Test Bank for
Financial Accounting
for MBAs 8th Edition
by Easton
, Module1 |
FinancialAccounting for MBAs | | |
Learning Objectives – 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
14 26, |27
|of |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.
,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.
Answer: |True
Rationale: |While |both |shareholders |and |bankers |are |interested |in |all |the |information |companies
|provide, |shareholders |care |about |more |about |a |company’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.
Answer: |False
Rationale: |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).
Answer: |False
Rationale: |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).
Answer: |False
Rationale: |Quarterly |reports |do |not |need |to |be |audited.
Topic: |Balance |Sheet
|LO: |3
5. If |a |company |reports |retained |earnings |of |$175.3 |million |on |its |balance |sheet, |it |must |also |report |$175.3
|million |in |cash.
Answer: |False
, Rationale: |The | accounting | equation | requires | total |assets | to | equal |total | liabilities | plus | stockholders’
|equity. |That |does |not |imply, |however, |that |liability |and |equity |accounts |relate |directly |to |specific |assets.
Financial Accounting
for MBAs 8th Edition
by Easton
, Module1 |
FinancialAccounting for MBAs | | |
Learning Objectives – 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
14 26, |27
|of |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.
,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.
Answer: |True
Rationale: |While |both |shareholders |and |bankers |are |interested |in |all |the |information |companies
|provide, |shareholders |care |about |more |about |a |company’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.
Answer: |False
Rationale: |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).
Answer: |False
Rationale: |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).
Answer: |False
Rationale: |Quarterly |reports |do |not |need |to |be |audited.
Topic: |Balance |Sheet
|LO: |3
5. If |a |company |reports |retained |earnings |of |$175.3 |million |on |its |balance |sheet, |it |must |also |report |$175.3
|million |in |cash.
Answer: |False
, Rationale: |The | accounting | equation | requires | total |assets | to | equal |total | liabilities | plus | stockholders’
|equity. |That |does |not |imply, |however, |that |liability |and |equity |accounts |relate |directly |to |specific |assets.
