TEST BANK for Financial Accounting for MBAs 8th Edition by Peter Easton & John Wild contains verified questions and answers graded A+

, Module 1 M




Financial Accounting for BAs N! N! N!N!




Learning Objectives – Coverage by question N! N! N! N! N!



True/False N! ultiple Choice
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LO1 – N!


Explain and assess the four ain business activities.
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LO2 – N!
1- 4
N! 1, 2
N!
Identify and discuss the users and suppliers of finan
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cial state ent infor ation.
N! N! N! N!




LO3 – N!
5-10 3-19
Describe and exa ine the four financial state ents,
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and define the accounting equation.
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LO4 – N!
11-13 20-25
Explain and apply the basics of profitability analysis.
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LO5 – N!
14 26, 27
N!
Assess business operations within the context of a
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co petitive environ ent.
N! N! N!




LO6 – N!


Access reports filed with the SEC (Appendix 1A).
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LO7 – N!


Describe the accounting principles and regulations
N! N! N! N! N! N! N! 15 28-30
that fra e financial state ents (Appendix 1B).
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These questions are available to assign in yBusinessCourse.
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,Module 1: Financial Accounting for MBAs
M M M M M




True/False


Topic: Users of Financial State ent Infor ation LO
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: 2
N!


1. Shareholders de and financial infor ation pri arily to assess profitability and risk whereas bankers
N ! N! N! N! N! N! N! N! N! N! N! N! N! N! N !

de and infor ation pri arily to assess cash flows to repay loan interest and principal.
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Answer: True N!


Rationale: While both shareholders and bankers are interested in all the infor ation co panies pro
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vide, shareholders care about ore about a co pany’s profitability and bankers care ore about sol
N! N! N! N!N! N! N! N! N! N! N! N! N! N!N! N! N!


vency and creditworthiness.
N! N!




Topic: Publicly Available Financial Report
N! N! N! N!


s LO: 2
N! N!


2. Publicly traded co panies are required to provide quarterly financial reports directly to the public.
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Answer: False N!


Rationale: Co panies provide electronic versions of quarterly financial state ents to the SEC, which
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!posts the to the Internet for the public to access the .
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Topic: Users of Financial State ent Infor ation LO
N! N! N! N! N! N! N! N!


: 2
N!


3. Publicly traded co panies provide financial infor ation pri arily to satisfy the SEC and the tax authorities
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(that is, the Internal Revenue Service).
N! N! N! N! N! N!




Answer: False N!


Rationale: De and for infor ation extends to any users; the regulators such as the SEC and the IR
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S are only one class of users.
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Topic: SEC Filing N! N!


s LO: 2
N! N!


4. Publicly traded co panies ust provide to the Securities Exchange Co ission annual audited financial
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state ents (10-K reports) and quarterly audited financial state ents (10-Q reports).
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Answer: False N!


Rationale: Quarterly reports do not need to be audited.
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Topic: Balance Shee N! N!


t LO: 3
N! N!


5. If a co pany reports retained earnings of $175.3 illion on its balance sheet, it ust also report $175.
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3 illion in cash.
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Answer: False N!

, Rationale: The accounting equation requires total assets to equal total liabilities plus stockhold
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ers’ equity. That does not i ply, however, that liability and equity accounts relate directly to specific ass
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ets.