WGU D514 Accounting / Financial Management/Financial
Accounting Foundations OA
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. How is gross profit computed?
a) Total revenues minus total expenses
b) Sales minus cost of goods sold
c) Accounts receivable minus accounts payable
d) Total assets minus total liabilities - ANSWER Sales minus cost of goods
sold
2. Which type of account is retained earnings?
a) Revenue
b) Asset
c) Equity
d) Liability - ANSWER Equity
3. For purposes of cash flow classification in the statement of cash flows,
which item is an operating activity?
a) Buying equipment
b) Selling bonds
c) Distributing dividends
d) Paying employees - ANSWER Paying employees
,4. How does a classified balance sheet provide useful information to a
decision maker?
a) It distinguishes between current and long-term assets.
b) It provides data for a period of time instead of as a point in time.
c) It distinguishes liabilities from expenses.
d) It provides data that are not publicly disclosed. - ANSWER It
distinguishes between current and long-term assets.
5. What information does a balance sheet provide to a decision maker?
a) Summary of the operating performance of a company during a period
b) Summary of the financial position of a company at a particular date
c) Summary of the cash flows of a company during a period
d) Summary of the operating performance of a company at a particular date -
ANSWER Summary of the financial position of a company at a particular
date
6. What is an account payable?
a) The amount owed by a company that purchased goods or services from a
supplier on credit
b) The amount owed to a company that sold goods or services to a customer
on credit
c) The amount to be paid by a company in repayment of both loans and
dividends
d) The amount to be paid by a company for dividends to shareholders -
ANSWER The amount owed by a company that purchased goods or
services from a supplier on credit
7. Horizontal and Vertical Analysis
, Based on your analysis, what should management be concerned about?
a) The increase in interest expenses over the past two years
b) The increase in operating expenses over the past two years
c) The increase in income taxes over the past two years
d) The increase in production cost over the past two years - ANSWER The
increase in operating expenses over the past two years
You Selected
8. Which action would make the profitability of the company in 20X9 the same
as in 20X7?
a) Increasing the proportion of gross profit to sales by about 2%
b) Paying back interest expenses earlier in the year
c) Decreasing the proportion of operating income to sales by about 2%
d) Increasing the operating expenses by about $20,000 - ANSWER
Increasing the proportion of gross profit to sales by about 2%
9. Managing Cash Flow
Why is the net cash for December negative while total sales for December are the
highest out of the months from October through December?
a) December general and administrative expenses are expected to be much
higher.
b) Credit sales are disproportionately low wiith respect to total sales
compared to other months.
c) December cash use is disproportionally high with respect to total sales
compared to other months.
d) Total cash available does not reflect December sales because there was a
high volume of credit sales. - ANSWER Total cash available does not
reflect December sales because there was a high volume of credit sales.
Accounting Foundations OA
Comprehensive Resource To Help You Ace 2026-2027
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!!
Current Update!!
1. How is gross profit computed?
a) Total revenues minus total expenses
b) Sales minus cost of goods sold
c) Accounts receivable minus accounts payable
d) Total assets minus total liabilities - ANSWER Sales minus cost of goods
sold
2. Which type of account is retained earnings?
a) Revenue
b) Asset
c) Equity
d) Liability - ANSWER Equity
3. For purposes of cash flow classification in the statement of cash flows,
which item is an operating activity?
a) Buying equipment
b) Selling bonds
c) Distributing dividends
d) Paying employees - ANSWER Paying employees
,4. How does a classified balance sheet provide useful information to a
decision maker?
a) It distinguishes between current and long-term assets.
b) It provides data for a period of time instead of as a point in time.
c) It distinguishes liabilities from expenses.
d) It provides data that are not publicly disclosed. - ANSWER It
distinguishes between current and long-term assets.
5. What information does a balance sheet provide to a decision maker?
a) Summary of the operating performance of a company during a period
b) Summary of the financial position of a company at a particular date
c) Summary of the cash flows of a company during a period
d) Summary of the operating performance of a company at a particular date -
ANSWER Summary of the financial position of a company at a particular
date
6. What is an account payable?
a) The amount owed by a company that purchased goods or services from a
supplier on credit
b) The amount owed to a company that sold goods or services to a customer
on credit
c) The amount to be paid by a company in repayment of both loans and
dividends
d) The amount to be paid by a company for dividends to shareholders -
ANSWER The amount owed by a company that purchased goods or
services from a supplier on credit
7. Horizontal and Vertical Analysis
, Based on your analysis, what should management be concerned about?
a) The increase in interest expenses over the past two years
b) The increase in operating expenses over the past two years
c) The increase in income taxes over the past two years
d) The increase in production cost over the past two years - ANSWER The
increase in operating expenses over the past two years
You Selected
8. Which action would make the profitability of the company in 20X9 the same
as in 20X7?
a) Increasing the proportion of gross profit to sales by about 2%
b) Paying back interest expenses earlier in the year
c) Decreasing the proportion of operating income to sales by about 2%
d) Increasing the operating expenses by about $20,000 - ANSWER
Increasing the proportion of gross profit to sales by about 2%
9. Managing Cash Flow
Why is the net cash for December negative while total sales for December are the
highest out of the months from October through December?
a) December general and administrative expenses are expected to be much
higher.
b) Credit sales are disproportionately low wiith respect to total sales
compared to other months.
c) December cash use is disproportionally high with respect to total sales
compared to other months.
d) Total cash available does not reflect December sales because there was a
high volume of credit sales. - ANSWER Total cash available does not
reflect December sales because there was a high volume of credit sales.
