Test Bank for Financi
m m m
al Accounting for MB
m m m
As 8th Edition by East
m m m m
on
, Module 1 m
Financial Accounting for MBAsm m m
Learning Objectives – Coverage by question
m m m m m
True/False MultiplemChoice
LO1m–
mExplainmand massess mthemfourmmainmbusiness mactivitie
s.
LO2m–
1-m4 1,m2
mIdentif y mand mdiscussmthemusers mand msuppliers mof mfina
ncialmstatement minf ormation.
LO3m–
5-10 3-19
mDescribemand mexaminemthemf ourmf inancial mstatement
s,mand mdef inemthemaccounting mequation.
LO4m–
11-13 20-25
mExplainmand mapplymthembasics mof mprofitabilitymanalysis
.
LO5m–
14 26, m27
mAssess mbusiness moperations mwithinmthemcontext mof mam
competitivemenvironment.
LO6m–
mAccess mreports mf iled mwithmthemSECm(Appendix m1A).
LO7m–
mDescribemthemaccounting mprinciples mand mregulationsm 15 28-30
that mf ramemf inancialmstatements m(Appendix m1B).
Thesemquestions maremavailablemto massignminmmyBusinessCourse.
,Module 1: Financial Accounting for MBAs
m m m m m
True/False
Topic:mUsersmofmFinancial mS tatementmInformationm
LO:m2
1. Shareholders m demand mf inancialminf ormationmprimarily mto massess mprof itability mand mrisk mwhereas mbanker
s m demand minf ormationmprimarily mto massess mcashmf lows mto mrepay mloanminterest mand mprincipal.
Answer: mTrue
Rationale: mWhilembothmshareholders mand mbankers mareminterested minmallmtheminformationmcompanies mp
rovide, mshareholders mcaremabout mmoremabout mamcompany’s mprof itabilitymand mbankers mcaremmoremabo
utmsolvency mand mcreditworthiness.
Topic:mPubliclymAvailablemFinancial mReport
smLO:m2
2. Publicly mtraded mcompanies maremrequired mto mprovidemquarterly mf inancialmreports mdirectly mto mthempublic.
Answer: mFalse
Rationale: mCompanies mprovidemelectronic mversions mof mquarterly mf inancialmstatements mtomthemSEC, mwhic
hm posts mthemmto mthemInternet mf ormthempublic mto maccess mthem.
Topic:mUsersmofmFinancial mS tatementmInformationm
LO:m2
3. Publicly mtraded mcompanies mprovidemfinancialminformationmprimarily mtomsatisfy mthemSECmand mthemtax mauthor
ities m(that mis, mthemInternalmRevenuemService).
Answer: mFalse
Rationale: mDemand mf orminf ormationmextends mto mmany musers; mthemregulators msuchmas mthemSECmand mthe
mIRS maremonly monemclass mof musers.
Topic:mSECmFiling
smLO:m2
4. Publicly mtraded mcompanies mmust mprovidemto mthemSecurities mExchangemCommissionmannualmaudited mf inan
cialmstatements m(10-Kmreports)mand mquarterly maudited mf inancialmstatements m(10-Qmreports).
Answer: mFalse
Rationale: mQuarterly mreports mdo mnot mneed mto mbemaudited.
Topic:mBalancemShee
tmLO:m3
5. If mamcompany mreports mretained mearnings mofm$175.3mmillionmonmitsmbalancemsheet, mitmmust malsomreport m$1
75.3mmillionminmcash.
Answer: mFalse
, Rationale: mThem accounting m equationm requires m totalmassets m to m equalmtotalm liabilities m plus m stockholder
s’mequity. mThat mdoes mnot mimply,mhowever, mthat mliability mand mequity maccounts mrelatemdirectly mtomspecific mas
sets.
m m m
al Accounting for MB
m m m
As 8th Edition by East
m m m m
on
, Module 1 m
Financial Accounting for MBAsm m m
Learning Objectives – Coverage by question
m m m m m
True/False MultiplemChoice
LO1m–
mExplainmand massess mthemfourmmainmbusiness mactivitie
s.
LO2m–
1-m4 1,m2
mIdentif y mand mdiscussmthemusers mand msuppliers mof mfina
ncialmstatement minf ormation.
LO3m–
5-10 3-19
mDescribemand mexaminemthemf ourmf inancial mstatement
s,mand mdef inemthemaccounting mequation.
LO4m–
11-13 20-25
mExplainmand mapplymthembasics mof mprofitabilitymanalysis
.
LO5m–
14 26, m27
mAssess mbusiness moperations mwithinmthemcontext mof mam
competitivemenvironment.
LO6m–
mAccess mreports mf iled mwithmthemSECm(Appendix m1A).
LO7m–
mDescribemthemaccounting mprinciples mand mregulationsm 15 28-30
that mf ramemf inancialmstatements m(Appendix m1B).
Thesemquestions maremavailablemto massignminmmyBusinessCourse.
,Module 1: Financial Accounting for MBAs
m m m m m
True/False
Topic:mUsersmofmFinancial mS tatementmInformationm
LO:m2
1. Shareholders m demand mf inancialminf ormationmprimarily mto massess mprof itability mand mrisk mwhereas mbanker
s m demand minf ormationmprimarily mto massess mcashmf lows mto mrepay mloanminterest mand mprincipal.
Answer: mTrue
Rationale: mWhilembothmshareholders mand mbankers mareminterested minmallmtheminformationmcompanies mp
rovide, mshareholders mcaremabout mmoremabout mamcompany’s mprof itabilitymand mbankers mcaremmoremabo
utmsolvency mand mcreditworthiness.
Topic:mPubliclymAvailablemFinancial mReport
smLO:m2
2. Publicly mtraded mcompanies maremrequired mto mprovidemquarterly mf inancialmreports mdirectly mto mthempublic.
Answer: mFalse
Rationale: mCompanies mprovidemelectronic mversions mof mquarterly mf inancialmstatements mtomthemSEC, mwhic
hm posts mthemmto mthemInternet mf ormthempublic mto maccess mthem.
Topic:mUsersmofmFinancial mS tatementmInformationm
LO:m2
3. Publicly mtraded mcompanies mprovidemfinancialminformationmprimarily mtomsatisfy mthemSECmand mthemtax mauthor
ities m(that mis, mthemInternalmRevenuemService).
Answer: mFalse
Rationale: mDemand mf orminf ormationmextends mto mmany musers; mthemregulators msuchmas mthemSECmand mthe
mIRS maremonly monemclass mof musers.
Topic:mSECmFiling
smLO:m2
4. Publicly mtraded mcompanies mmust mprovidemto mthemSecurities mExchangemCommissionmannualmaudited mf inan
cialmstatements m(10-Kmreports)mand mquarterly maudited mf inancialmstatements m(10-Qmreports).
Answer: mFalse
Rationale: mQuarterly mreports mdo mnot mneed mto mbemaudited.
Topic:mBalancemShee
tmLO:m3
5. If mamcompany mreports mretained mearnings mofm$175.3mmillionmonmitsmbalancemsheet, mitmmust malsomreport m$1
75.3mmillionminmcash.
Answer: mFalse
, Rationale: mThem accounting m equationm requires m totalmassets m to m equalmtotalm liabilities m plus m stockholder
s’mequity. mThat mdoes mnot mimply,mhowever, mthat mliability mand mequity maccounts mrelatemdirectly mtomspecific mas
sets.
