WGU C214 Financial Management OA Study Set
Ques ons and answers With complete solu on
2025/2026 RATED A+ 100% VERIFIED CORRECT
Trading on the NYSE is executed without a specialist (i.e. a market maker). True or False? -
Answers False
Stocks and Bonds are two types of financial instruments. True or False? - Answers True
When revenue is matched with cost of sales in an Income statement it is called? - Answers
Matching principle
Basic balance sheet equa+on is what? - Answers Equity = Assets - Liabili+es
Why is the balance sheet known as the permanent statement? - Answers Because the other
statements are reset at the end of the fiscal year.
How do you calculate the change in retained earnings? - Answers Net income-dividends
Sales - Cost of Sales - other expenses = - Answers Opera+ng Income or EBiT
Name four accounts that are part of total assets? - Answers Cash, Accounts receivable,
inventory, long term assets
Name three accounts that are part of total liabili+es? - Answers Bonds, accounts payable and
mortgage
, Name four accounts that are part of current assets? - Answers Inventory, cash, accounts
receivable and short term investments.
Name three accounts that are only included in cash flow from financing? - Answers Common
stock, dividends paid and bonds payable
Define the statement of cash flows? - Answers Calculated for the same period of +me as the
incomes statement is calculated based on the income statement and changes in the balance
sheet is one of the three basic accoun+ng statements.
When fixed assets increase what happens to cash? - Answers Cash will decrease
What is the purpose of the statement of cash flows? - Answers Explains the change in cash
over the course of the specified +me frame.
Suppose the inventory turnover of a company is higher than the industry. Based on this
observa+on, which of the following is most likely? - Answers The firm has too li4le inventory
resul+ng in lost sales or stock-outs.
If a company wishes to obtain a bank loan, will it want to have a higher current ra+o or a lower
current ra+o? - Answers Higher
The Opera+ng Income Return on Investment (OIROI) uses what elements on the income
statement? - Answers EBIT and total assets
Why would a company be interested in the Total Asset Turnover (TAT) ra+o? - Answers To see
how efficient are at producing sales
What annual interest will be paid for a zero coupon bond? - Answers 0%
Ques ons and answers With complete solu on
2025/2026 RATED A+ 100% VERIFIED CORRECT
Trading on the NYSE is executed without a specialist (i.e. a market maker). True or False? -
Answers False
Stocks and Bonds are two types of financial instruments. True or False? - Answers True
When revenue is matched with cost of sales in an Income statement it is called? - Answers
Matching principle
Basic balance sheet equa+on is what? - Answers Equity = Assets - Liabili+es
Why is the balance sheet known as the permanent statement? - Answers Because the other
statements are reset at the end of the fiscal year.
How do you calculate the change in retained earnings? - Answers Net income-dividends
Sales - Cost of Sales - other expenses = - Answers Opera+ng Income or EBiT
Name four accounts that are part of total assets? - Answers Cash, Accounts receivable,
inventory, long term assets
Name three accounts that are part of total liabili+es? - Answers Bonds, accounts payable and
mortgage
, Name four accounts that are part of current assets? - Answers Inventory, cash, accounts
receivable and short term investments.
Name three accounts that are only included in cash flow from financing? - Answers Common
stock, dividends paid and bonds payable
Define the statement of cash flows? - Answers Calculated for the same period of +me as the
incomes statement is calculated based on the income statement and changes in the balance
sheet is one of the three basic accoun+ng statements.
When fixed assets increase what happens to cash? - Answers Cash will decrease
What is the purpose of the statement of cash flows? - Answers Explains the change in cash
over the course of the specified +me frame.
Suppose the inventory turnover of a company is higher than the industry. Based on this
observa+on, which of the following is most likely? - Answers The firm has too li4le inventory
resul+ng in lost sales or stock-outs.
If a company wishes to obtain a bank loan, will it want to have a higher current ra+o or a lower
current ra+o? - Answers Higher
The Opera+ng Income Return on Investment (OIROI) uses what elements on the income
statement? - Answers EBIT and total assets
Why would a company be interested in the Total Asset Turnover (TAT) ra+o? - Answers To see
how efficient are at producing sales
What annual interest will be paid for a zero coupon bond? - Answers 0%
