WGU C214 OA Financial Management Concepts Only Exam Questions and Answers Updated 2024

How does the weighted average cost of capital affect a company's growth opportunities? The lower the cost of capital, the greater the growth opportunities Stocks and bonds are two types of financial instruments (T/F) T The matching principle in accrual accounting requires that: Revenues be recognized when the earnings process is complete and matches expenses to revenues recognized. A basic equation for the balance sheet is: Equity = Assets - Liabilities Why is the Balance Sheet known as a permanent statement? Because the other statements are reset at the end of the fiscal year How do you calculate the change in Retained Earnings? Net Income - Dividends Which of the following is generally true? Operating Income and EBIT are the same Which components are part of total assets? Cash Accounts Receivable, Inventory, Long Term Assets Which components are part of current assets? Inventory, Cash, Accounts Receivable, Short-Term Investments Which components are part of Total Liabilities? Bonds, Accounts Payable, Mortgage When Fixed Assets increase what happens to Cash? Cash decreases Which is the purpose of the statement of cash flows? explains the change in cash balance for one period of time The OIROI (Operating Income Return on Investment) uses what elements on the income statement? EBIT, Total Assets Why would a company be interested in the TAT(Total Asset Turnover) ratio? How efficient assets are at producing sales Which of the following gives the largest effective rate (APY) 18.6% compounded daily