TEST BANK FOR FINANCIAL ACCOUNTING FOR
n n n n n
MBAS 8TH EDITION BY EASTON
n n n n n
, Module 1 n
Financial Accounting for MBAs n n n
Learning Objs – Coverage by question
n n n n n
True/False Multiple nChoice
LO1 n– nExplain nand nassess nthe nfour nmain nbusiness
nactivities.
LO2 n– nIdentify nand ndiscuss nthe nusers nand
1- n4 1, n2
nsuppliers nof nfinancial n statement n information.
LO3 n– nDescribe nand nexamine nthe nfour nfinancial
5-10 3-19
nstatements, nand ndefine nthe naccounting nequation.
LO4 n– nExplain nand napply nthe nbasics nof
11-13 20-25
nprofitability nanalysis.
LO5 n– nAssess nbusiness noperations nwithin nthe
14 26, n27
ncontext nof n a n competitive n environment.
LO6 n– nAccess nreports nfiled nwith nthe nSEC
n(Appendix n1A).
LO7 n– nDescribe nthe naccounting nprinciples nand
nregulations nthat nframe nfinancial nstatements 15 28-30
n(Appendix n1B).
These nquestions nare navailable nto nassign nin nmyBusinessCourse.
© nCambridge nBusiness nPublishers, n2021
1-1 Financial nAccounting nfor nMBAs, n8th nEdition
,Module 1: Financial Accounting for MBAs
n n n n n
True/False
TOPIC:Users nof nFinancial nStatement nInformation nLO:
2
1. Shareholders ndemand nfinancial ninformation nprimarily nto nassess nprofitability nand nrisk nwhereas
nbankers ndemand ninformation nprimarily nto nassess ncash nflows nto nrepay nloan ninterest nand
nprincipal.
ACCURATE nANSWER:-True
Reasoning:->>->>>While nboth nshareholders nand nbankers nare ninterested nin nall nthe ninformation
ncompanies nprovide, nshareholders ncare nabout nmore nabout na nfirm’s nprofitability nand nbankers
ncare nmore nabout nsolvency nand ncreditworthiness.
TOPIC:Publicly nAvailable nFinancial
nReports nLO: n2
2. Publicly ntraded ncompanies nare nrequired nto nprovide nquarterly nfinancial nreports ndirectly nto nthe npublic.
ACCURATE nANSWER:-False
Reasoning:->>->>>Companies nprovide nelectronic nversions nof nquarterly nfinancial nstatements nto
nthe nSEC, nwhich nposts nthem nto nthe nInternet nfor nthe npublic nto naccess nthem.
TOPIC:Users nof nFinancial nStatement nInformation nLO:
2
3. Publicly n traded n companies n provide n financial n information n primarily n to n satisfy n the
n SEC n and n the n tax nauthorities n(that nis, nthe nInternal nRevenue nService).
ACCURATE nANSWER:-False
Reasoning n:->>->>>Demand nfor ninformation nextends nto nmany nusers; nthe nregulators nsuch nas nthe
nSEC nand nthe nIRS nare nonly none nclass nof nusers.
TOPIC:SEC nFilings nLO:
2
4. Publicly n traded n companies n must n provide n to n the n Securities n Exchange n Commission
n annual n audited nfinancial nstatements n(10-K nreports) nand nquarterly naudited nfinancial
nstatements n(10-Q nreports).
ACCURATE nANSWER:-False
Reasoning:->>->>>Quarterly nreports ndo nnot nneed nto nbe naudited.
TOPIC:Balance
nSheet nLO: n3
5. If n a n firm n reports n retained n earnings n of n $175.3 n million n on n its n balance n sheet, n it n must n also
n report
$175.3 nmillion nin ncash.
ACCURATE nANSWER:-False
Reasoning:->>->>>The naccounting nequation nrequires ntotal nassets nto nequal ntotal nliabilities nplus
nstockholders’ nequity. nThat ndoes nnot nimply, nhowever, nthat nliability nand nequity naccounts nrelate
ndirectly nto nspecific nassets.
, © nCambridge nBusiness nPublishers, n2021
Test nBank n(T/F n& nMC), nModule n1 1-2
n n n n n
MBAS 8TH EDITION BY EASTON
n n n n n
, Module 1 n
Financial Accounting for MBAs n n n
Learning Objs – Coverage by question
n n n n n
True/False Multiple nChoice
LO1 n– nExplain nand nassess nthe nfour nmain nbusiness
nactivities.
LO2 n– nIdentify nand ndiscuss nthe nusers nand
1- n4 1, n2
nsuppliers nof nfinancial n statement n information.
LO3 n– nDescribe nand nexamine nthe nfour nfinancial
5-10 3-19
nstatements, nand ndefine nthe naccounting nequation.
LO4 n– nExplain nand napply nthe nbasics nof
11-13 20-25
nprofitability nanalysis.
LO5 n– nAssess nbusiness noperations nwithin nthe
14 26, n27
ncontext nof n a n competitive n environment.
LO6 n– nAccess nreports nfiled nwith nthe nSEC
n(Appendix n1A).
LO7 n– nDescribe nthe naccounting nprinciples nand
nregulations nthat nframe nfinancial nstatements 15 28-30
n(Appendix n1B).
These nquestions nare navailable nto nassign nin nmyBusinessCourse.
© nCambridge nBusiness nPublishers, n2021
1-1 Financial nAccounting nfor nMBAs, n8th nEdition
,Module 1: Financial Accounting for MBAs
n n n n n
True/False
TOPIC:Users nof nFinancial nStatement nInformation nLO:
2
1. Shareholders ndemand nfinancial ninformation nprimarily nto nassess nprofitability nand nrisk nwhereas
nbankers ndemand ninformation nprimarily nto nassess ncash nflows nto nrepay nloan ninterest nand
nprincipal.
ACCURATE nANSWER:-True
Reasoning:->>->>>While nboth nshareholders nand nbankers nare ninterested nin nall nthe ninformation
ncompanies nprovide, nshareholders ncare nabout nmore nabout na nfirm’s nprofitability nand nbankers
ncare nmore nabout nsolvency nand ncreditworthiness.
TOPIC:Publicly nAvailable nFinancial
nReports nLO: n2
2. Publicly ntraded ncompanies nare nrequired nto nprovide nquarterly nfinancial nreports ndirectly nto nthe npublic.
ACCURATE nANSWER:-False
Reasoning:->>->>>Companies nprovide nelectronic nversions nof nquarterly nfinancial nstatements nto
nthe nSEC, nwhich nposts nthem nto nthe nInternet nfor nthe npublic nto naccess nthem.
TOPIC:Users nof nFinancial nStatement nInformation nLO:
2
3. Publicly n traded n companies n provide n financial n information n primarily n to n satisfy n the
n SEC n and n the n tax nauthorities n(that nis, nthe nInternal nRevenue nService).
ACCURATE nANSWER:-False
Reasoning n:->>->>>Demand nfor ninformation nextends nto nmany nusers; nthe nregulators nsuch nas nthe
nSEC nand nthe nIRS nare nonly none nclass nof nusers.
TOPIC:SEC nFilings nLO:
2
4. Publicly n traded n companies n must n provide n to n the n Securities n Exchange n Commission
n annual n audited nfinancial nstatements n(10-K nreports) nand nquarterly naudited nfinancial
nstatements n(10-Q nreports).
ACCURATE nANSWER:-False
Reasoning:->>->>>Quarterly nreports ndo nnot nneed nto nbe naudited.
TOPIC:Balance
nSheet nLO: n3
5. If n a n firm n reports n retained n earnings n of n $175.3 n million n on n its n balance n sheet, n it n must n also
n report
$175.3 nmillion nin ncash.
ACCURATE nANSWER:-False
Reasoning:->>->>>The naccounting nequation nrequires ntotal nassets nto nequal ntotal nliabilities nplus
nstockholders’ nequity. nThat ndoes nnot nimply, nhowever, nthat nliability nand nequity naccounts nrelate
ndirectly nto nspecific nassets.
, © nCambridge nBusiness nPublishers, n2021
Test nBank n(T/F n& nMC), nModule n1 1-2
