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SOLUTION MANUAL financial accounting tools for business decision making 10th edition kimmel, weygandt j all chapters 1-13 $18.49
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SOLUTION MANUAL financial accounting tools for business decision making 10th edition kimmel, weygandt j all chapters 1-13
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Solution manual for financial accounting tools for business decision making 10th edition paul d kimmel CHAPTER1 IntroductiontoFinancialStatements LearningObjectives 1. 2. 3. *4. Identifytheformsofbusinessorganizationandtheusesofaccountinginformation. Explainthethreeprincipaltypesof...

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  • September 25, 2024
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  • 2024/2025
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SOLUTION MANUAL
financial accounting tools for business decision
making 10th edition
kimmel, weygandt j
all chapters 1-13




Copyright©JohnWiley&Sons,Inc. SolutionsManual (ForInstructorUseOnly) 1

, CHAPTER1
IntroductiontoFinancialStatements

LearningObjectives

1. Identifytheformsofbusinessorganizationandtheusesofaccountinginformation.
2. Explainthethreeprincipaltypesofbusinessactivity.
3. Describethe fourfinancialstatementsandhowtheyareprepared.
*4. Explainthecareer opportunitiesinaccounting.




ANSWERSTOQUESTIONS

1. Thethreebasicformsofbusinessorganizationsare(1)soleproprietorship,(2)partnership,and
(3)corporation.
LO1 BT:K Difficulty:E TOT:1min.AACSB:KnowledgeAICPABC:GovernancePerspective

2. Advantagesofacorporationarelimitedliability(stockholdersnotbeingpersonallyliableforcor-
poratedebts),easytransferabilityofownership,andeaseofraisingfunds.Disadvantagesofacorporationareincrease
d taxationandgovernmentregulations.

LO1 BT:K Difficulty:E TOT:1min.AACSB:KnowledgeAICPABC:GovernancePerspective

3. Proprietorshipsandpartnershipsreceivefavorabletaxtreatmentcompared
tocorporationsandareeasiertoformthancorporations.Theyarealsoownercontrolled.Disadvantagesofproprietorship
sandpartnershipsareunlimitedliability(proprietors/partnersarepersonallyliablefor alldebts)
anddifficultyinobtainingfinancingcomparedtocorporations.
LO1 BT:K Difficulty:E TOT:1min.AACSB:KnowledgeAICPABC:GovernancePerspective

4.Yes.Companiescanchooseoneofthehybridbusinessforms,limitedliabilitycorporations(LLCs)orsubchapterScorporations
,whichcombinethetaxadvantagesofpartnershipswiththelimitedliabilityofcorporations.
LO1 BT:K Difficulty:E TOT:1 min.AACSB:KnowledgeAICPABC:GovernancePerspective

5. Yes.Apersoncannotearnaliving,spendmoney,buyoncredit,makeaninvestment,orpaytaxeswithoutreceiving,using,o
rdispensingfinancialinformation.Accountingprovidesfinancialinformationtointerestedusersthroughthe
preparationanddistribution offinancialstatements.
LO1 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

6. Internalusersaremanagerswhoplan,organize,andrunabusiness.Toassistmanagement,accountingprovidestimelyint
ernalreports.Examplesincludefinancialcomparisonsofoperating


2 Copyright©JohnWiley&Sons,Inc. SolutionsManual (ForInstructorUseOnly)

, alternatives,projectionsofincomefromnewsalescampaigns,forecastsofcashneedsforthenextyear,andfinancialsta
tements.

LO1 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

7. Externalusersarethoseoutsidethebusinesswhohaveeitherapresentorpotentialdirectfinancialinterest(investorsandc
reditors) oranindirectfinancialinterest(taxingauthorities,regu-latoryagencies,labor
unions,customers,andeconomicplanners).
LO1 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

8.Thefourmostcommontypesofdataanalyticsandthebasicquestioneachaddressesare:Descriptive(Whathappened?),Dia
gnostic(Whydidithappen?),Predictive(Whatislikelytohappen?),andPrescriptive(Whatshouldwe doaboutit?).

LO1 BT:K Difficulty:E TOT:2min.AACSB:nowledgeAICPAAC:MeasurementAnalysisandInterpretation



QuestionsChapter1(Continued)

9.Thethreetypesofbusinessactivitiesarefinancingactivities,investingactivities,andoperatingactivities.Financingactivitiesi
ncludeborrowingmoneyandsellingsharesofstock.Investingactivitiesincludethepurchaseandsaleofproperty,plant,a
ndequipment.Operatingactivitiesincludeselling goods,performingservices, andpurchasing inventory.

LO2 BT:C Difficulty:M TOT:2min.AACSB:KnowledgeAICPAAC:Reporting

10.(a) Incomestatement. (d) Balancesheet.
(b) Balancesheet. (e) Balancesheet.
(c) Incomestatement. (f) Balancesheet.

LO3 BT:K Difficulty:M TOT:2min.AACSB:KnowledgeAICPAAC:Reporting

11. Whenacompanypaysdividends,itreducestheamountofassetsavailabletopaycreditors.Therefore,banksandotherc
reditorsmonitordividendpaymentstoensuretheydonotputacompany’sabilitytomake debtpaymentsatrisk.

LO3 BT:C Difficulty:M TOT:2min.AACSB:KnowledgeAICPAAC:MeasurementAnallysisandInterpretation

12. Yes.Netincomedoesappearontheincomestatement—
itistheresultofsubtractingexpensesfromrevenues.Inaddition,netincomeappearsintheretainedearningsstatement—
itisshownasanadditiontothebeginning-of-
periodretainedearnings.Indirectly,thenetincomeofacompanyisalsoincludedinthebalancesheet.Itisincludedintheret
ainedearningsaccountwhichappearsinthestockholders’equitysectionofthebalancesheet.

LO3 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

13. Theprimarypurposeofthestatementofcashflowsistoprovidefinancialinformationaboutthecashreceiptsandcashpay
mentsofabusinessforaspecificperiod oftime.

LO3 BT:K Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting




Copyright©JohnWiley&Sons,Inc. SolutionsManual (ForInstructorUseOnly) 3

, 14. Thethreecategoriesofthestatementofcashflowsareoperatingactivities,investingactivities,andfinancingactivities.Th
ecategorieswerechosenbecausetheyrepresentthethreeprincipaltypesofbusinessactivities.

LO3 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

15. Retainedearningsisthenetincomeretainedinacorporation.Retainedearningsisincreasedbynetincome
andisdecreasedbydividendsandanetloss.

LO3 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

16. ThebasicaccountingequationisAssets=Liabilities+Stockholders’Equity.

LO3 BT:K Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

17. (a)Assetsareresourcesownedbyabusiness.Liabilitiesareamountsowedtocreditors.Putmoresimply,liabilitiesareexisting
debtsandobligations.Stockholders’equityistheownershipclaimonnetassets.

(b) The items that affectstockholders’ equityareissuance of common stock and thecomponents
ofretainedearnings(dividends,revenues,andexpenses).

LO3 BT:K Difficulty:E TOT:2min.AACSB:KnowledgeAICPAAC:Reporting

18. Theliabilitiesare(b) Accountspayableand(g)Salariesandwagespayable.

LO3 BT:C Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

19. (a)
Netincomefromtheincomestatementisreportedasanincreasetoretainedearningsontheretainedearningsst
atement.

(b) Theendingamountontheretainedearningsstatementisreportedastheretainedearningsamountonthebalances
heet.

(c) Theendingamountonthestatementofcashflowsisreportedasthecashamountonthebalancesheet.

LO3 BT:C Difficulty:M TOT:2min.AACSB:KnowledgeAICPAAC:Reporting

20. Thepurposeofthemanagementdiscussionandanalysissectionistoprovidemanagement’sviewsonitsabilitytopaysho
rt-termobligations,itsabilitytofundoperationsandexpansion,anditsresultsofoperations.The MD&Asectionisa
requiredpartoftheannualreport.

LO3 BT:K Difficulty:E TOT:1min.AACSB:KnowledgeAICPAAC:Reporting

21. Anunqualifiedopinionshowsthat,intheopinionofanindependentauditor,thefinancialstate-
mentshavebeenpresentedfairly,inconformitywithgenerallyacceptedaccountingprinciples.Thisgivesinvestorsmore
confidencethattheycanrelyonthefiguresreportedinthefinancialstatements.

LO3 BT:C Difficulty:E TOT:2min.AACSB:KnowledgeAICPAAC:Reporting




4 Copyright©JohnWiley&Sons,Inc. SolutionsManual (ForInstructorUseOnly)

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