ Equity. Within the annual report, the management
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discussion and analysis provides management‘s interpretation of the company‘s results and
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financial position as well as a discussion of plans for the future. Notes to the financial
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statements provide additional explanation or detail to make the financial statements more
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informative. The auditor‘s report expresses an opinion as to whether the financial statements
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present fairly the company‘s results of operations and financial position.
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*4. Explain the career opportunities in accounting. Accounting offers many different jobs in
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fields such as public and private accounting, governmental, and forensic accounting.
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Accounting is a popular major because there are many different types of jobs, with unlimited
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potential for career advancement
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,1-2 Test Bank for Kimmel, Financial Accounting: Tools for Business Decision Making, 10e
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Difficulties:
Easy: 143 k



Medium: 101 k



Hard: 12 k




Question List by Section k k k




Business Organization and Accounting Information Uses:
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Forms of Business Organization; 47, 48, 202, 246
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Sole Proprietorship: 5, 44, 49, 58, 59
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Partnership: 1, 4, 46, 56 k k k k



Corporation: 2, 3, 45, 50, 51, 52, 53, 55, 57, 233, 245 k k k k k k k k k k k



Hybrid Forms of Organization: 60, 61 k k k k k



Users and Uses of Financial Information: 6, 7, 11, 74, 87
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Internal Users: 62, 63, 64, 75, 77, 82, 234 k k k k k k k k



External Users: 8, 9, 10, 12, 65, 76, 78, 79, 80, 81, 83, 84, 85, 86, 88, 89
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Data Analytics: 66, 67, 68, 69, 70, 235, 236
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Ethics in Financial Reporting: 71, 72, 73, 237, 255
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The 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
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Investing Activities: 14, 16, 98, 99, 115, 116k k k k k k k



Operating Activities: 17, 19, 20, 100, 101, 103, 104, 105, 106, 107, 108, 110, 111, 112, 113,
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114
The Four Financial Statements:
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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
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Balance Sheet: 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 136, 151, 152, 153, 163, 165, 166, 168,
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170, 173, 177, 179, 180, 182, 185, 186, 187, 188, 199, 200, 201, 207, 208, 213, 214, 215, 216,
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217, 218, 219, 220, 221, 222, 225, 229, 239, 240, 241, 253
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Statement of Cash Flows: 26, 121, 171, 174, 183, 242, 249 k k k k k k k k k k



Interrelationships of Statements: 155, 156, 157, 158, 159, 160, 161, 162, 167, 175, 176, 184, k k k k k k k k k k k k k k



250, 251, 256
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Elements of an Annual Report: 36, 41, 192, 196, 197
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Management Discussion and Analysis: 40, 191 k k k k k



Notes to the Financial Statements: 37, 42, 190, 193, 194, 198, 254
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Auditor‘s Report: 38, 39, 195 k k k k




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, Introduction to Financial Statements k k k 1-3

TRUE-FALSE STATEMENTS k




1. A business organized as a separate legal entity and owned by
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kstockholders is a partnership. k k k


Ans: kF, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kPartnership, kBloom: kK, kDifficulty: kEasy, kMin: k1, kAACSB:
k None, kAICPA kBC: kProcess kand kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




2. Corporate stockholders have no personal liability for the debts of the corporation.
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Ans: kT, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kCorporation, kBloom: kK, kDifficulty: kEasy, kMin: k1, kAACSB:
k None, kAICPA kBC: kProcess kand kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




3. The liability of corporate stockholders is limited to the amount of their investment.
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Ans: kT, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kCorporation, kBloom: kK, kDifficulty: kEasy, kMin: k1, kAACSB:
k None, kAICPA kBC: kProcess kand kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




4. The majority of U.S. business is transacted by partnerships.
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Ans: kF, kLO: k1, kBloom: kK, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kPartnerships, kDifficulty: kEasy, kMin: k1, kAACSB:
k None, kAICPA kBC: kProcess kand kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




5. Sole proprietorships in the United States generate more revenue than the other two forms of
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business enterprise.
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Ans: kF, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kSole kProprietorship, kBloom: kK, kDifficulty: kEasy, kMin: k1,
k AACSB: kNone, kAICPA kBC: kProcess kand kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




6. Owners of business firms are the only people who need accounting information.
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Ans: kF, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kUsers kand kUses kof kFinancial kInformation, kBloom: kK,
k Difficulty: kEasy, k Min: k1, kAACSB: kNone, kAICPA kBC: kProcess kand kResource kManagement kPerspectives, kAICPA kAC: kReporting, kAICPA kPC:

k None, kIMA: kReporting




7. Some users of accounting information are internal to the company while others
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are external.
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Ans: kT, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kUsers kand kUses kof kFinancial kInformation, kBloom: kK,
k Difficulty: kEasy, k Min: k1, kAACSB: kNone, kAICPA kBC: kProcess kand kResource kManagement kPerspectives, kAICPA kAC: kReporting, kAICPA kPC:

k None, kIMA: kReporting




8. Management of a business enterprise is the major external user of
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kaccounting information. k




Ans: kF, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kExternal kUsers, kBloom: kK, kDifficulty: kEasy, kMin: k1,
kAACSB: k None, kAICPA kBC: kProcess k and kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




9. External users of accounting information include managers who plan, organize, and run a
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business.
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Ans: kF, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kExternal kUsers, kBloom: kK, kDifficulty: kEasy, kMin: k1,
kAACSB: k None, kAICPA kBC: kProcess k and kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




10. The accounting information needs and questions of external users vary considerably.
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Ans: kT, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kExternal kUsers, kBloom: kK, kDifficulty: kEasy, kMin: k1,
kAACSB: k None, kAICPA kBC: kProcess k and kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




11. Accounting communicates financial information about a business to both internal
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and external users.
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Ans: kT, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kUsers kand kUses kof kFinancial kInformation, kBloom: kK,
k Difficulty: kEasy, k Min: k1, kAACSB: kNone, kAICPA kBC: kProcess kand kResource kManagement kPerspectives, kAICPA kAC: kReporting, kAICPA kPC:

k None, kIMA: kReporting




12. Two primary external users of accounting information are investors and creditors.
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Ans: kT, kLO: k1, kSection: kBusiness kOrganization kand kAccounting kInformation kUses, kSubsection: kExternal kUsers, kBloom: kK, kDifficulty: kEasy, kMin: k1,
kAACSB: k None, kAICPA kBC: kProcess k and kResource k Management kPerspectives, kAICPA kAC: kReporting, kAICPA kPC: kNone, kIMA: kReporting




.