Test Bank For Financial Accounting For MBAs ( 8th Edition) By Easton And John Wild||LATEST UPDATE 2024

Test Bank for
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vv FinancialAccounting
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for MBAs 8th
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Editionby Easton
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, Module 1 vv




Financial Accounting for MBAs vv vv vv




Learning Objectives – Coverage by question vv vv vv vv vv



True/False Multiple
Choice
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LO1 – Explain and assess the four main
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businessactivities.
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LO2 – Identify and discuss the users and suppliers
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1- 4 vv 1, 2
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offinancial statement information.
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LO3 – Describe and examine the four financial
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5-10 3-19
statements, and define the accounting equation.
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LO4 – Explain and apply the basics of
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11-13 20-25
profitabilityanalysis.
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LO5 – Assess business operations within the
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14 26, 27vv
contextof a competitive environment.
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LO6 – Access reports filed with the SEC
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(Appendix1A).
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LO7 – Describe the accounting principles and
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regulations that frame financial statements
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(Appendix1B).
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These questions are available to assign in myBusinessCourse.
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,Module 1: Financial Accounting for MBAs
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True/False


Topic: Users of Financial Statement
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InformationLO: 2
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1. Shareholders demand financial information primarily to assess profitability and risk whereas
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bankers demand information primarily to assess cash flows to repay loan interest and principal.
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Answer: True vv


Rationale: While both shareholders and bankers are interested in all the information companies
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provide, shareholders care about more about a company‘s profitability and bankers care more
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about solvency and creditworthiness.
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Topic: Publicly Available Financial
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ReportsLO: 2
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2. Publicly traded companies are required to provide quarterly financial reports directly to the public.
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Answer: False vv


Rationale: Companies provide electronic versions of quarterly financial statements to the
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SEC, which posts them to the Internet for the public to access them.
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Topic: Users of Financial Statement
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InformationLO: 2
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3. Publicly traded companies provide financial information primarily to satisfy the SEC and the tax
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authorities (that is, the Internal Revenue Service).
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Answer: False vv


Rationale: Demand for information extends to many users; the regulators such as the SEC and
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the IRSare only one class of users.
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Topic: SEC vv


FilingsLO: 2
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4. Publicly traded companies must provide to the Securities Exchange Commission annual audited
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financialstatements (10-K reports) and quarterly audited financial statements (10-Q reports).
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Answer: False vv


Rationale: Quarterly reports do not need to be audited.
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Topic: Balance
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SheetLO: 3
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5. If a company reports retained earnings of $175.3 million on its balance sheet, it must also
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report $175.3 million in cash.
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Answer: False vv

, Rationale: The accounting equation requires total assets to equal total liabilities plus
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stockholders‘ equity. That does not imply, however, that liability and equity accounts relate directly
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to specific assets.
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