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

Test Bank For Financial Accounting For Mbas 8th
Edition By Easton

, Module 1
Financial Accounting For Mbas
Learning Objs – 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 Of
14 26, 27
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.




© Cambridge Business Publishers, 2021
1-1 Financial Accounting For Mbas, 8 th Edition

,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.

Ans::-True
Reasoning:->>->>>Wh ile Both Shareholders And Bankers Are Interested In All The Information Companies
Provide, Shareholders Care About More About A Firm’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.

Ans::-False
Reasoning:->>->>>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).

Ans::-False
Reasoning :->>->>>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).

Ans::-False
Reasoning:->>->>>Quarterly Reports Do Not Need To Be Audited.


Topic:Balance Sheet
Lo: 3
5. If A Firm Reports Retained Earnings Of $175.3 Million On Its Balance Sheet, It Must Also Report
$175.3 Million In Cash.

Ans::-False
Reasoning:->>->>>The Accounting Equation Requires Total Assets To Equal Total Liabilit ies Plus
Stockholders’ Equity. That Does Not Imply, However, That Liability And Equity Accounts Relate Direct ly To
Specific Assets.


© Cambridge Business Publishers, 2021
Test Bank (T/F & Mc), Module 1 1-2

, Topic:Balance Sheet
Lo: 3
6. A Balance Sheet Shows A Firm’s Position Over A Period Of Time, Whereas An Income Statement,
Statement Of Stockholders’ Equity, And Statement Of Cash Flows Show Its Position At A Point In Time.

Ans::-False
Reasoning:->>->>>The Statement Is Reversed: A Balance Sheet Shows A Firm’s Posit ion At A Po int In Time,
Whereas An Income Statement, Statement Of Equity, And Statement Of Cash Flows Show Its Position Over A
Period Of Time.


Topic:Accounting
Equation Lo: 3
7. Assets Must Always Equal Liabilities Plus Equity.

Ans::-True
Reasoning:->>->>>The Accounting Equation Is Assets = Liabilities + Equity. This Relation Must Always Hold.


Topic:Income Statement Lo:
3
8. The Income Statement Reports Net Income Which Is Defined As The Firm’s Profit After All Expenses And
Dividends Have Been Paid.

Ans::-False
Reasoning:->>->>>The Statement Contains Two Errors. First, Net Income Does Not Include Any Dividends
Durin g The Period; These Are A Distribution Of Profits And Not Part Of Its Calculation. Second, The Income
Statement Is Prepared On An Accrual Basis And Thus Includes Expenses Incurred (As Opposed To Paid).


Topic:Statement Of Cash
Flows Lo: 3
9. A Statement Of Cash Flows Reports On Cash Flows For Operating, Investing And Financing Activities At A
Point In Time.

Ans::-False
Reasoning:->>->>>A Statement Of Cash Flows Reports On Cash Flows For Operating, Investing, And
Financing Activities Over A Period Of Time.


Topic:Statement Of Stockholders’ Equity Lo:
3
10. An Increase In Common Stock Would Be Reflected In The Statement Of Stockholders’ Equity.

Ans::-True
Reasoning:->>->>>The Statement Of Stockholders’ Equity Reports On Changes In The Accounts That Make
Up Stockholders’ Equity. This Includes Contributed Capital, Retained Earnings, And Other Equity.




1-3 Financial Accounting For Mbas, 8 th Edition