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

Trading on the NYSE is executed without a specialist (i.e. a market maker). (T/F) - False Stocks and bonds are two types of financial instruments (T/F) - True 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? a - How efficient assets are at producing sales Which of the following gives the largest effective rate (APY) - 18.6% compounded daily What does the beta coefficient represent? - It is a statistically-derived measure of volatility Why is depreciation expense taken out of the net income calculation, yet added back at the end? - Because depreciation expense is tax deductible Why is the NPV preferred over the IRR? Pick Two - 1-It measures the dollar value 2- It is harder to calculate