, Module1 -
Financial Accounting for MBAs
- - -
Learning-Objectives-–-Coverage-by-question
True/False Multiple-Choice
LO1-–-Explain-and-assess-the-four-main-business-
activities.
LO2-–-Identify-and-discuss-the-users-and-suppliers-of-
1--4 1,-2
financial-statement-information.
LO3-–-Describe-and-examine-the-four-financial-
5-10 3-19
statements,-and-define-the-accounting-equation.
LO4-–-Explain-and-apply-the-basics-of-profitability-
11-13 20-25
analysis.
LO5-–-Assess-business-operations-within-the-context-
14 26,-27
of-a-competitive-environment.
LO6-–-Access-reports-filed-with-the-SEC-(Appendix-
1A).
LO7-–-Describe-the-accounting-principles-and-
regulations-that-frame-financial-statements-(Appendix- 15 28-30
1B).
These-questions-are-available-to-assign-in-myBusinessCourse.
,Module-1:-Financial-Accounting-for-MBAs
True/False
Topic:-Users-of-Financial-Statement-Information-
LO:-2
1. Shareholders- demand-financial-information-primarily-to-assess-profitability-and-risk-whereas-bankers-
demand-information-primarily-to-assess-cash-flows-to-repay-loan-interest-and-principal.
Answer:-True
Rationale:-While-both-shareholders-and-bankers-are-interested-in-all-the-information-companies-
provide,-shareholders-care-about-more-about-a-company‘s-profitability-and-bankers-care-more-about-
solvency-and-creditworthiness.
Topic:-Publicly-Available-Financial-
Reports-LO:-2
2. Publicly-traded-companies-are-required-to-provide-quarterly-financial-reports-directly-to-the-public.
Answer:-False
Rationale:-Companies-provide-electronic-versions-of-quarterly-financial-statements-to-the-SEC,-which-
posts-them-to-the-Internet-for-the-public-to-access-them.
Topic:-Users-of-Financial-Statement-Information-
LO:-2
3. Publicly-traded-companies-provide-financial-information-primarily-to-satisfy-the-SEC-and-the-tax-authorities-
(that-is,-the-Internal-Revenue-Service).
Answer:-False
Rationale:-Demand-for-information-extends-to-many-users;-the-regulators-such-as-the-SEC-and-the-IRS-
are-only-one-class-of-users.
Topic:-SEC-
Filings-LO:-2
4. Publicly-traded-companies-must-provide-to-the-Securities-Exchange-Commission-annual-audited-financial-
statements-(10-K-reports)-and-quarterly-audited-financial-statements-(10-Q-reports).
Answer:-False
Rationale:-Quarterly-reports-do-not-need-to-be-audited.
Topic:-Balance-
Sheet-LO:-3
5. If-a-company-reports-retained-earnings-of-$175.3-million-on-its-balance-sheet,-it-must-also-report-$175.3-
million-in-cash.
Answer:-False
, Rationale:-The- accounting- equation- requires- total-assets- to- equal-total- liabilities- plus- stockholders‘-
equity.-That-does-not-imply,-however,-that-liability-and-equity-accounts-relate-directly-to-specific-assets.
Financial Accounting for MBAs
- - -
Learning-Objectives-–-Coverage-by-question
True/False Multiple-Choice
LO1-–-Explain-and-assess-the-four-main-business-
activities.
LO2-–-Identify-and-discuss-the-users-and-suppliers-of-
1--4 1,-2
financial-statement-information.
LO3-–-Describe-and-examine-the-four-financial-
5-10 3-19
statements,-and-define-the-accounting-equation.
LO4-–-Explain-and-apply-the-basics-of-profitability-
11-13 20-25
analysis.
LO5-–-Assess-business-operations-within-the-context-
14 26,-27
of-a-competitive-environment.
LO6-–-Access-reports-filed-with-the-SEC-(Appendix-
1A).
LO7-–-Describe-the-accounting-principles-and-
regulations-that-frame-financial-statements-(Appendix- 15 28-30
1B).
These-questions-are-available-to-assign-in-myBusinessCourse.
,Module-1:-Financial-Accounting-for-MBAs
True/False
Topic:-Users-of-Financial-Statement-Information-
LO:-2
1. Shareholders- demand-financial-information-primarily-to-assess-profitability-and-risk-whereas-bankers-
demand-information-primarily-to-assess-cash-flows-to-repay-loan-interest-and-principal.
Answer:-True
Rationale:-While-both-shareholders-and-bankers-are-interested-in-all-the-information-companies-
provide,-shareholders-care-about-more-about-a-company‘s-profitability-and-bankers-care-more-about-
solvency-and-creditworthiness.
Topic:-Publicly-Available-Financial-
Reports-LO:-2
2. Publicly-traded-companies-are-required-to-provide-quarterly-financial-reports-directly-to-the-public.
Answer:-False
Rationale:-Companies-provide-electronic-versions-of-quarterly-financial-statements-to-the-SEC,-which-
posts-them-to-the-Internet-for-the-public-to-access-them.
Topic:-Users-of-Financial-Statement-Information-
LO:-2
3. Publicly-traded-companies-provide-financial-information-primarily-to-satisfy-the-SEC-and-the-tax-authorities-
(that-is,-the-Internal-Revenue-Service).
Answer:-False
Rationale:-Demand-for-information-extends-to-many-users;-the-regulators-such-as-the-SEC-and-the-IRS-
are-only-one-class-of-users.
Topic:-SEC-
Filings-LO:-2
4. Publicly-traded-companies-must-provide-to-the-Securities-Exchange-Commission-annual-audited-financial-
statements-(10-K-reports)-and-quarterly-audited-financial-statements-(10-Q-reports).
Answer:-False
Rationale:-Quarterly-reports-do-not-need-to-be-audited.
Topic:-Balance-
Sheet-LO:-3
5. If-a-company-reports-retained-earnings-of-$175.3-million-on-its-balance-sheet,-it-must-also-report-$175.3-
million-in-cash.
Answer:-False
, Rationale:-The- accounting- equation- requires- total-assets- to- equal-total- liabilities- plus- stockholders‘-
equity.-That-does-not-imply,-however,-that-liability-and-equity-accounts-relate-directly-to-specific-assets.
