Test Bank for Financial Accounting for Executives & MBAs, 5th Edition by Simko

Chapter 1
The Economic Environment of
Accounting Information

Takeaways – Coverage by Question
Multiple Choice Exercises Problems

TA 1 – Describe the role of financial
accounting in facilitating a properly 8, 27, 56
functioning capital market.

TA 2 – Identify the basic financials 2, 5-7, 9,10,
statements—the income statement, the 14,17,19-22, 25,
1, 3, 6 2- 5
balance sheet, the statement of cash flow, 28, 30-40, 43-55,
and the statement of shareholders’ equity. 58-61

TA 3 – Describe the accounting principles 1, 3, 4, 12, 13,
and the role of accounting in investment 16, 23, 26, 41, 2, 4- 6 1- 3, 6
decisions. 56, 57

TA 4 – Identify the most common myths
24
about financial accounting.


TA 5 – Explain the conflicts of interest that
can arise between managers and
investors, and the costs associated with
11, 15 8
the divergent incentives that can arise
when management and ownership of a
company are separated.


TA 6 – Understand the purpose of GAAP
and identify the ten elements that form the 3, 18, 27-29, 41,
7 6
basic building blocks of the financial 42, 62
statements.




©Cambridge Business Publishers, 2021
Test Bank, Chapter 1 1-1