TEST BANK for Financial Accounting for MBAs 8th Edition by Peter Easton & John Wild contains verified questions and answers graded A+

, Module1 f




FinancialAccountingfor MBAs jh




Learning Objectives – Coverage by question ff ff ff ff ff



True/False Multiple Choice
jh




LO1 – Explain and assess the four main business
jh jh jh jh jh jh jh jh


activities.
jh




LO2 – Identify and discuss the users and suppliers
jh jh jh jh jh jh jh jh
1- 4
jh 1, 2
jh
of financial statement information.
jh jh jh jh




LO3 – Describe and examine the four financial
jh jh jh jh jh jh
5-10 3-19
jh


statements, and define the accounting equation.
jh jh jh jh jh jh




LO4 – Explain and apply the basics of profitability
jh jh jh jh jh jh jh jh
11-13 20-25
analysis.
jh




LO5 – Assess business operations within the context
jh jh jh jh jh jh jh
14 26, 27
jh
of a competitive environment.
jh jh jh jh




LO6 – Access reports filed with the SEC (Appendix
jh jh jh jh jh jh jh jh


1A).
jh




LO7 – Describe the accounting principles and
jh jh jh jh jh jh


regulations that frame financial statements
jh jh jh jh jh 15 28-30
(Appendix 1B).
jh jh




These questions are available to assign in myBusinessCourse.
jh jh jh jh jh jh jh

,Module 1: Financial Accounting for MBAs
ff ff ff ff ff




True/False


Topic: Users of Financial Statement
jh jh jh jh


Information LO: 2
jh jh jh


1. Shareholders demand financial information primarily to assess profitability and risk whereas
j h jh jh jh jh jh jh jh jh jh

bankers demand information primarily to assess cash flows to repay loan interest and principal.
jh jh jh jh jh jh jh jh jh jh jh jh jh jh




Answer: True jh


Rationale: While both shareholders and bankers are interested in all the information companies
jh jh jh jh jh jh jh jh jh jh jh jh


provide, shareholders care about more about a company‘s profitability and bankers
jh j h j h j h j h j h j h j h j h j h j h


care more about solvency and creditworthiness.
j h j h jh jh jh jh




Topic: Publicly Available Financial
jh jh jh


Reports LO: 2
jh jh jh


2. Publicly traded companies are required to provide quarterly financial reports directly to the public.
jh jh jh jh jh jh jh jh jh jh jh jh jh




Answer: False jh


Rationale: Companies provide electronic versions of quarterly financial statements to the SEC,
jh jh jh jh jh jh jh jh jh jh jh


which posts them to the Internet for the public to access them.
jh jh jh jh jh jh jh jh jh jh jh jh




Topic: Users of Financial Statement
jh jh jh jh


Information LO: 2
jh jh jh


3. Publicly traded companies provide financial information primarily to satisfy the SEC and the tax
jh jh jh jh jh jh jh jh jh jh jh jh jh

authorities (that is, the Internal Revenue Service).
jh jh jh jh jh jh jh




Answer: False jh


Rationale: Demand for information extends to many users; the regulators such as the SEC and
jh jh jh jh jh jh jh jh jh jh jh jh jh jh


the IRS are only one class of users.
jh jh jh jh jh jh jh jh




Topic: SEC Filings
jh jh


LO: 2
jh jh


4. Publicly traded companies must provide to the Securities Exchange Commission annual
jh jh jh jh jh jh jh jh jh jh

audited financial statements (10-K reports) and quarterly audited financial statements (10-
jh jh jh jh jh jh jh jh jh jh jh

Q reports).jh




Answer: False jh


Rationale: Quarterly reports do not need to be audited.
jh jh jh jh jh jh jh jh




Topic: Balance Sheet
jh jh

LO: 3
jh jh


5. If a company reports retained earnings of $175.3 million on its balance sheet, it must also report
jh jh jh jh jh jh jh jh jh jh jh jh jh jh jh jh

$175.3 million in cash. jh jh jh




Answer: False jh

, Rationale: The accounting
jh j h equation requiresj total assets
h j h to equal total
j h jh j h j h jh j h liabilities
j plus stockholders‘ equity. That does not imply, however, that liability and equity
h jh jh h
j h
j h
j jh jh h
j jh h
j jh


accounts relate directly to specific assets.
jh h
j h
j h
j jh h
j