WGU C214 CHAPTER 3 – BIGFOOT QUESTIONS
WITH CORRECT ANSWERS 2026
3 K Categories K of K cash K flow K are..... K - K CORRECT K ANSWER K -Operations, K Investing, K Financing-
Cash K flow K from K operations K cannot K be K managed. K - K CORRECT K ANSWER K -FALSE-
CFO K can K be K dramatically K impacted K by K managerial K discretion K in K the K financial K reporting K process.
The KStatement Kof KCash KFlows Kcategorizes Kcash Kflow Kinto Kcash Kflow Kfrom Koperations, Kcash
Kflow Kfrom Kpro Kduction, Kand Kcash Kflow Kfrom Kfinancing. K- KCORRECT KANSWER K-FALSE-
Cash Kflow Kfrom Kproduction Kis Knot Ka Kcategory. KThe Kthree Kcash Kflow Kareas Kare Kfrom
Koperations, Kinvesting, Kand Kfinancing.
(True/False) KUnlike Knet Kincome, KCFO Kis Knot Ksubject Kto Kmanagerial Kdiscretion Kor
Kmanipulation. K- KCORRECT KANSWER K-FALSE-
Solution: KThe Kanswer Kis Kfalse. KWhile Kgross Kcash Kflows Kare Kdifficult Kto Kmanage/manipulate, Kit
Kis Krelatively Keasy K to K shift K cash K flows K between K the K activity K categories K (e.g., K shifting
K between KCFO K and K CFI). K Hence, K t Khe Kanalyst Kmust Kstill Kbe Kcareful Kto Kunderstand Kthe
Kassumptions/estimates/decisions Kmade Kin Kthe Kreport Ked Kdata.
Net K income K fact K or K opinion
Cash Kflow Kfact Kor Kopinion K- KCORRECT KANSWER K-Net KIncome K=
KOpinion KCashflow K= KFact
Which Kof Kthe Kfollowing Kis Knot Ka Kreason Kfor Kthe Kdifference Kbetween KCFO Kand Knet
Kincome? K- KCORRECT KANSWER K-Net Kincome Kdoesn't Kaccount Kfor Kthe Kchange Kin
Kcash-
While K technically K true K (i.e., K net K income K doesn't K account K for K the K change K in K cash), K this K is
K not K a K reason K fo Kr K the K difference K in K CFO K and K net K income. K Neither K net K income K nor
K CFO K "accounts" K for K the K change K in K cas Kh.
Suppose Ka Kfirm Kshows Kan Kincrease Kin Kaccounts Kreceivable Kof K$100 Kduring Ka Kperiod.
KConsidered Kin Kisolat K ion, Kwhich Kof Kthe Kfollow Kbest Kdescribes Kthe Kimpact Kof Kthis Kchange
Kon Kthe KStatement Kof KCash KFlows? K- K CORRECT KANSWER K-The Kchange Kwill Kdecrease KCFO
Kby K$100-
An Kincrease Kin Kan Kasset Kaccount Kindicates Kan Koutflow Kof Kcash. KSince KA/R Kis Kan Koperating
, Kaccount, Kthe K$ K100 Kincrease Kwill Kdecrease KCFO Kby K$100.
WITH CORRECT ANSWERS 2026
3 K Categories K of K cash K flow K are..... K - K CORRECT K ANSWER K -Operations, K Investing, K Financing-
Cash K flow K from K operations K cannot K be K managed. K - K CORRECT K ANSWER K -FALSE-
CFO K can K be K dramatically K impacted K by K managerial K discretion K in K the K financial K reporting K process.
The KStatement Kof KCash KFlows Kcategorizes Kcash Kflow Kinto Kcash Kflow Kfrom Koperations, Kcash
Kflow Kfrom Kpro Kduction, Kand Kcash Kflow Kfrom Kfinancing. K- KCORRECT KANSWER K-FALSE-
Cash Kflow Kfrom Kproduction Kis Knot Ka Kcategory. KThe Kthree Kcash Kflow Kareas Kare Kfrom
Koperations, Kinvesting, Kand Kfinancing.
(True/False) KUnlike Knet Kincome, KCFO Kis Knot Ksubject Kto Kmanagerial Kdiscretion Kor
Kmanipulation. K- KCORRECT KANSWER K-FALSE-
Solution: KThe Kanswer Kis Kfalse. KWhile Kgross Kcash Kflows Kare Kdifficult Kto Kmanage/manipulate, Kit
Kis Krelatively Keasy K to K shift K cash K flows K between K the K activity K categories K (e.g., K shifting
K between KCFO K and K CFI). K Hence, K t Khe Kanalyst Kmust Kstill Kbe Kcareful Kto Kunderstand Kthe
Kassumptions/estimates/decisions Kmade Kin Kthe Kreport Ked Kdata.
Net K income K fact K or K opinion
Cash Kflow Kfact Kor Kopinion K- KCORRECT KANSWER K-Net KIncome K=
KOpinion KCashflow K= KFact
Which Kof Kthe Kfollowing Kis Knot Ka Kreason Kfor Kthe Kdifference Kbetween KCFO Kand Knet
Kincome? K- KCORRECT KANSWER K-Net Kincome Kdoesn't Kaccount Kfor Kthe Kchange Kin
Kcash-
While K technically K true K (i.e., K net K income K doesn't K account K for K the K change K in K cash), K this K is
K not K a K reason K fo Kr K the K difference K in K CFO K and K net K income. K Neither K net K income K nor
K CFO K "accounts" K for K the K change K in K cas Kh.
Suppose Ka Kfirm Kshows Kan Kincrease Kin Kaccounts Kreceivable Kof K$100 Kduring Ka Kperiod.
KConsidered Kin Kisolat K ion, Kwhich Kof Kthe Kfollow Kbest Kdescribes Kthe Kimpact Kof Kthis Kchange
Kon Kthe KStatement Kof KCash KFlows? K- K CORRECT KANSWER K-The Kchange Kwill Kdecrease KCFO
Kby K$100-
An Kincrease Kin Kan Kasset Kaccount Kindicates Kan Koutflow Kof Kcash. KSince KA/R Kis Kan Koperating
, Kaccount, Kthe K$ K100 Kincrease Kwill Kdecrease KCFO Kby K$100.
