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Test Bank for Financial Accounting for MBAs, 8th Edition, by Peter Easton & John Wild, All Chapters 1-13 ||Complete A+ Guide $17.99
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Test Bank for Financial Accounting for MBAs, 8th Edition, by Peter Easton & John Wild, All Chapters 1-13 ||Complete A+ Guide
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Test Bank for Financial Accounting for MBAs, 8th Edition, by Peter Easton & John Wild, All Chapters 1-13 ||Complete A+ Guide

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  • October 28, 2024
  • 191
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • 9781618533463
  • test bank for financial accounting for mbas 8e
  • financial accounting for mbas
  • 8th edition by peter easton and john wild

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,TEST BANK FOR FINANCIAL
f f ACCOUNTING FOR MBAs 8th Edition
Stuvia.com - The Marketplace to Buy and Sell your Study Material
f
f f f
f
f f f f f f
f
f
f f f




Easton


Module 1 f




FinancialAccountingforMBAs f f f




Learning Objectives – Coverage by question f f f f f




True/False Multiple Choice
f




LO1 – Explain and assess the four main business
f f f f f f f f

activities.
f




LO2 – Identify and discuss the users and suppliers of
f f f f f f f f f
1- 4 f 1, 2
f
financial 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 profitability
f f f f f f f f
11-13 20-25
analysis.
f




LO5 – Assess business operations within the context of
f f f f f f f f
14 26, 27
f
a competitive environment.
f f f




LO6 – Access reports filed with the SEC (Appendix 1A).
f f f f f f f f f




LO7 – Describe the accounting principles and
f f f f f f

regulations that frame financial statements (Appendix
f f f f f f 15 28-30
1B).
f




These questions are available to assign in myBusinessCourse.
f f f f f f f




© fCambridge fBusiness fPublishers, f2021
1-1 Financial fAccounting ffor fMBAs, f8th fEdition

,Module 1: Financial Accounting for MBAs
f f f f f




True/False


Topic: Users of Financial Statement Information
f f f f f

LO: 2
f f

1. Shareholders demand financial information primarily to assess profitability and risk whereas bankers
f f f f f f f f f f f

demand information primarily to assess cash flows to repay loan interest and principal.
f f f f f f f f f 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 care more about
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solvency and creditworthiness.
f f f




Topic: Publicly Available Financial Reports
f f f f

LO: 2
f f

2. Publicly traded companies are required to provide quarterly financial reports directly to the public.
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Answer: False f

Rationale: Companies provide electronic versions of quarterly financial statements to the SEC, which
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posts them to the Internet for the public to access them.
f f f f f f f f f f f




Topic: Users of Financial Statement Information
f f f f f

LO: 2
f f

3. Publicly traded companies provide financial information primarily to satisfy the SEC and the
f f f f f f f f f f f f

tax authorities (that is, the Internal Revenue Service).
f f f f f f f f




Answer: False f

Rationale: Demand for information extends to many users; the regulators such as the SEC and the IRS
f f f f f f f f f f f f f f f f

are only one class of users.
f f f f f f




Topic: SEC Filings
f f

LO: 2
f f

4. Publicly traded companies must provide to the Securities Exchange Commission annual
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audited financial statements (10-K reports) and quarterly audited financial statements (10-Q reports).
f f f f f f f f f f f f




Answer: False f

Rationale: Quarterly reports do not need to be audited.
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Topic: Balance Sheet
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LO: 3
f f

5. If a company reports retained earnings of $175.3 million on its balance sheet, it must also report
f f f f f f f f f f f f f f f f

$175.3 million in cash. f f f




Answer: False f

Rationale: The accounting equation requires total assets to equal total liabilities plus stockholders’
f f f f f f f f f f f f

equity. That does not imply, however, that liability and equity accounts relate directly to specific assets.
f f f f f f f f f f f f f f f f




© fCambridge fBusiness fPublishers, f2021
Test fBank f(T/F f& fMC), fModule f1 1-2

, Topic: Balance Sheet
f f

LO: 3
f f

6. A balance sheet shows a company’s position over a period of time, whereas an income statement,
f f f f f f f f f f f f f f f

statement of stockholders’ equity, and statement of cash flows show its position at a point in time.
f f f f f f f f f f f f f f f f f




Answer: False f

Rationale: The statement is reversed: A balance sheet shows a company’s position at a point in time,
f f f f f f f f f f f f f f f f

whereas an income statement, statement of equity, and statement of cash flows show its position over
f f f f f f f f f f f f f f f f

a period of time.
f f f f




Topic: Accounting Equation
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LO: 3
f f

7. Assets must always equal liabilities plus equity.
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Answer: True f

Rationale: The accounting equation is Assets = Liabilities + Equity. This relation must always hold.
f f f f f f f f f f f f f f




Topic: Income Statement
f f

LO: 3
f f

8. The income statement reports net income which is defined as the company’s profit after all expenses
f f f f f f f f f f f f f f f

and dividends have been paid.
f f f f f




Answer: False f

Rationale: The statement contains two errors. First, net income does not include any dividends during
f f f f f f f f f f f f f f

the period; these are a distribution of profits and not part of its calculation. Second, the income
f f f f f f f f f f f f f f f f f

statement is prepared on an accrual basis and thus includes expenses incurred (as opposed to paid).
f f f f f f f f f f f f f f f f




Topic: Statement of Cash Flows
f f f f

LO: 3
f f

9. A statement of cash flows reports on cash flows for operating, investing and financing activities at a
f f f f f f f f f f f f f f f f

point in time.
f f f




Answer: False f

Rationale: A statement of cash flows reports on cash flows for operating, investing, and financing
f f f f f f f f f f f f f f

activities over a period of time.
f f f f f f




Topic: Statement of Stockholders’ Equity
f f f f

LO: 3
f f

10. An increase in common stock would be reflected in the statement of stockholders’ equity.
f f f f f f f f f f f f f




Answer: True f

Rationale: The statement of stockholders’ equity reports on changes in the accounts that make up
f f f f f f f f f f f f f f

stockholders’ equity. This includes contributed capital, retained earnings, and other equity.
f f f f f f f f f f f




© fCambridge fBusiness fPublishers, f2021
1-3 Financial fAccounting ffor fMBAs, f8th fEdition

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