Test Bank for
zs zs
Financial Accounting
zs zs
for MBAs 8th Edition
zs zs zs zs
by Easton
zs zs
, Module 1 zs
Financial Accounting for MBAs
zs zs zs
Learning Objectives – Coverage by question
True/False Multiple zsChoice
LO1 zs– zsExplain zsand zsassess zsthe zsfour zsmain
zsbusiness zsactivities.
LO2 zs– zsIdentify zsand zsdiscuss zsthe zsusers zsand
1- zs4 1, zs2
zssuppliers zsof zsfinancial zsstatement zsinformation.
LO3 zs– zsDescribe zsand zsexamine zsthe zsfour
5-10 3-19
zsfinancial zsstatements, zsand zsdefine zsthe
zsaccounting zsequation.
LO4 zs– zsExplain zsand zsapply zsthe zsbasics zsof
11-13 20-25
zsprofitability zsanalysis.
LO5 zs– zsAssess zsbusiness zsoperations zswithin zsthe
14 26, zs27
zscontext zsof zsa zscompetitive zsenvironment.
LO6 zs– zsAccess zsreports zsfiled zswith zsthe zsSEC
zs(Appendix zs1A).
LO7 zs– zsDescribe zsthe zsaccounting zsprinciples
zsand zsregulations zsthat zsframe zsfinancial 15 28-30
zsstatements zs(Appendix zs1B).
These zsquestions zsare zsavailable zsto zsassign zsin zsmyBusinessCourse.
,Module zs1: zsFinancial zsAccounting zsfor zsMBAs
True/False
Topic: zsUsers zsof zsFinancial zsStatement
zsInformation zsLO: zs2
1. Shareholders zsdemand zsfinancial zsinformation zsprimarily zsto zsassess zsprofitability zsand zsrisk
zswhereas zsbankers z s demand zsinformation zsprimarily zsto zsassess zscash zsflows zsto zsrepay zsloan
zsinterest zsand zsprincipal.
Answer: zsTrue
Rationale: zsWhile zsboth zsshareholders zsand zsbankers zsare zsinterested zsin zsall zsthe
zsinformation zscompanies zsprovide, zsshareholders zscare zsabout zsmore zsabout zsa zscompany‘s
zsprofitability zsand zsbankers zscare zsmore zsabout zssolvency zsand zscreditworthiness.
Topic: zsPublicly zsAvailable zsFinancial
zsReports zsLO: zs2
2. Publicly zstraded zscompanies zsare zsrequired zsto zsprovide zsquarterly zsfinancial zsreports zsdirectly zsto zsthe
zspublic.
Answer: zsFalse
Rationale: zsCompanies zsprovide zselectronic zsversions zsof zsquarterly zsfinancial zsstatements zsto
zsthe zsSEC, zswhich z s posts zsthem zsto zsthe zsInternet zsfor zsthe zspublic zsto zsaccess zsthem.
Topic: zsUsers zsof zsFinancial zsStatement
zsInformation zsLO: zs2
3. Publicly zstraded zscompanies zsprovide zsfinancial zsinformation zsprimarily zsto zssatisfy zsthe zsSEC zsand
zsthe zstax zsauthorities zs(that zsis, zsthe zsInternal zsRevenue zsService).
Answer: zsFalse
Rationale: zsDemand zsfor zsinformation zsextends zsto zsmany zsusers; zsthe zsregulators zssuch zsas
zsthe zsSEC zsand zsthe zsIRS zsare zsonly zsone zsclass zsof zsusers.
Topic: zsSEC
zsFilings zsLO: zs2
4. Publicly zstraded zscompanies zsmust zsprovide zsto zsthe zsSecurities zsExchange zsCommission zsannual
zsaudited zsfinancial zsstatements zs(10-K zsreports) zsand zsquarterly zsaudited zsfinancial zsstatements
zs(10-Q zsreports).
Answer: zsFalse
Rationale: zsQuarterly zsreports zsdo zsnot zsneed zsto zsbe zsaudited.
Topic: zsBalance
zsSheet zsLO: zs3
5. If zsa zscompany zsreports zsretained zsearnings zsof zs$175.3 zsmillion zson zsits zsbalance zssheet, zsit
zsmust zsalso zsreport zs$175.3 zsmillion zsin zscash.
Answer: zsFalse
, Rationale: zsThe z s accounting z s equation z s requires z s total zsassets z s to z s equal zstotal z s liabilities
z s plus z s stockholders‘ zsequity. zsThat zsdoes zsnot zsimply, zshowever, zsthat zsliability zsand zsequity
zsaccounts zsrelate zsdirectly zsto zsspecific zsassets.
zs zs
Financial Accounting
zs zs
for MBAs 8th Edition
zs zs zs zs
by Easton
zs zs
, Module 1 zs
Financial Accounting for MBAs
zs zs zs
Learning Objectives – Coverage by question
True/False Multiple zsChoice
LO1 zs– zsExplain zsand zsassess zsthe zsfour zsmain
zsbusiness zsactivities.
LO2 zs– zsIdentify zsand zsdiscuss zsthe zsusers zsand
1- zs4 1, zs2
zssuppliers zsof zsfinancial zsstatement zsinformation.
LO3 zs– zsDescribe zsand zsexamine zsthe zsfour
5-10 3-19
zsfinancial zsstatements, zsand zsdefine zsthe
zsaccounting zsequation.
LO4 zs– zsExplain zsand zsapply zsthe zsbasics zsof
11-13 20-25
zsprofitability zsanalysis.
LO5 zs– zsAssess zsbusiness zsoperations zswithin zsthe
14 26, zs27
zscontext zsof zsa zscompetitive zsenvironment.
LO6 zs– zsAccess zsreports zsfiled zswith zsthe zsSEC
zs(Appendix zs1A).
LO7 zs– zsDescribe zsthe zsaccounting zsprinciples
zsand zsregulations zsthat zsframe zsfinancial 15 28-30
zsstatements zs(Appendix zs1B).
These zsquestions zsare zsavailable zsto zsassign zsin zsmyBusinessCourse.
,Module zs1: zsFinancial zsAccounting zsfor zsMBAs
True/False
Topic: zsUsers zsof zsFinancial zsStatement
zsInformation zsLO: zs2
1. Shareholders zsdemand zsfinancial zsinformation zsprimarily zsto zsassess zsprofitability zsand zsrisk
zswhereas zsbankers z s demand zsinformation zsprimarily zsto zsassess zscash zsflows zsto zsrepay zsloan
zsinterest zsand zsprincipal.
Answer: zsTrue
Rationale: zsWhile zsboth zsshareholders zsand zsbankers zsare zsinterested zsin zsall zsthe
zsinformation zscompanies zsprovide, zsshareholders zscare zsabout zsmore zsabout zsa zscompany‘s
zsprofitability zsand zsbankers zscare zsmore zsabout zssolvency zsand zscreditworthiness.
Topic: zsPublicly zsAvailable zsFinancial
zsReports zsLO: zs2
2. Publicly zstraded zscompanies zsare zsrequired zsto zsprovide zsquarterly zsfinancial zsreports zsdirectly zsto zsthe
zspublic.
Answer: zsFalse
Rationale: zsCompanies zsprovide zselectronic zsversions zsof zsquarterly zsfinancial zsstatements zsto
zsthe zsSEC, zswhich z s posts zsthem zsto zsthe zsInternet zsfor zsthe zspublic zsto zsaccess zsthem.
Topic: zsUsers zsof zsFinancial zsStatement
zsInformation zsLO: zs2
3. Publicly zstraded zscompanies zsprovide zsfinancial zsinformation zsprimarily zsto zssatisfy zsthe zsSEC zsand
zsthe zstax zsauthorities zs(that zsis, zsthe zsInternal zsRevenue zsService).
Answer: zsFalse
Rationale: zsDemand zsfor zsinformation zsextends zsto zsmany zsusers; zsthe zsregulators zssuch zsas
zsthe zsSEC zsand zsthe zsIRS zsare zsonly zsone zsclass zsof zsusers.
Topic: zsSEC
zsFilings zsLO: zs2
4. Publicly zstraded zscompanies zsmust zsprovide zsto zsthe zsSecurities zsExchange zsCommission zsannual
zsaudited zsfinancial zsstatements zs(10-K zsreports) zsand zsquarterly zsaudited zsfinancial zsstatements
zs(10-Q zsreports).
Answer: zsFalse
Rationale: zsQuarterly zsreports zsdo zsnot zsneed zsto zsbe zsaudited.
Topic: zsBalance
zsSheet zsLO: zs3
5. If zsa zscompany zsreports zsretained zsearnings zsof zs$175.3 zsmillion zson zsits zsbalance zssheet, zsit
zsmust zsalso zsreport zs$175.3 zsmillion zsin zscash.
Answer: zsFalse
, Rationale: zsThe z s accounting z s equation z s requires z s total zsassets z s to z s equal zstotal z s liabilities
z s plus z s stockholders‘ zsequity. zsThat zsdoes zsnot zsimply, zshowever, zsthat zsliability zsand zsequity
zsaccounts zsrelate zsdirectly zsto zsspecific zsassets.
