MGRADES
MBA Accounting Exam 1 UPDATED Exam
Questions and CORRECT Answers
4 types of activities businesses engage in - CORRECT ANSWER - Planning, Financing,
Investing, Engaging in operations
Managers & Employees Demand for financial information - CORRECT ANSWER -
Interested in the company's current and future health.
What is performing well? Have we reached a level to pay bonuses?
Investment Analysts & Information Intermediaries Demand for financial information -
CORRECT ANSWER - Business writers and commentators, interested in predicting
company's future performance. These expectation impact stock prices.
What is expected profit? How does the current economic world affect company's future?
Creditors and Suppliers Demand for Financial Information - CORRECT ANSWER -
Helps determine loan terms, amounts, interest rates, and covenants (restricting borrower
behavior, rule to keep loan)
Should we extend credit to this company? What should be the interest rate? Is company
following all covenants?
Stockholders & Directors Demand for financial Information - CORRECT ANSWER -
Assesing profitability and risk of companies. Form a buy/sell strategy, and leadership decisions?
Is company using the resources well?
, MGRADES
Customers and Strategic Partners demand for financial infromation - CORRECT
ANSWER - Asses company's ability to provide products and service. Reliability staying
power.
Is this company a reliable supplier? Is this partnership benefitting both?
Regulators and Agencies - CORRECT ANSWER - FTC, SEC, anti-trust assements.
2 Forms publicly traded firms must disclose - CORRECT ANSWER - Form 10-k & Form
10-q
Form 10-k - CORRECT ANSWER - the audited annual report that includes the four
financial statements with explanatory notes and the management's discussion and analysis
(MD&A) of financial results
Form 10-Q - CORRECT ANSWER - the unaudited quarterly report that publicly traded
companies must file with the SEC
Benefits of disclosure - CORRECT ANSWER - Reap benefits with good news, economic
incentive.
Cost of disclosure - CORRECT ANSWER - Preparation and dissemination for audits,
competitive disadvantages, litigation potential, reputation
Regulation Fair Disclosure (Reg FD) - CORRECT ANSWER - Curbs practice of selective
disclosure by public companies to only certain stockholders/ analysts. Must inform all parties
with form 8-K
IFRS - CORRECT ANSWER - International Financial Reporting Standards. International
accounting standards promulgated by the International Accounting Standards Board. For NON
USA.
MBA Accounting Exam 1 UPDATED Exam
Questions and CORRECT Answers
4 types of activities businesses engage in - CORRECT ANSWER - Planning, Financing,
Investing, Engaging in operations
Managers & Employees Demand for financial information - CORRECT ANSWER -
Interested in the company's current and future health.
What is performing well? Have we reached a level to pay bonuses?
Investment Analysts & Information Intermediaries Demand for financial information -
CORRECT ANSWER - Business writers and commentators, interested in predicting
company's future performance. These expectation impact stock prices.
What is expected profit? How does the current economic world affect company's future?
Creditors and Suppliers Demand for Financial Information - CORRECT ANSWER -
Helps determine loan terms, amounts, interest rates, and covenants (restricting borrower
behavior, rule to keep loan)
Should we extend credit to this company? What should be the interest rate? Is company
following all covenants?
Stockholders & Directors Demand for financial Information - CORRECT ANSWER -
Assesing profitability and risk of companies. Form a buy/sell strategy, and leadership decisions?
Is company using the resources well?
, MGRADES
Customers and Strategic Partners demand for financial infromation - CORRECT
ANSWER - Asses company's ability to provide products and service. Reliability staying
power.
Is this company a reliable supplier? Is this partnership benefitting both?
Regulators and Agencies - CORRECT ANSWER - FTC, SEC, anti-trust assements.
2 Forms publicly traded firms must disclose - CORRECT ANSWER - Form 10-k & Form
10-q
Form 10-k - CORRECT ANSWER - the audited annual report that includes the four
financial statements with explanatory notes and the management's discussion and analysis
(MD&A) of financial results
Form 10-Q - CORRECT ANSWER - the unaudited quarterly report that publicly traded
companies must file with the SEC
Benefits of disclosure - CORRECT ANSWER - Reap benefits with good news, economic
incentive.
Cost of disclosure - CORRECT ANSWER - Preparation and dissemination for audits,
competitive disadvantages, litigation potential, reputation
Regulation Fair Disclosure (Reg FD) - CORRECT ANSWER - Curbs practice of selective
disclosure by public companies to only certain stockholders/ analysts. Must inform all parties
with form 8-K
IFRS - CORRECT ANSWER - International Financial Reporting Standards. International
accounting standards promulgated by the International Accounting Standards Board. For NON
USA.
