Test Bank For Financial Accounting For MBAs ( 8th Edition) By Easton And John Wild||LATEST UPDATE 2024

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, Module 1 M




Financial Accounting for MBAs M M M




Learning Objectives – Coverage by question M M M M M



True/False Multiple Choice
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LO1 – M


Explain and assess the four main business activities.
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LO2 – M
1- 4 M 1, 2
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MIdentify and discuss the users and suppliers of finan
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cial statement information.
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LO3 – M
5-10 3-19
MDescribe and examine the four financial statements,
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and define the accounting equation.
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LO4 – M
11-13 20-25
Explain and apply the basics of profitability analysis.
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LO5 – M
14 26, 27
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Assess business operations within the context of a c
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ompetitive environment.
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LO6 – M


MAccess reports filed with the SEC (Appendix 1A).
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LO7 – M


MDescribe the accounting principles and regulations t
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hat frame financial statements (Appendix 1B).
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These questions are available to assign in myBusinessCourse.
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, Module 1: Financial Accounting for MBAs
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True/False


Topic: Users of Financial Statement Information L
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O: 2 M


1. Shareholders demand financial information primarily to assess profitability and risk whereas bankers
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demand information primarily to assess cash flows to repay loan interest and principal.
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Answer: True M


Rationale: While both shareholders and bankers are interested in all the information companies pro
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vide, shareholders care about more about a company‘s profitability and bankers care more about so
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lvency and creditworthiness.
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Topic: Publicly Available Financial Report
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s LO: 2
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2. Publicly traded companies are required to provide quarterly financial reports directly to the public.
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Answer: False M


Rationale: Companies provide electronic versions of quarterly financial statements to the SEC, which
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Mposts them to the Internet for the public to access them.
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Topic: Users of Financial Statement Information L
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O: 2 M


3. Publicly traded companies provide financial information primarily to satisfy the SEC and the tax authoriti
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es (that is, the Internal Revenue Service).
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Answer: False M


Rationale: Demand for information extends to many users; the regulators such as the SEC and the I
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RS are only one class of users.
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Topic: SEC FilingM M


s LO: 2
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4. Publicly traded companies must provide to the Securities Exchange Commission annual audited financi
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al statements (10-K reports) and quarterly audited financial statements (10-Q reports).
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Answer: False M


Rationale: Quarterly reports do not need to be audited.
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Topic: Balance Shee
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t LO: 3
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5. If a company reports retained earnings of $175.3 million on its balance sheet, it must also report $175.
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3 million in cash.
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Answer: False M