, TestBank for Financial Accounting /f / f /f /f
forMBAs8th Edition byEaston/f /f /f /f /f /f
Module 1 vv
FinancialAccountingforMBAs /f /f
Learning Objectives – Coverage by question vv vv vv vv vv
True/False Multiple
Choic
/f
e
LO1 – Explain and assess the four main
/ f / f / f / f / f / f / f
business activities.
/f vv
LO2 – Identify and discuss the users and suppliers
/f /f /f /f /f /f /f /f
1- 4 / f 1, 2
/ f
offinancial statement information.
/f / f / f
LO3 – Describe and examine the four financial
/f /f /f /f /f /f /f
5-10 3-19
statements, and define the accounting equation.
/f /f /f /f /f /f
LO4 – Explain and apply the basics of
/f / f / f / f / f / f
11-13 20-25
/ f
profitabilityanalysis.
/f
LO5 – Assess business operations within the
/f /f /f /f /f /f
14 26, 27 / f
contextof a competitive environment.
/f / f / f / f
LO6 – Access reports filed with the SEC
/ f / f /f / f / f / f / f
(Appendix 1A).
/f vv
LO7 – Describe the accounting principles and
/f /f /f /f /f /f
regulations that frame financial statements
/f /f /f /f /f 15 28-30
(Appendix 1B).
/f vv
These questions are available to assign in myBusinessCourse.
/f /f / f /f /f /f / f
,Module 1: Financial Accounting for MBAs
vv vv vv vv vv
True/False
Topic: Users of Financial Statement
/f /f /f /f
Information LO: 2
/f vv / f
1. Shareholders demand financial information primarily to assess profitability
/ f and / f / f / f / f / f / f / f
risk
/ f whereas bankers demand information primarily to assess cash flows to repay
/ f /f / f / f / f / f / f / f / f / f / f
loan interest and principal.
/ f / f / f / f
Answer: True /f
Rationale: While both shareholders and bankers are interested in all the information companies
/f /f /f /f /f /f /f /f /f /f /f /f
provide, shareholders care about more about a company‘s profitability and bankers
/f / f / f / f / f / f / f / f / f / f / f
care more about solvency and creditworthiness.
/ f / f /f / f / f / f
Topic: Publicly Available Financial
/ f / f /f
ReportsLO: 2
/f / f
2. Publicly traded companies are required to provide quarterly financial reports directly to the public.
/f /f /f /f /f /f /f /f /f / f /f /f /f
Answer: False /f
Rationale: Companies provide electronic versions
/ fof quarterly financial / f / f / f / f / f / f
statements
/ f to the SEC, which posts them to the Internet for the public to
/ f / f /f / f / f / f / f / f / f / f / f / f / f
access them.
/ f / f
Topic: Users of Financial Statement
/f /f /f /f
Information LO: 2
/f vv / f
3. Publicly traded companies provide financial information primarily to satisfy the SEC and
/f /f /f /f /f /f /f /f /f /f /f
the tax authorities (that is, the Internal Revenue Service).
/f /f /f / f / f / f / f / f / f
Answer: False /f
Rationale: Demand for information extends to many users; the regulators such as
/ f / f / f / f / f / f / f / f / f / f / f
the SEC
/ f and the IRS are only one class of users.
/ f / f /f / f vv / f / f / f / f / f
Topic: SEC /f
Filings LO:
/f vv
/f2
4. Publicly traded companies must provide to the Securities Exchange Commission
/ f / f / f / f / f / f / f / f / f
annual audited financialstatements (10-K reports) and quarterly audited financial
/ f / f /f / f / f / f / f / f / f
statements (10-Q reports).
/ f / f / f
Answer: False /f
Rationale: Quarterly reports do not need to be audited.
/f /f / f / f / f /f /f / f
Topic: Balance
/f
Sheet LO: 3
/f vv / f
5. If a company reports retained earnings of $175.3
/ f / f / f / f / f / f / f / f million on its balance sheet,
/ f / f / f / f
it must also report $175.3 million in cash.
/ f / f / f /f / f / f / f / f
Answer: False /f
, Rationale: /Thef accounting
/ equation
f / requires
f total assets/ to
f equal /total
f / f / f / f / f
/ liabilities
f plus stockholders‘ equity. That does not imply, however, that liability and
/ f /f / f /f /f /f /f /f /f /f /f
equity accounts relate directly to specific assets.
/f /f /f /f /f /f /f
forMBAs8th Edition byEaston/f /f /f /f /f /f
Module 1 vv
FinancialAccountingforMBAs /f /f
Learning Objectives – Coverage by question vv vv vv vv vv
True/False Multiple
Choic
/f
e
LO1 – Explain and assess the four main
/ f / f / f / f / f / f / f
business activities.
/f vv
LO2 – Identify and discuss the users and suppliers
/f /f /f /f /f /f /f /f
1- 4 / f 1, 2
/ f
offinancial statement information.
/f / f / f
LO3 – Describe and examine the four financial
/f /f /f /f /f /f /f
5-10 3-19
statements, and define the accounting equation.
/f /f /f /f /f /f
LO4 – Explain and apply the basics of
/f / f / f / f / f / f
11-13 20-25
/ f
profitabilityanalysis.
/f
LO5 – Assess business operations within the
/f /f /f /f /f /f
14 26, 27 / f
contextof a competitive environment.
/f / f / f / f
LO6 – Access reports filed with the SEC
/ f / f /f / f / f / f / f
(Appendix 1A).
/f vv
LO7 – Describe the accounting principles and
/f /f /f /f /f /f
regulations that frame financial statements
/f /f /f /f /f 15 28-30
(Appendix 1B).
/f vv
These questions are available to assign in myBusinessCourse.
/f /f / f /f /f /f / f
,Module 1: Financial Accounting for MBAs
vv vv vv vv vv
True/False
Topic: Users of Financial Statement
/f /f /f /f
Information LO: 2
/f vv / f
1. Shareholders demand financial information primarily to assess profitability
/ f and / f / f / f / f / f / f / f
risk
/ f whereas bankers demand information primarily to assess cash flows to repay
/ f /f / f / f / f / f / f / f / f / f / f
loan interest and principal.
/ f / f / f / f
Answer: True /f
Rationale: While both shareholders and bankers are interested in all the information companies
/f /f /f /f /f /f /f /f /f /f /f /f
provide, shareholders care about more about a company‘s profitability and bankers
/f / f / f / f / f / f / f / f / f / f / f
care more about solvency and creditworthiness.
/ f / f /f / f / f / f
Topic: Publicly Available Financial
/ f / f /f
ReportsLO: 2
/f / f
2. Publicly traded companies are required to provide quarterly financial reports directly to the public.
/f /f /f /f /f /f /f /f /f / f /f /f /f
Answer: False /f
Rationale: Companies provide electronic versions
/ fof quarterly financial / f / f / f / f / f / f
statements
/ f to the SEC, which posts them to the Internet for the public to
/ f / f /f / f / f / f / f / f / f / f / f / f / f
access them.
/ f / f
Topic: Users of Financial Statement
/f /f /f /f
Information LO: 2
/f vv / f
3. Publicly traded companies provide financial information primarily to satisfy the SEC and
/f /f /f /f /f /f /f /f /f /f /f
the tax authorities (that is, the Internal Revenue Service).
/f /f /f / f / f / f / f / f / f
Answer: False /f
Rationale: Demand for information extends to many users; the regulators such as
/ f / f / f / f / f / f / f / f / f / f / f
the SEC
/ f and the IRS are only one class of users.
/ f / f /f / f vv / f / f / f / f / f
Topic: SEC /f
Filings LO:
/f vv
/f2
4. Publicly traded companies must provide to the Securities Exchange Commission
/ f / f / f / f / f / f / f / f / f
annual audited financialstatements (10-K reports) and quarterly audited financial
/ f / f /f / f / f / f / f / f / f
statements (10-Q reports).
/ f / f / f
Answer: False /f
Rationale: Quarterly reports do not need to be audited.
/f /f / f / f / f /f /f / f
Topic: Balance
/f
Sheet LO: 3
/f vv / f
5. If a company reports retained earnings of $175.3
/ f / f / f / f / f / f / f / f million on its balance sheet,
/ f / f / f / f
it must also report $175.3 million in cash.
/ f / f / f /f / f / f / f / f
Answer: False /f
, Rationale: /Thef accounting
/ equation
f / requires
f total assets/ to
f equal /total
f / f / f / f / f
/ liabilities
f plus stockholders‘ equity. That does not imply, however, that liability and
/ f /f / f /f /f /f /f /f /f /f /f
equity accounts relate directly to specific assets.
/f /f /f /f /f /f /f
