, Module 1
Financial Accounting for MBAs
J J J
Learning JObjectives J– JCoverage Jby Jquestion
True/False Multiple
JChoice
LO1 J– JExplain Jand Jassess Jthe Jfour Jmain
JbusinessJactivities.
LO2 J– JIdentify Jand Jdiscuss Jthe Jusers Jand
1- J4 1, J2
Jsuppliers JofJfinancial Jstatement Jinformation.
LO3 J– JDescribe Jand Jexamine Jthe Jfour Jfinancial
5-10 3-19
Jstatements, Jand Jdefine Jthe Jaccounting Jequation.
LO4 J– JExplain Jand Japply Jthe Jbasics Jof
11-13 20-25
JprofitabilityJanalysis.
LO5 J– JAssess Jbusiness Joperations Jwithin Jthe
14 26, J27
JcontextJof Ja Jcompetitive Jenvironment.
LO6 J– JAccess Jreports Jfiled Jwith Jthe JSEC
J(AppendixJ1A).
LO7 J– JDescribe Jthe Jaccounting Jprinciples Jand
Jregulations Jthat Jframe Jfinancial Jstatements 15 28-30
J(AppendixJ1B).
These Jquestions Jare Javailable Jto Jassign Jin JmyBusinessCourse.
,Module 1: Financial Accounting for MBAs
True/False
Topic: JUsers Jof JFinancial JStatement
JInformationJLO: J2
1. Shareholders J demand J financial J information J primarily J to J assess J profitability J and J risk
J whereas J bankers Jdemand Jinformation Jprimarily Jto Jassess Jcash Jflows Jto Jrepay Jloan Jinterest
Jand Jprincipal.
Answer: JTrue
Rationale: JWhile Jboth Jshareholders Jand Jbankers Jare Jinterested Jin Jall Jthe Jinformation
Jcompanies Jprovide, Jshareholders Jcare Jabout Jmore Jabout Ja Jcompany‘s Jprofitability Jand
Jbankers Jcare Jmore Jabout Jsolvency Jand Jcreditworthiness.
Topic: JPublicly JAvailable JFinancial
JReportsJLO: J2
2. Publicly Jtraded Jcompanies Jare Jrequired Jto Jprovide Jquarterly Jfinancial Jreports Jdirectly Jto Jthe Jpublic.
Answer: JFalse
Rationale: J Companies J provide J electronic J versions J of J quarterly J financial J statements J to J the
J SEC, J which Jposts Jthem Jto Jthe JInternet Jfor Jthe Jpublic Jto Jaccess Jthem.
Topic: JUsers Jof JFinancial JStatement
JInformationJLO: J2
3. Publicly Jtraded Jcompanies Jprovide Jfinancial Jinformation Jprimarily Jto Jsatisfy Jthe JSEC Jand Jthe Jtax
Jauthorities J(that Jis, Jthe JInternal JRevenue JService).
Answer: JFalse
Rationale: JDemand Jfor Jinformation Jextends J to Jmany J users; Jthe Jregulators Jsuch J as Jthe JSEC
J and Jthe JIRSJare Jonly Jone Jclass Jof Jusers.
Topic: JSEC
JFilingsJLO: J2
4. Publicly Jtraded Jcompanies Jmust Jprovide Jto Jthe JSecurities JExchange JCommission Jannual Jaudited
JfinancialJstatements J(10-K Jreports) Jand Jquarterly Jaudited Jfinancial Jstatements J(10-Q Jreports).
Answer: JFalse
Rationale: JQuarterly Jreports Jdo Jnot Jneed Jto Jbe Jaudited.
Topic: JBalance
JSheetJLO: J3
5. If Ja Jcompany J reports J retained Jearnings J of J $175.3 Jmillion Jon Jits J balance Jsheet, Jit Jmust Jalso
Jreport J$175.3 Jmillion Jin Jcash.
Answer: JFalse
, Rationale: J The J accounting J equation J requires J total J assets J to J equal J total J liabilities J plus
J stockholders‘ Jequity. JThat Jdoes Jnot Jimply, Jhowever, Jthat Jliability Jand Jequity Jaccounts Jrelate
Jdirectly Jto Jspecific Jassets.
Financial Accounting for MBAs
J J J
Learning JObjectives J– JCoverage Jby Jquestion
True/False Multiple
JChoice
LO1 J– JExplain Jand Jassess Jthe Jfour Jmain
JbusinessJactivities.
LO2 J– JIdentify Jand Jdiscuss Jthe Jusers Jand
1- J4 1, J2
Jsuppliers JofJfinancial Jstatement Jinformation.
LO3 J– JDescribe Jand Jexamine Jthe Jfour Jfinancial
5-10 3-19
Jstatements, Jand Jdefine Jthe Jaccounting Jequation.
LO4 J– JExplain Jand Japply Jthe Jbasics Jof
11-13 20-25
JprofitabilityJanalysis.
LO5 J– JAssess Jbusiness Joperations Jwithin Jthe
14 26, J27
JcontextJof Ja Jcompetitive Jenvironment.
LO6 J– JAccess Jreports Jfiled Jwith Jthe JSEC
J(AppendixJ1A).
LO7 J– JDescribe Jthe Jaccounting Jprinciples Jand
Jregulations Jthat Jframe Jfinancial Jstatements 15 28-30
J(AppendixJ1B).
These Jquestions Jare Javailable Jto Jassign Jin JmyBusinessCourse.
,Module 1: Financial Accounting for MBAs
True/False
Topic: JUsers Jof JFinancial JStatement
JInformationJLO: J2
1. Shareholders J demand J financial J information J primarily J to J assess J profitability J and J risk
J whereas J bankers Jdemand Jinformation Jprimarily Jto Jassess Jcash Jflows Jto Jrepay Jloan Jinterest
Jand Jprincipal.
Answer: JTrue
Rationale: JWhile Jboth Jshareholders Jand Jbankers Jare Jinterested Jin Jall Jthe Jinformation
Jcompanies Jprovide, Jshareholders Jcare Jabout Jmore Jabout Ja Jcompany‘s Jprofitability Jand
Jbankers Jcare Jmore Jabout Jsolvency Jand Jcreditworthiness.
Topic: JPublicly JAvailable JFinancial
JReportsJLO: J2
2. Publicly Jtraded Jcompanies Jare Jrequired Jto Jprovide Jquarterly Jfinancial Jreports Jdirectly Jto Jthe Jpublic.
Answer: JFalse
Rationale: J Companies J provide J electronic J versions J of J quarterly J financial J statements J to J the
J SEC, J which Jposts Jthem Jto Jthe JInternet Jfor Jthe Jpublic Jto Jaccess Jthem.
Topic: JUsers Jof JFinancial JStatement
JInformationJLO: J2
3. Publicly Jtraded Jcompanies Jprovide Jfinancial Jinformation Jprimarily Jto Jsatisfy Jthe JSEC Jand Jthe Jtax
Jauthorities J(that Jis, Jthe JInternal JRevenue JService).
Answer: JFalse
Rationale: JDemand Jfor Jinformation Jextends J to Jmany J users; Jthe Jregulators Jsuch J as Jthe JSEC
J and Jthe JIRSJare Jonly Jone Jclass Jof Jusers.
Topic: JSEC
JFilingsJLO: J2
4. Publicly Jtraded Jcompanies Jmust Jprovide Jto Jthe JSecurities JExchange JCommission Jannual Jaudited
JfinancialJstatements J(10-K Jreports) Jand Jquarterly Jaudited Jfinancial Jstatements J(10-Q Jreports).
Answer: JFalse
Rationale: JQuarterly Jreports Jdo Jnot Jneed Jto Jbe Jaudited.
Topic: JBalance
JSheetJLO: J3
5. If Ja Jcompany J reports J retained Jearnings J of J $175.3 Jmillion Jon Jits J balance Jsheet, Jit Jmust Jalso
Jreport J$175.3 Jmillion Jin Jcash.
Answer: JFalse
, Rationale: J The J accounting J equation J requires J total J assets J to J equal J total J liabilities J plus
J stockholders‘ Jequity. JThat Jdoes Jnot Jimply, Jhowever, Jthat Jliability Jand Jequity Jaccounts Jrelate
Jdirectly Jto Jspecific Jassets.
