Test Bank for
Financial Accounting
for MBAs 8th Edition
by Easton
, Module 1 s2
Financial Accounting for MBAs
s2 s2 s2
Learnings2Objectivess2–s2Coverages2bys2question
True/False Multiples2Choice
LO1s2–
s2Explains2ands2assesss2thes2fours2mains2businesss2
activities.
LO2s2–
1-s24 1,s22
s2Identifys2ands2discusss2thes2userss2ands2supplierss
2ofs2financials2statements2information.
LO3s2–
5-10 3-19
s2Describes2ands2examines2thes2fours2financials2stat
ements,s2ands2defines2thes2accountings2equation.
LO4s2–
11-13 20-25
s2Explains2ands2applys2thes2basicss2ofs2profitabilitys2
analysis.
LO5s2–
14 26,s227
s2Assesss2businesss2operationss2withins2thes2context
s2ofs2as2competitives2environment.
LO6s2–
s2Accesss2reportss2fileds2withs2thes2SECs2(Appendixs
21A).
LO7s2–
s2Describes2thes2accountings2principless2ands2regula 15 28-30
tionss2thats2frames2financials2statementss2(Appendixs
21B).
Theses2questionss2ares2availables2tos2assigns2ins2myBusinessCourse.
,Modules21:s2Financials2Accountings2fors2MBAs
True/False
Topic:s2Userss2ofs2Financials2Statements2Informat
ions2LO:s22
1. Shareholderss 2 demands2financials2informations2primarilys2tos2assesss2profitabilitys2ands2risks2where
ass2bankerss 2 demands2informations2primarilys2tos2assesss2cashs2flowss2tos2repays2loans2interests2a
nds2principal.
Answer:s2True
Rationale:s2Whiles2boths2shareholderss2ands2bankerss2ares2interesteds2ins2alls2thes2informations2c
ompaniess2provide,s2shareholderss2cares2abouts2mores2abouts2as2company’ss2profitabilitys2ands2b
ankerss2cares2mores2abouts2solvencys2ands2creditworthiness.
Topic:s2Publiclys2Availables2Financials2Re
portss2LO:s22
2. Publiclys2tradeds2companiess2ares2requireds2tos2provides2quarterlys2financials2reportss2directlys2tos2thes2pub
lic.
Answer:s2False
Rationale:s2Companiess2provides2electronics2versionss2ofs2quarterlys2financials2statementss2tos2thes2
SEC,s2whichs 2 postss2thems2tos2thes2Internets2fors2thes2publics2tos2accesss2them.
Topic:s2Userss2ofs2Financials2Statements2Informat
ions2LO:s22
3. Publiclys2tradeds2companiess2provides2financials2informations2primarilys2tos2satisfys2thes2SECs2ands2the
s2taxs2authoritiess2(thats2is,s2thes2Internals2Revenues2Service).
Answer:s2False
Rationale:s2Demands2fors2informations2extendss2tos2manys2users;s2thes2regulatorss2suchs2ass2thes2
SECs2ands2thes2IRSs2ares2onlys2ones2classs2ofs2users.
Topic:s2SECs2Filin
gss2LO:s22
4. Publiclys2tradeds2companiess2musts2provides2tos2thes2Securitiess2Exchanges2Commissions2annuals2au
diteds2financials2statementss2(10-Ks2reports)s2ands2quarterlys2auditeds2financials2statementss2(10-
Qs2reports).
Answer:s2False
Rationale:s2Quarterlys2reportss2dos2nots2needs2tos2bes2audited.
Topic:s2Balances2Sh
eets2LO:s23
5. Ifs2as2companys2reportss2retaineds2earningss2ofs2$175.3s2millions2ons2itss2balances2sheet,s2its2musts2
alsos2reports2$175.3s2millions2ins2cash.
Answer:s2False
, Rationale:s2Thes 2 accountings 2 equations 2 requiress 2 totals2assetss 2 tos 2 equals2totals 2 liabilitiess 2 plus
s 2 stockholders’s2equity.s2Thats2doess2nots2imply,s2however,s2thats2liabilitys2ands2equitys2accountss2rela
tes2directlys2tos2specifics2assets.
Financial Accounting
for MBAs 8th Edition
by Easton
, Module 1 s2
Financial Accounting for MBAs
s2 s2 s2
Learnings2Objectivess2–s2Coverages2bys2question
True/False Multiples2Choice
LO1s2–
s2Explains2ands2assesss2thes2fours2mains2businesss2
activities.
LO2s2–
1-s24 1,s22
s2Identifys2ands2discusss2thes2userss2ands2supplierss
2ofs2financials2statements2information.
LO3s2–
5-10 3-19
s2Describes2ands2examines2thes2fours2financials2stat
ements,s2ands2defines2thes2accountings2equation.
LO4s2–
11-13 20-25
s2Explains2ands2applys2thes2basicss2ofs2profitabilitys2
analysis.
LO5s2–
14 26,s227
s2Assesss2businesss2operationss2withins2thes2context
s2ofs2as2competitives2environment.
LO6s2–
s2Accesss2reportss2fileds2withs2thes2SECs2(Appendixs
21A).
LO7s2–
s2Describes2thes2accountings2principless2ands2regula 15 28-30
tionss2thats2frames2financials2statementss2(Appendixs
21B).
Theses2questionss2ares2availables2tos2assigns2ins2myBusinessCourse.
,Modules21:s2Financials2Accountings2fors2MBAs
True/False
Topic:s2Userss2ofs2Financials2Statements2Informat
ions2LO:s22
1. Shareholderss 2 demands2financials2informations2primarilys2tos2assesss2profitabilitys2ands2risks2where
ass2bankerss 2 demands2informations2primarilys2tos2assesss2cashs2flowss2tos2repays2loans2interests2a
nds2principal.
Answer:s2True
Rationale:s2Whiles2boths2shareholderss2ands2bankerss2ares2interesteds2ins2alls2thes2informations2c
ompaniess2provide,s2shareholderss2cares2abouts2mores2abouts2as2company’ss2profitabilitys2ands2b
ankerss2cares2mores2abouts2solvencys2ands2creditworthiness.
Topic:s2Publiclys2Availables2Financials2Re
portss2LO:s22
2. Publiclys2tradeds2companiess2ares2requireds2tos2provides2quarterlys2financials2reportss2directlys2tos2thes2pub
lic.
Answer:s2False
Rationale:s2Companiess2provides2electronics2versionss2ofs2quarterlys2financials2statementss2tos2thes2
SEC,s2whichs 2 postss2thems2tos2thes2Internets2fors2thes2publics2tos2accesss2them.
Topic:s2Userss2ofs2Financials2Statements2Informat
ions2LO:s22
3. Publiclys2tradeds2companiess2provides2financials2informations2primarilys2tos2satisfys2thes2SECs2ands2the
s2taxs2authoritiess2(thats2is,s2thes2Internals2Revenues2Service).
Answer:s2False
Rationale:s2Demands2fors2informations2extendss2tos2manys2users;s2thes2regulatorss2suchs2ass2thes2
SECs2ands2thes2IRSs2ares2onlys2ones2classs2ofs2users.
Topic:s2SECs2Filin
gss2LO:s22
4. Publiclys2tradeds2companiess2musts2provides2tos2thes2Securitiess2Exchanges2Commissions2annuals2au
diteds2financials2statementss2(10-Ks2reports)s2ands2quarterlys2auditeds2financials2statementss2(10-
Qs2reports).
Answer:s2False
Rationale:s2Quarterlys2reportss2dos2nots2needs2tos2bes2audited.
Topic:s2Balances2Sh
eets2LO:s23
5. Ifs2as2companys2reportss2retaineds2earningss2ofs2$175.3s2millions2ons2itss2balances2sheet,s2its2musts2
alsos2reports2$175.3s2millions2ins2cash.
Answer:s2False
, Rationale:s2Thes 2 accountings 2 equations 2 requiress 2 totals2assetss 2 tos 2 equals2totals 2 liabilitiess 2 plus
s 2 stockholders’s2equity.s2Thats2doess2nots2imply,s2however,s2thats2liabilitys2ands2equitys2accountss2rela
tes2directlys2tos2specifics2assets.
