TEST BANK
Financial Accounting Tools For Business Decision
Making, 10th Edition, Paul D. Kimmel,
Chapters 1 – 13, Complete
Copyrightc©c2022cJohncWileyc&cSons,cInc.c(ForcInstructorcUsecOnly
)
,TABLE OF CONTENTS C C
1 Introduction to Financial Statements
c c c c c
2 A Further Look at Financial Statements
c c c c c c c
3 The Accounting Information System
c c c c c
4 Accrual Accounting Concepts
c c c c
5 Merchandising Operations and the Multiple-Step Income Statement
c c c c c c c c
6 Reporting and Analyzing Inventory
c c c c c
7 Fraud, Internal Control, and Cash
c c c c c c
8 Reporting and Analyzing Receivables
c c c c c
9 Reporting and Analyzing Long-Lived Assets
c c c c c c
10 Reporting and Analyzing Liabilities
c c c c c
11 Reporting and Analyzing Stockholders’ Equity
c c c c c c
12 Statement of Cash Flows
c c c c c
13 Financial Analysis: The Big Picture
c c c c c c
Copyrightc©c2022cJohncWileyc&cSons,cInc.c(ForcInstructorcUsecOnly
)
,CHAPTER 1 c
INTRODUCTION TO FINANCIAL STATEMENTS
c c c
CHAPTERcLEARNINGcOBJECTIVES
1. Identifycthecformscofcbusinesscorganizationcandcthecusescofcaccountingcinformation.cAcsolecproprietor
shipciscacbusinesscownedcbyconecperson.cAcpartnershipciscacbusinesscownedcbyctwocorcmorecpeoplecass
ociatedcascpartners.cAccorporationciscacseparateclegalcentitycforcwhichcevidencecofcownershipciscprovid
edcbycsharescofcstock.cInternalcuserscarecmanagerscwhocneedcaccountingcinformationctocplan,corganize
,candcruncbusinesscoperations.cThecprimarycexternalcuserscarecinvestorscandccreditors.cInvestorsc(stock
holders)cusecaccountingcinformationctocdecidecwhetherctocbuy,chold,corcsellcsharescofcaccompany‘scsto
ck.cCreditorsc(supplierscandcbankers)c usec accountingc informationc toc assesscthec riskc ofc grantingc creditc
orc loaningc moneyctocacbusiness.cOthercgroupscwhochavecancindirectcinterestcincacbusinesscarectaxingcau
thorities,ccustomers,claborcunions,candc regulatorycagencies.
2. Explaincthecthreecprincipalctypescofcbusinesscactivity.cFinancingcactivitiesc involveccollectingcthecneces
sarycfundsctocsupportcthecbusiness.cInvestingcactivitiescinvolvecacquiringcthecresourcescnecessaryctocru
ncthecbusiness.cOperatingcactivitiescinvolvecputtingc thecresourcescofc thecbusinesscintocactionctocgener
atecacprofit.
3. Describecthecfourcfinancialcstatementscandchowctheycarecprepared.cAncincomecstatementcpresentscth
ecrevenuescandcexpensescofcaccompanycforcacspecificcperiodcofctime.cAcretainedcearningscstatementcsu
mmarizescthecchangescincretainedcearningscthatchavecoccurredcforcacspecificcperiodcofctime.cAcbalancec
sheetcreportscthecassets,cliabilities,candcstockholders‘cequitycofcacbusinesscatcacspecificcdate.cAcstateme
ntcofccashcflowsc summarizesc informationcconcerningctheccashcinflowsc(receipts)candcoutflowsc(payme
nts)cforcacspecificcperiodcofctime.cAssetscarecresourcescownedcbycacbusiness.cLiabilitiescarecthecdebtscan
dcobligationscofcthecbusiness.cLiabilitiescrepresentcclaimscofccreditorsconcthecassetscofcthecbusiness.cSto
ckholders‘cequitycrepresentscthecclaimscofcownersconcthecassetscofcthecbusiness.cStockholders‘cequityci
scsubdividedcintoctwocparts:ccommoncstockcandcretainedcearnings.cThecbasiccaccountingcequationciscAs
setsc=cLiabilitiesc+cStockholders‘cEquity.cWithincthecannualcreport,cthecmanagementcdiscussioncandcan
alysiscprovidescmanagement‘scinterpretationcofctheccompany‘scresultscandcfinancialcpositioncascwellcasc
acdiscussioncofcplanscforcthecfuture.cNotesctocthecfinancialcstatementscprovidecadditionalcexplanationco
rcdetailctocmakecthecfinancialcstatementscmorecinformative.cThecauditor‘screportcexpressescancopinionc
asctocwhethercthecfinancialcstatementscpresentcfairlyctheccompany‘scresultscofcoperationscandcfinancialc
position.
*4.cExplainctheccareercopportunitiescincaccounting.cAccountingcofferscmanycdifferentcjobscincfieldscsuchcas
cpubliccandcprivatecaccounting,cgovernmental,candcforensiccaccounting.cAccountingciscacpopularcmajorc
becausectherecarecmanycdifferentctypescofcjobs,cwithcunlimitedcpotentialcforccareercadvancement
Copyrightc©c2022cJohncWileyc&cSons,cInc.c(ForcInstructorcUsecOnly
)
, 2-2 TestcBankcforcKimmel,cFinancialcAccounting:cToolscforcBusinesscDecisioncMaking,c10
e
Difficulties:
Easy:c143
Medium:c101
Hard:c12
QuestioncListcbycSection
BusinesscOrganizationcandcAccountingcInformationcUses:cForm
scofcBusinesscOrganization;c47,c48,c202,c246
SolecProprietorship:c5,c44,c49,c58,c59
Partnership:c1,c4,c46,c56
Corporation:c2,c3,c45,c50,c51,c52,c53,c55,c57,c233,c245
HybridcFormscofcOrganization:c60,c61
UserscandcUsescofc FinancialcInformation:c6,c7,c11,c74,c87
InternalcUsers:c62,c63,c64,c75,c77,c82,c234
ExternalcUsers:c8,c9,c10,c12,c65,c76,c78,c79,c80,c81,c83,c84,c85,c86,c88,c89
DatacAnalytics:c66,c67,c68,c69,c70,c235,c236
EthicscincFinancialcReporting:c71,c72,c73,c237,c255cThec
ThreecTypescofcBusinesscActivity:c97
FinancingcActivities:c13,c15,c18,c90,c91,c93,c94,c95,c96,c97,c102,c109,c117,c118,c119,c238
InvestingcActivities:c14,c16,c98,c99,c115,c116
OperatingcActivities:c17,c19,c20,c100,c101,c103,c104,c105,c106,c107,c108,c110,c111,c112,c113,
114
ThecFourcFinancialcStatements:
IncomecStatement:c21,c22,c23,c24,127,c128,c132,c133,c134,c138,c142,c143
RetainedcEarningscStatement:c120,c122,c123,c 124,c125,c126,c129,c130,c131,c135,c137,c139,c140,
141,c144,c145,c146,c147,c148,c149,c150,c154,c164,c169,c178,c181,c252
BalancecSheet:c25,c27,c28,c29,c30,c31,c32,c33,c34,c35,c136,c151,c152,c153,c163,c165,c166,c168,
170,c173,c177,c179,c180,c182,c185,c186,c187,c188,c199,c200,c201,c207,c208,c213,c214,c215,c216,
217,c218,c219,c220,c221,c222,c225,c229,c239,c240,c241,c253
Statementcofc CashcFlows:c26,c121,c171,c174,c183,c242,c249
InterrelationshipscofcStatements:c155,c156,c157,c158,c159,c160,c161,c162,c167,c175,c176,c184,
250,c251,c256
ElementscofcancAnnualcReport:c36,c41,c192,c196,c197
ManagementcDiscussioncandcAnalysis:c40,c191
NotesctocthecFinancialcStatements:c37,c42,c190,c193,c194,c198,c254
Auditor‘scReport:c38,c39,c195
Copyrightc©c2022cJohncWileyc&cSons,cInc.c(ForcInstructorcUsecOnly
)
