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 VZ VZ
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 vz
INTRODUCTION TO FINANCIAL STATEMENTS vz vz vz
CHAPTER LEARNING OBJECTIVES vz vz
1. Identify the forms of business organization and the uses of accounting information. A sole proprieto
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rship is a business owned by one person. A partnership is a business owned by two or more people as
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sociated as partners. A corporation is a separate legal entity for which evidence of ownership is provid
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ed by shares of stock. Internal users are managers who need accounting information to plan, organize
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, and run business operations. The primary external users are investors and creditors. Investors (stock
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holders) use accounting information to decide whether to buy, hold, or sell shares of a company‘s sto
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ck. Creditors (suppliers and bankers) use accounting information to assess the risk of granting credit
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or loaning money toa business. Other groups who have an indirect interest in a business are taxing a
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uthorities, customers, labor unions, and regulatory agencies. vz vz vz vz vz vz
2. Explain the three principal types of business activity. Financing activities involve collecting the nece
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ssary funds to support the business. Investing activities involve acquiring the resources necessary to r
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un the business. Operating activities involve putting the resources of the business into action to gen
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erate a profit. vz vz
3. Describe the four financial statements and how they are prepared. An income statement presents th
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e revenues and expenses of a company for a specific period of time. A retained earnings statement su
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mmarizes the changes in retained earnings that have occurred for a specific period of time. A balance
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sheet reports the assets, liabilities, and stockholders‘ equity of a business at a specific date. A stateme
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nt of cash flows summarizes information concerning the cash inflows (receipts) and outflows (paym
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ents) for a specific period of time. Assets are resources owned by a business. Liabilities are the debts a
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nd obligations of the business. Liabilities represent claims of creditors on the assets of the business. St
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ockholders‘ equity represents the claims of owners on the assets of the business. Stockholders‘ equity
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is subdivided into two parts: common stock and retained earnings. The basic accounting equation is
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Assets = Liabilities + Stockholders‘ Equity. Within the annual report, the management discussion and
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analysis provides management‘s interpretation of the company‘sresults and financial position as well
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as a discussion of plans for the future. Notes to the financial statements provide additional explanatio
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n or detail to make the financial statements more informative. The auditor‘s report expresses an opini
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on as to whether the financialstatements present fairly the company‘s results of operations and finan
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cial position. vz
*4. Explain the career opportunities in accounting. Accounting offers many different jobs in fields such as
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public and private accounting, governmental, and forensic accounting. Accounting is a popular major
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because there are many different types of jobs, with unlimited potential for career advancement
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Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only)
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, 2-2 Test Bank for Kimmel, Financial Accounting: Tools for Business Decision Making, 10
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e
Difficulties:
Easy: 143 vz
Medium: 101 vz
Hard: 12 vz
Question List by Section vz vz vz
Business Organization and Accounting Information Uses:Form
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s 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 vz vz vz vz
Corporation: 2, 3, 45, 50, 51, 52, 53, 55, 57, 233, 245 vz vz vz vz vz vz vz vz vz vz vz
Hybrid Forms of Organization: 60, 61 vz vz vz vz vz
Users and Uses of Financial Information: 6, 7, 11, 74, 87
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Internal Users: 62, 63, 64, 75, 77, 82, 234 vz vz vz vz vz vz vz vz
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, 255The
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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, 116 vz vz vz vz vz vz vz
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, vz vz vz vz vz vz vz vz vz vz vz vz vz vz vz vz vz vz vz
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 vz vz vz vz vz vz vz vz vz vz
Interrelationships of Statements: 155, 156, 157, 158, 159, 160, 161, 162, 167, 175, 176, 184, vz vz vz vz vz vz vz vz vz vz vz vz vz vz
250, 251, 256
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Elements of an Annual Report: 36, 41, 192, 196, 197 vz vz vz vz vz vz vz vz vz
Management Discussion and Analysis: 40, 191 vz vz vz vz vz
Notes to the Financial Statements: 37, 42, 190, 193, 194, 198, 254
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Auditor‘s Report: 38, 39, 195 vz vz vz vz
Copyright © 2022 John Wiley & Sons, Inc. (For Instructor Use Only)
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