Test Bank for Financi
b b b
alAccountingfor MBA
b b b
s 8th Editionby Easto
b b b b
n
, Module 1 b
Financial Accounting for MBAs
b b b
Learning Objectives – Coverage by question
b b b b b
True/False MultiplebChoice
LO1b–
bExplainbandbassessbthebfourbmainbbusinessb
activities.
LO2b–
1-b4 1,b2
bIdentifybandbdiscussbthebusersbandbsuppliersbofb
financi
albstatementbinformation.
LO3b–
5-10 3-19
bDescribebandbexaminebthebfourbfinancialbstatements,b
andbdefinebthebaccountingbequation.
LO4b–
11-13 20-25
bExplainbandbapplybthebbasicsbofbprofitabilityb
analysis.
LO5b–
14 26,b27
bAssessbbusinessboperationsbwithinbthebcontextb
ofbabco
mpetitivebenvironment.
LO6b–
bAccessbreportsbfiledbwithbthebSECb(Appendixb
1A).
LO7b–
bDescribebthebaccounting bprinciplesbandbregulationsbth 15 28-30
atbframebfinancialbstatementsb(Appendixb1B).
ThesebquestionsbarebavailablebtobassignbinbmyBusinessCourse.
,Module 1: Financial Accounting for MBAs
b b b b b
True/False
Topic:bUsersbofbFinancialbStatementbInformationbL
O:b2
1. Shareholdersb demandb financialb informationb primarilyb tob assessb profitabilityb andb riskb whereasb bankersb
demandbinformationbprimarilybtobassessbcashbflowsbtobrepaybloanbinterestbandbprincipal.
Answer:bTrue
Rationale:bWhilebbothbshareholdersbandbbankersbarebinterestedbinballbthebinformationbcompaniesbprovi
de,bshareholdersbcarebaboutbmorebaboutbabcompany’sbprofitabilitybandbbankersbcarebmorebaboutbsolve
ncybandbcreditworthiness.
Topic:bPubliclybAvailablebFinancialbReport
sbLO:b2
2. Publiclybtradedbcompaniesbarebrequiredbtobprovidebquarterlybfinancialbreportsbdirectlybtobthebpublic.
Answer:bFalse
Rationale:b Companiesb provideb electronicb versionsb ofb quarterlyb financialb statementsb tob theb SEC,b whichb
postsbthembtobthebInternetbforbthebpublicbtobaccessbthem.
Topic:bUsersbofbFinancialbStatementbInformationbL
O:b2
3. PubliclybtradedbcompaniesbprovidebfinancialbinformationbprimarilybtobsatisfybthebSECbandbthebtaxbauthorities
b(thatbis,bthebInternalbRevenuebService).
Answer:bFalse
Rationale:bDemandbforbinformationbextendsbtobmanybusers;bthebregulatorsbsuchbasbthebSECb andbthebIRSb
arebonlybonebclassbofbusers.
Topic:bSECbFilingsb
LO:b2
4. PubliclybtradedbcompaniesbmustbprovidebtobthebSecuritiesbExchangebCommissionbannualbauditedbfinancialb
statementsb(10-Kbreports)bandbquarterlybauditedbfinancialbstatementsb(10-Qbreports).
Answer:bFalse
Rationale:bQuarterlybreportsbdobnotbneedbtobbebaudited.
Topic:bBalancebSheetb
LO:b3
5. Ifbabcompanybreportsbretainedbearningsbofb$175.3bmillionbonbitsbbalancebsheet,bitbmustbalsobreportb$175.3
bmillionbinbcash.
Answer:bFalse
, Rationale:b Theb accountingb equationb requiresb totalb assetsb tob equalb totalb liabilitiesb plusb stockholders’be
quity.bThatbdoesbnotbimply,bhowever,bthatbliabilitybandbequitybaccountsbrelatebdirectlybtobspecificbassets.
b b b
alAccountingfor MBA
b b b
s 8th Editionby Easto
b b b b
n
, Module 1 b
Financial Accounting for MBAs
b b b
Learning Objectives – Coverage by question
b b b b b
True/False MultiplebChoice
LO1b–
bExplainbandbassessbthebfourbmainbbusinessb
activities.
LO2b–
1-b4 1,b2
bIdentifybandbdiscussbthebusersbandbsuppliersbofb
financi
albstatementbinformation.
LO3b–
5-10 3-19
bDescribebandbexaminebthebfourbfinancialbstatements,b
andbdefinebthebaccountingbequation.
LO4b–
11-13 20-25
bExplainbandbapplybthebbasicsbofbprofitabilityb
analysis.
LO5b–
14 26,b27
bAssessbbusinessboperationsbwithinbthebcontextb
ofbabco
mpetitivebenvironment.
LO6b–
bAccessbreportsbfiledbwithbthebSECb(Appendixb
1A).
LO7b–
bDescribebthebaccounting bprinciplesbandbregulationsbth 15 28-30
atbframebfinancialbstatementsb(Appendixb1B).
ThesebquestionsbarebavailablebtobassignbinbmyBusinessCourse.
,Module 1: Financial Accounting for MBAs
b b b b b
True/False
Topic:bUsersbofbFinancialbStatementbInformationbL
O:b2
1. Shareholdersb demandb financialb informationb primarilyb tob assessb profitabilityb andb riskb whereasb bankersb
demandbinformationbprimarilybtobassessbcashbflowsbtobrepaybloanbinterestbandbprincipal.
Answer:bTrue
Rationale:bWhilebbothbshareholdersbandbbankersbarebinterestedbinballbthebinformationbcompaniesbprovi
de,bshareholdersbcarebaboutbmorebaboutbabcompany’sbprofitabilitybandbbankersbcarebmorebaboutbsolve
ncybandbcreditworthiness.
Topic:bPubliclybAvailablebFinancialbReport
sbLO:b2
2. Publiclybtradedbcompaniesbarebrequiredbtobprovidebquarterlybfinancialbreportsbdirectlybtobthebpublic.
Answer:bFalse
Rationale:b Companiesb provideb electronicb versionsb ofb quarterlyb financialb statementsb tob theb SEC,b whichb
postsbthembtobthebInternetbforbthebpublicbtobaccessbthem.
Topic:bUsersbofbFinancialbStatementbInformationbL
O:b2
3. PubliclybtradedbcompaniesbprovidebfinancialbinformationbprimarilybtobsatisfybthebSECbandbthebtaxbauthorities
b(thatbis,bthebInternalbRevenuebService).
Answer:bFalse
Rationale:bDemandbforbinformationbextendsbtobmanybusers;bthebregulatorsbsuchbasbthebSECb andbthebIRSb
arebonlybonebclassbofbusers.
Topic:bSECbFilingsb
LO:b2
4. PubliclybtradedbcompaniesbmustbprovidebtobthebSecuritiesbExchangebCommissionbannualbauditedbfinancialb
statementsb(10-Kbreports)bandbquarterlybauditedbfinancialbstatementsb(10-Qbreports).
Answer:bFalse
Rationale:bQuarterlybreportsbdobnotbneedbtobbebaudited.
Topic:bBalancebSheetb
LO:b3
5. Ifbabcompanybreportsbretainedbearningsbofb$175.3bmillionbonbitsbbalancebsheet,bitbmustbalsobreportb$175.3
bmillionbinbcash.
Answer:bFalse
, Rationale:b Theb accountingb equationb requiresb totalb assetsb tob equalb totalb liabilitiesb plusb stockholders’be
quity.bThatbdoesbnotbimply,bhowever,bthatbliabilitybandbequitybaccountsbrelatebdirectlybtobspecificbassets.
