WGU C214 OA Financial Management
Question and Answer | A+ Verified
Answers | Study Pack
• Which two effects does the unbundling and offshoring of production have on
employment when the global value chain is taken into consideration? -
✓✓Unbundling and offshoring allows firms to offer intermediate and final goods
at lower prices, thus increasing employment.
Unbundling and offshoring decreases costs, which results in expansion of sales and
higher employment
• What is true about the content and structure of a balance sheet? -✓✓It reports the
assets, liabilities, and equity at a point in time
• A company reported an increase in accounts receivable of $5,000 during the
recent period. Half of this amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the
operating activities section? -✓✓The change will decrease cash flows from
operations by $5,000
• Which statement accurately explains the recognition of revenues and expenses
under accounting income and income for tax purposes? -✓✓Revenues and
expenses may be recognized in one period for accounting income purposes and in a
different period for income tax purposes.
• What is the basic equation for a balance sheet? -✓✓Assets=liabilities+equity
• What do cash flows from investing activities generally relate to? -✓✓A firm's
purchase and sale of long-term assets
• Which transaction is reflected in cash flow from operating activities? -✓✓Cash
sales to customers
• What does free cash flow represent? -✓✓Cash available for distribution after
funding required reinvestment
, • An analyst is comparing the ratios of two different firms and needs to address
timing differences.
What would be considered an example of a timing difference between the two
firms? -✓✓The firms have different fiscal years
• A companys year end balance sheet for 2013:
AR: 900
Inventory: 1200
Fixed assets: 1000
AP: 1300
Sales: 4000
Salaries: 275
What is their fixed asset turnover ratio? -✓✓4.0
• A firm has a ROE of 0.27 and the industry average ROE is 0.24
Which conclusion would an analyst draw when comparing the firm to the industry?
-✓✓The firm is generating higher returns to owners than the industry
• What is an example of an inventory method for accounting purposes? -✓✓Last
in, first out method
• A teacher won $100,000 and invests this money for 5 years at an interest rate of
4% (compounded annually).
How much will the teacher have in principal and interest at the end of the 5 years?
-✓✓$121,665
• An accountant is 40 years old with an anticipated retirement age of 70 years old.
The accountant plans to save $6,000 per year at the end of the next 30 years to
fund retirement.
How much will the accountant have upon retirement, if the accountant is able to
earn 4% annually on his investment? -✓✓$336,510
Question and Answer | A+ Verified
Answers | Study Pack
• Which two effects does the unbundling and offshoring of production have on
employment when the global value chain is taken into consideration? -
✓✓Unbundling and offshoring allows firms to offer intermediate and final goods
at lower prices, thus increasing employment.
Unbundling and offshoring decreases costs, which results in expansion of sales and
higher employment
• What is true about the content and structure of a balance sheet? -✓✓It reports the
assets, liabilities, and equity at a point in time
• A company reported an increase in accounts receivable of $5,000 during the
recent period. Half of this amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the
operating activities section? -✓✓The change will decrease cash flows from
operations by $5,000
• Which statement accurately explains the recognition of revenues and expenses
under accounting income and income for tax purposes? -✓✓Revenues and
expenses may be recognized in one period for accounting income purposes and in a
different period for income tax purposes.
• What is the basic equation for a balance sheet? -✓✓Assets=liabilities+equity
• What do cash flows from investing activities generally relate to? -✓✓A firm's
purchase and sale of long-term assets
• Which transaction is reflected in cash flow from operating activities? -✓✓Cash
sales to customers
• What does free cash flow represent? -✓✓Cash available for distribution after
funding required reinvestment
, • An analyst is comparing the ratios of two different firms and needs to address
timing differences.
What would be considered an example of a timing difference between the two
firms? -✓✓The firms have different fiscal years
• A companys year end balance sheet for 2013:
AR: 900
Inventory: 1200
Fixed assets: 1000
AP: 1300
Sales: 4000
Salaries: 275
What is their fixed asset turnover ratio? -✓✓4.0
• A firm has a ROE of 0.27 and the industry average ROE is 0.24
Which conclusion would an analyst draw when comparing the firm to the industry?
-✓✓The firm is generating higher returns to owners than the industry
• What is an example of an inventory method for accounting purposes? -✓✓Last
in, first out method
• A teacher won $100,000 and invests this money for 5 years at an interest rate of
4% (compounded annually).
How much will the teacher have in principal and interest at the end of the 5 years?
-✓✓$121,665
• An accountant is 40 years old with an anticipated retirement age of 70 years old.
The accountant plans to save $6,000 per year at the end of the next 30 years to
fund retirement.
How much will the accountant have upon retirement, if the accountant is able to
earn 4% annually on his investment? -✓✓$336,510
