WGU C214 OA COMPREHENSIVE EXAM
PREP QUESTIONS AND SOLUTIONS
VERIFIED STUDY RESOURCE
●● Why are American regulators focused on international investing in a
global marketplace?
Answer: Because international investing in a global marketplace is the
concern of
American investors
●● What is one of the two basic types of financial instruments?
Answer: Bonds
●● If a company outsources the manufacturing of its products to a
foreign country, what are the likeliest
outcomes?
Answer: Consumer prices will decrease and Domestic employment will
decrease.
●● What is true about the content and structure of a balance sheet?
Answer: It reports the assets, liabilities, and equity at a point in time.
,●● A company reported an increase in accounts receivable of $5,000
during the recent period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from
the operating activities section?
Answer: The change will decrease cash flows from operations by
$5,000.
●● Which statement accurately explains the recognition of revenues and
expenses under accounting income
and income for tax purposes?
Answer: Revenues and expenses may be recognized in one period for
accounting income purposes and in a different period for income tax
purposes.
●● Selected Data for 20x2 for ABD Inc.
Netincome $ 1,000
Depreciation expense $ 300
Change in operating assets $ 600
Change in net property, plant, and equipment$ 5,000
Changes in long-term liabilities $ 1,000
Dividends paid $ 200
, What is the firm's cash flow from investments, using the data above and
assuming no asset disposals?
Answer: $5,300 outflow
●● What is the basic equation for a balance sheet?
Answer: Assets = Liabilities + Equity
●● What do cash flows from investing activities generally relate to?
Answer: A firm's purchase and sale of long-term assets
●● Which transaction is reflected in cash flow from operating activities?
Answer: Cash sales to customers
●● What does free cash flow represent?
Answer: Cash available for distribution after funding required
reinvestment
●● An analyst is comparing the ratios of two firms and needs to address
timing differences. What would be considered an example of a timing
difference between the two firms?
Answer: The firms have different fiscal years.
●● A company's year-end balance sheetfor 2013 shows the following:
PREP QUESTIONS AND SOLUTIONS
VERIFIED STUDY RESOURCE
●● Why are American regulators focused on international investing in a
global marketplace?
Answer: Because international investing in a global marketplace is the
concern of
American investors
●● What is one of the two basic types of financial instruments?
Answer: Bonds
●● If a company outsources the manufacturing of its products to a
foreign country, what are the likeliest
outcomes?
Answer: Consumer prices will decrease and Domestic employment will
decrease.
●● What is true about the content and structure of a balance sheet?
Answer: It reports the assets, liabilities, and equity at a point in time.
,●● A company reported an increase in accounts receivable of $5,000
during the recent period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from
the operating activities section?
Answer: The change will decrease cash flows from operations by
$5,000.
●● Which statement accurately explains the recognition of revenues and
expenses under accounting income
and income for tax purposes?
Answer: Revenues and expenses may be recognized in one period for
accounting income purposes and in a different period for income tax
purposes.
●● Selected Data for 20x2 for ABD Inc.
Netincome $ 1,000
Depreciation expense $ 300
Change in operating assets $ 600
Change in net property, plant, and equipment$ 5,000
Changes in long-term liabilities $ 1,000
Dividends paid $ 200
, What is the firm's cash flow from investments, using the data above and
assuming no asset disposals?
Answer: $5,300 outflow
●● What is the basic equation for a balance sheet?
Answer: Assets = Liabilities + Equity
●● What do cash flows from investing activities generally relate to?
Answer: A firm's purchase and sale of long-term assets
●● Which transaction is reflected in cash flow from operating activities?
Answer: Cash sales to customers
●● What does free cash flow represent?
Answer: Cash available for distribution after funding required
reinvestment
●● An analyst is comparing the ratios of two firms and needs to address
timing differences. What would be considered an example of a timing
difference between the two firms?
Answer: The firms have different fiscal years.
●● A company's year-end balance sheetfor 2013 shows the following:
