WGU C214 Financial Management – OA Practice
Questions & Verified Answers | Comprehensive
Financial Management Objective Assessment
Review | 2026–2027
,10-K Annual audited financials filed with the SEC
10-Q Quarterly audited financials filed with the SEC
the form required by all public firms to be submitted Quarterly to the SEC
144A SEC rule for selling securities to an "accredited investor"
Accounting The business function responsible for creating the historical financial statements.
Accounts Payable A current liability that represents any money the firm owes suppliers and other firms.
Typically the firm does not pay interest on accounts payable.
Accounts Receivable (AR) A type of current asset which represents any money owed to the firm for services
rendered.
Accounts Receivable (AR) Turnover Credit Sales / AR
a liquidity ratio
Accredited Investors Investors deemed by the SEC to be sophisticated enough to purchase non-public
securities.
Accrual Accounting Accounting system based on recording accounts based on historical prices and the
matching principle.
Accruals Non-cash accounting accounts representing money either owed or due, typically in
the short term.
Accrued Wages Wages that the company owes to employees, but has not paid yet.
Accumulated Depreciation The total amount of depreciation claimed against the fixed assets of the firm
(Sum of depreciation expenses in prior years)
Additional Paid-in Capital (APIC) An equity item on the balance sheet representing the proceeds (price at which stock
is initially sold) minus the par value of the stock (note: par is usually $1 per share).
Affirmative Covenants A bond covenant that requires the firm to do something.
Agency Cost Corporate management acting in self-interest, rather than stockholders
,Agency Costs Costs that are incurred when management does not act in the best interests of
shareholders.The costs that result from the principle-agent problem.
American Depository Receipts (ADRs) Certificates issued by U.S. banks and traded on U.S. markets but represent shares
of foreign stocks
Amortizing Loan Loan whose monthly payments include principal payback
Angels Wealthy individuals who invest in new ventures for the return, thrill, and to help
entrepreneurs.
Annual Percentage Rate (APR) The stated annual rate (but ignores compounding)
Annual Percentage Yield (APY) The actual yield including compounding. Also known as effective annual rate or
Effective yield
Annuity A series of payments or receipts over time
Annuity Due Series of payments made at beginning of each period
APR Quoted annual interest rate, i.e. the coupon rate.
APY Effective yield, APR adjusted for Interest compounding
Asset Pricing The process of valuing assets
Asset-backed bond Bonds collateralized by corporate assets
Auction Market A market with a physical location and where prices are determined by investors'
willingness to pay. Buyers and sellers in competitive bidding for trade
Average Collection Period (ACP) AR / Daily Credit Sales
a liquidity ratio
Balance Sheet Equation Assets = Liabilities + Equity
, Balance Sheets One of the three main financial statements. It is a snapshot of the firm's assets,
liabilities, and equity at any point in time.
Bank Holding Company Act of 1956 Federal regulation designed to protect the banking industry from competition.
Beta Measure of individual stock's risk compared to the market. A measure of systematic
risk for a particular security (or portfolio) that quantifies the security's (or portfolio's)
price sensitivity to price changes in the market.
Bid/Ask spread Difference between the price to buy and the price to sell. The compensation to the
specialist for the risk that he or she bears for his or her willingness to provide
liquidity.
Bond Equivalent Yield Semi-annual yield multiplied by 2
Bond Indenture The legal document detailing a bond.
Bond maturity Date at which bond is redeemed by the corporation
Bond Ratings A rating assigned to a firm to measure the probability of default by a company like
S&P or Moody's.
Bonds Vehicles by which corporations and governments raise debt capital.
Book Value The accounting value recorded on the balance sheet.
Bulldog Bonds Bonds issued in the UK and denominated in British pounds
Business Risk aka Operating Risk, risk stemming from high fixed costs. The variability associated
with operating income.
Buyback Corporation repurchases outstanding stocks or bonds in secondary market
Callable bond Bond that may be redeemed before maturity at corporation's discretion
Capacity Percent of unused productivity of fixed assets.
Questions & Verified Answers | Comprehensive
Financial Management Objective Assessment
Review | 2026–2027
,10-K Annual audited financials filed with the SEC
10-Q Quarterly audited financials filed with the SEC
the form required by all public firms to be submitted Quarterly to the SEC
144A SEC rule for selling securities to an "accredited investor"
Accounting The business function responsible for creating the historical financial statements.
Accounts Payable A current liability that represents any money the firm owes suppliers and other firms.
Typically the firm does not pay interest on accounts payable.
Accounts Receivable (AR) A type of current asset which represents any money owed to the firm for services
rendered.
Accounts Receivable (AR) Turnover Credit Sales / AR
a liquidity ratio
Accredited Investors Investors deemed by the SEC to be sophisticated enough to purchase non-public
securities.
Accrual Accounting Accounting system based on recording accounts based on historical prices and the
matching principle.
Accruals Non-cash accounting accounts representing money either owed or due, typically in
the short term.
Accrued Wages Wages that the company owes to employees, but has not paid yet.
Accumulated Depreciation The total amount of depreciation claimed against the fixed assets of the firm
(Sum of depreciation expenses in prior years)
Additional Paid-in Capital (APIC) An equity item on the balance sheet representing the proceeds (price at which stock
is initially sold) minus the par value of the stock (note: par is usually $1 per share).
Affirmative Covenants A bond covenant that requires the firm to do something.
Agency Cost Corporate management acting in self-interest, rather than stockholders
,Agency Costs Costs that are incurred when management does not act in the best interests of
shareholders.The costs that result from the principle-agent problem.
American Depository Receipts (ADRs) Certificates issued by U.S. banks and traded on U.S. markets but represent shares
of foreign stocks
Amortizing Loan Loan whose monthly payments include principal payback
Angels Wealthy individuals who invest in new ventures for the return, thrill, and to help
entrepreneurs.
Annual Percentage Rate (APR) The stated annual rate (but ignores compounding)
Annual Percentage Yield (APY) The actual yield including compounding. Also known as effective annual rate or
Effective yield
Annuity A series of payments or receipts over time
Annuity Due Series of payments made at beginning of each period
APR Quoted annual interest rate, i.e. the coupon rate.
APY Effective yield, APR adjusted for Interest compounding
Asset Pricing The process of valuing assets
Asset-backed bond Bonds collateralized by corporate assets
Auction Market A market with a physical location and where prices are determined by investors'
willingness to pay. Buyers and sellers in competitive bidding for trade
Average Collection Period (ACP) AR / Daily Credit Sales
a liquidity ratio
Balance Sheet Equation Assets = Liabilities + Equity
, Balance Sheets One of the three main financial statements. It is a snapshot of the firm's assets,
liabilities, and equity at any point in time.
Bank Holding Company Act of 1956 Federal regulation designed to protect the banking industry from competition.
Beta Measure of individual stock's risk compared to the market. A measure of systematic
risk for a particular security (or portfolio) that quantifies the security's (or portfolio's)
price sensitivity to price changes in the market.
Bid/Ask spread Difference between the price to buy and the price to sell. The compensation to the
specialist for the risk that he or she bears for his or her willingness to provide
liquidity.
Bond Equivalent Yield Semi-annual yield multiplied by 2
Bond Indenture The legal document detailing a bond.
Bond maturity Date at which bond is redeemed by the corporation
Bond Ratings A rating assigned to a firm to measure the probability of default by a company like
S&P or Moody's.
Bonds Vehicles by which corporations and governments raise debt capital.
Book Value The accounting value recorded on the balance sheet.
Bulldog Bonds Bonds issued in the UK and denominated in British pounds
Business Risk aka Operating Risk, risk stemming from high fixed costs. The variability associated
with operating income.
Buyback Corporation repurchases outstanding stocks or bonds in secondary market
Callable bond Bond that may be redeemed before maturity at corporation's discretion
Capacity Percent of unused productivity of fixed assets.
