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WGU C214 Financial Management OA
Study Set Questions and Correct
Detailed Answers (Verified Answers)
Q: Trading on the NYSE is executed without a specialist (i.e. a
market maker). True or False?
Ans: False
Q: Stocks and Bonds are two types of financial instruments. True
or False?
Ans: True
Q: When revenue is matched with cost of sales in an Income
statement it is called?
Ans: Matching principle
Q: Basic balance sheet equation is what?
Master01 | 2025/2026 | Latest update
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Ans: Equity = Assets - Liabilities
Q: Why is the balance sheet known as the permanent statement?
Ans: Because the other statements are reset at the end of the fiscal year.
Q: How do you calculate the change in retained earnings?
Ans: Net income-dividends
Q: Sales - Cost of Sales - other expenses =
Ans: Operating Income or EBiT
Q: Name four accounts that are part of total assets?
Ans: Cash, Accounts receivable, inventory, long term assets
Q: Name three accounts that are part of total liabilities?
Ans: Bonds, accounts payable and mortgage
Q: Name four accounts that are part of current assets?
Master01 | 2025/2026 | Latest update
, 3
Ans: Inventory, cash, accounts receivable and short term investments.
Q: Name three accounts that are only included in cash flow from
financing?
Ans: Common stock, dividends paid and bonds payable
Q: Define the statement of cash flows?
Ans: Calculated for the same period of time as the incomes statement is
calculated based on the income statement and changes in the balance sheet is one
of the three basic accounting statements.
Q: When fixed assets increase what happens to cash?
Ans: Cash will decrease
Q: What is the purpose of the statement of cash flows?
Ans: Explains the change in cash over the course of the specified time frame.
Q: Suppose the inventory turnover of a company is higher than
the industry. Based on this observation, which of the following is
most likely?
Master01 | 2025/2026 | Latest update
WGU C214 Financial Management OA
Study Set Questions and Correct
Detailed Answers (Verified Answers)
Q: Trading on the NYSE is executed without a specialist (i.e. a
market maker). True or False?
Ans: False
Q: Stocks and Bonds are two types of financial instruments. True
or False?
Ans: True
Q: When revenue is matched with cost of sales in an Income
statement it is called?
Ans: Matching principle
Q: Basic balance sheet equation is what?
Master01 | 2025/2026 | Latest update
, 2
Ans: Equity = Assets - Liabilities
Q: Why is the balance sheet known as the permanent statement?
Ans: Because the other statements are reset at the end of the fiscal year.
Q: How do you calculate the change in retained earnings?
Ans: Net income-dividends
Q: Sales - Cost of Sales - other expenses =
Ans: Operating Income or EBiT
Q: Name four accounts that are part of total assets?
Ans: Cash, Accounts receivable, inventory, long term assets
Q: Name three accounts that are part of total liabilities?
Ans: Bonds, accounts payable and mortgage
Q: Name four accounts that are part of current assets?
Master01 | 2025/2026 | Latest update
, 3
Ans: Inventory, cash, accounts receivable and short term investments.
Q: Name three accounts that are only included in cash flow from
financing?
Ans: Common stock, dividends paid and bonds payable
Q: Define the statement of cash flows?
Ans: Calculated for the same period of time as the incomes statement is
calculated based on the income statement and changes in the balance sheet is one
of the three basic accounting statements.
Q: When fixed assets increase what happens to cash?
Ans: Cash will decrease
Q: What is the purpose of the statement of cash flows?
Ans: Explains the change in cash over the course of the specified time frame.
Q: Suppose the inventory turnover of a company is higher than
the industry. Based on this observation, which of the following is
most likely?
Master01 | 2025/2026 | Latest update
