WGU C214 OA Q&A Checklist QUESTIONS
WITH CORRECT ANSWERS 2025
WhichQwillQbeQlarger:QaccrualQtaxesQpayableQorQaccountingQincomeQtaxQexpenseQ-QCORRECTQANSWERQ-
AccountingQtaxQexpenseQwillQbeQhigher;QactualQtaxesQbasedQonQIRSQrulesQwillQbeQlower
WhichQfinancialQratiosQmeasureQ"efficiency"?Q-QCORRECTQANSWERQ-
AssetQturnoverQandQFixedQAssetQturnover
WhichQratioQisQtheQbestQmeasureQofQaQfirm'sQabilityQtoQpayQbills?Q-QCORRECTQANSWERQ-QuickQRatio
WhichQdecisionQrequiresQusingQsubjectiveQestimates?Q-QCORRECTQANSWERQ-EconomicQlifeQofQaQnewQasset
WhatQisQtheQyieldQtoQmaturityQonQaQbond?Q-QCORRECTQANSWERQ-
TheQreturnQearnedQfromQtheQpurchaseQdateQtoQmaturity
IfQaQfirmQbuysQaQ30-dayQCD,QwhereQisQitQcarriedQonQtheQbalanceQsheet?Q-QCORRECTQANSWERQ-
CashQandQSTQinQcurrentQassets
HowQdoesQaQ"prudentQinvestor"QselectQinvestments?Q-QCORRECTQANSWERQ-
SeeksQtheQhighestQreturnQforQ"reasonable"QamountQofQrisk
WhatQisQtheQdifferenceQbetweenQWACCQandQCAPM'sQrequiredQreturn?Q-QCORRECTQANSWERQ-
CAPMQincludesQonlyQequityQrequiredQreturn;QWACCQincludesQdebtQandQequity
WhatQdoQpointsQonQtheQEfficientQFrontierQmeasure?Q-QCORRECTQANSWERQ-
TheQmaximumQreturnQforQaQgivenQlevelQofQrisk;QmaximumQReturn-to-riskQratio
WhatQisQBeta?Q-QCORRECTQANSWERQ-MeasureQofQvolatilityQofQaQstock'sQriskQrelativeQtoQtheQmarket
WhyQareQaccurateQforecastsQimportant?Q-QCORRECTQANSWERQ-PlanQforQresourcesQtoQsupportQsales
, WhichQleverageQmeasureQshowsQtheQimpactQofQEBITQchangesQonQpre-taxQprofitQ(EBT)?Q-
QCORRECTQANSWERQ-FinancialQleverage
WhichQratiosQareQusedQinQworkingQcapitalQmanagement?Q-QCORRECTQANSWERQ-
CashQratio,QCurrentQratioQ-QratiosQcontainingQcurrentQassetsQand/orQcurrentQliabilities
WhichQratioQisQusedQforQvaluingQaQprivateQcompany?Q-QCORRECTQANSWERQ-Price-to-earningsQ(PE)Qratio
WhatQareQtheQ4QcostsQassociatedQwithQholdingQinventory?Q-QCORRECTQANSWERQ-
Product,Qstorage,Qholding,QandQopportunity
WhatQriskQisQeliminatedQbyQaQdiversifiedQportfolio?Q-QCORRECTQANSWERQ-IdiosyncraticQriskQ-
QriskQaffectingQaQsingleQfirm
WhatQisQtheQ"secondary"Qmarket?Q-QCORRECTQANSWERQ-
InvestorsQtradingQsecuritiesQamongQthemselvesQafterQinitialQissuanceQofQsecurities
WhatQareQimpactsQofQoutsourcing?Q-QCORRECTQANSWERQ-FewerQjobsQandQlowerQpricedQproducts
WhatQareQtheQimpactsQofQtariffs?Q-QCORRECTQANSWERQ-
ProtectsQinefficientQfirmsQandQemployees;QhigherQproductQcostsQforQconsumers
WhichQitemQisQtransferredQfromQtheQincomeQstatementQtoQtheQbalanceQsheet?Q-QCORRECTQANSWERQ-
DepreciationQexpense
IfQtwoQcompaniesQuseQdifferentQinventoryQvaluationQmethods,QwhatQisQthisQcalled?Q-QCORRECTQANSWERQ-
AnQ"accountingQdifference"
WhatQsecuritiesQareQexemptQfromQfederalQincomeQtaxation?Q-QCORRECTQANSWERQ-MunicipalQbonds
WhyQwouldQaQfirmQpreferQtoQissueQdebtQratherQthanQstock?Q-QCORRECTQANSWERQ-
DebQhasQaQlowerQrequiredQreturn;QdebtQinterestQisQtaxQdeductible;QavoidsQdilutionQofQownership
WITH CORRECT ANSWERS 2025
WhichQwillQbeQlarger:QaccrualQtaxesQpayableQorQaccountingQincomeQtaxQexpenseQ-QCORRECTQANSWERQ-
AccountingQtaxQexpenseQwillQbeQhigher;QactualQtaxesQbasedQonQIRSQrulesQwillQbeQlower
WhichQfinancialQratiosQmeasureQ"efficiency"?Q-QCORRECTQANSWERQ-
AssetQturnoverQandQFixedQAssetQturnover
WhichQratioQisQtheQbestQmeasureQofQaQfirm'sQabilityQtoQpayQbills?Q-QCORRECTQANSWERQ-QuickQRatio
WhichQdecisionQrequiresQusingQsubjectiveQestimates?Q-QCORRECTQANSWERQ-EconomicQlifeQofQaQnewQasset
WhatQisQtheQyieldQtoQmaturityQonQaQbond?Q-QCORRECTQANSWERQ-
TheQreturnQearnedQfromQtheQpurchaseQdateQtoQmaturity
IfQaQfirmQbuysQaQ30-dayQCD,QwhereQisQitQcarriedQonQtheQbalanceQsheet?Q-QCORRECTQANSWERQ-
CashQandQSTQinQcurrentQassets
HowQdoesQaQ"prudentQinvestor"QselectQinvestments?Q-QCORRECTQANSWERQ-
SeeksQtheQhighestQreturnQforQ"reasonable"QamountQofQrisk
WhatQisQtheQdifferenceQbetweenQWACCQandQCAPM'sQrequiredQreturn?Q-QCORRECTQANSWERQ-
CAPMQincludesQonlyQequityQrequiredQreturn;QWACCQincludesQdebtQandQequity
WhatQdoQpointsQonQtheQEfficientQFrontierQmeasure?Q-QCORRECTQANSWERQ-
TheQmaximumQreturnQforQaQgivenQlevelQofQrisk;QmaximumQReturn-to-riskQratio
WhatQisQBeta?Q-QCORRECTQANSWERQ-MeasureQofQvolatilityQofQaQstock'sQriskQrelativeQtoQtheQmarket
WhyQareQaccurateQforecastsQimportant?Q-QCORRECTQANSWERQ-PlanQforQresourcesQtoQsupportQsales
, WhichQleverageQmeasureQshowsQtheQimpactQofQEBITQchangesQonQpre-taxQprofitQ(EBT)?Q-
QCORRECTQANSWERQ-FinancialQleverage
WhichQratiosQareQusedQinQworkingQcapitalQmanagement?Q-QCORRECTQANSWERQ-
CashQratio,QCurrentQratioQ-QratiosQcontainingQcurrentQassetsQand/orQcurrentQliabilities
WhichQratioQisQusedQforQvaluingQaQprivateQcompany?Q-QCORRECTQANSWERQ-Price-to-earningsQ(PE)Qratio
WhatQareQtheQ4QcostsQassociatedQwithQholdingQinventory?Q-QCORRECTQANSWERQ-
Product,Qstorage,Qholding,QandQopportunity
WhatQriskQisQeliminatedQbyQaQdiversifiedQportfolio?Q-QCORRECTQANSWERQ-IdiosyncraticQriskQ-
QriskQaffectingQaQsingleQfirm
WhatQisQtheQ"secondary"Qmarket?Q-QCORRECTQANSWERQ-
InvestorsQtradingQsecuritiesQamongQthemselvesQafterQinitialQissuanceQofQsecurities
WhatQareQimpactsQofQoutsourcing?Q-QCORRECTQANSWERQ-FewerQjobsQandQlowerQpricedQproducts
WhatQareQtheQimpactsQofQtariffs?Q-QCORRECTQANSWERQ-
ProtectsQinefficientQfirmsQandQemployees;QhigherQproductQcostsQforQconsumers
WhichQitemQisQtransferredQfromQtheQincomeQstatementQtoQtheQbalanceQsheet?Q-QCORRECTQANSWERQ-
DepreciationQexpense
IfQtwoQcompaniesQuseQdifferentQinventoryQvaluationQmethods,QwhatQisQthisQcalled?Q-QCORRECTQANSWERQ-
AnQ"accountingQdifference"
WhatQsecuritiesQareQexemptQfromQfederalQincomeQtaxation?Q-QCORRECTQANSWERQ-MunicipalQbonds
WhyQwouldQaQfirmQpreferQtoQissueQdebtQratherQthanQstock?Q-QCORRECTQANSWERQ-
DebQhasQaQlowerQrequiredQreturn;QdebtQinterestQisQtaxQdeductible;QavoidsQdilutionQofQownership