WGU C214 OA Financial Management Exam Questions And
Answers
1. The stock price of a company increases and the market is deemed efficient. What assumption can be made?
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A. A new, patented, product was introduced to the market.
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B. New machinery was purchased with a useful life of 20 years.
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C. Management is optimizing its resources and operating efficiently. k
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2. Which statement is true about how the global market affects the U.S.
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A. A bad options trade executed by a foreign subsidiary of a Wall Street bank will affect layoffs overseas.
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B. A Bad derivatives trade executed by a foreign subsidiary of a Wall Street bank will affect layoffs overseas.
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C. American investors and fund managers make decisions based on financial reporting standards developed and k
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financial statements audited overseas.
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D. Foreign investors and fund managers make decisions based on financial reporting standards developed and
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financial statements audited overseas.
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3. What are secondary markets? k
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A. Markets where securities are traded subsequent to the initial offering. k
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B. Markets were securities are issued for the first time. k
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C. Markets were securities are issued through a competitive sale. k
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D. Markets where securities are issued through a negotiated sale. k
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4. A special interest group in the U.S. has been lobbying intensely for protectionism through increased tariffs and
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trade restrictions, with the argument that it will save jobs in the industry they represent. What is the most likely
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result if they are successful?
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A. Employees and shareholders of the domestic industry that produce the protective goods will be hurt and the k
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nation will benefit.
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B. The overall economy will benefit from trade restrictions and tariffs.
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C. Removing the trade restrictions and tariffs will result in a net economic loss to the overall U.S. economy. k
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nation will be hurt.
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5. What do the content and structure of a balance sheet report?
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The assets , liabilities , and equity at a point in time
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6. What is the basis used to compute a company's income tax expense?
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A. Pretax accounting income. .1 , k .1,k
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C. Net operating income. k
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7. What is the firm’s cash flow from financing, using the data above?
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Net Income k
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Change in net PP&E
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Change in long-term Liabilities $1000
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Answers
1. The stock price of a company increases and the market is deemed efficient. What assumption can be made?
k
,
.1 k
.1, k
.1, k
,
.1 k
.1, k
.1, .1, k k
,.1 k
,
.1 k
.1, k
,
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.1, k
,
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,
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,
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,
.1
A. A new, patented, product was introduced to the market.
.1, k .1, k k
,
.1 k
.1, .1,k k
.1, k
.1, k
.1,
B. New machinery was purchased with a useful life of 20 years.
k
.1, k
,
.1 k
.1, k
,
.1 k
,
.1 k
,
.1 k
,
.1 k
.1, k
,
.1 k
.1,
C. Management is optimizing its resources and operating efficiently. k
.1, k
.1 , .1 , k .1, k .1, k k
.1, .1 , k
D. Management hired new employees and invested in a training program. k
,
.1 ,k
.1 k
,
.1 k
.1, k
,
.1 k
,
.1 k
,
.1 k
,
.1 k
.1,
2. Which statement is true about how the global market affects the U.S.
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,
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,
.1 k
.1, k
,
.1 k
.1, k
.1, k
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,
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.1,
A. A bad options trade executed by a foreign subsidiary of a Wall Street bank will affect layoffs overseas.
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,
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,
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B. A Bad derivatives trade executed by a foreign subsidiary of a Wall Street bank will affect layoffs overseas.
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C. American investors and fund managers make decisions based on financial reporting standards developed and k
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financial statements audited overseas.
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D. Foreign investors and fund managers make decisions based on financial reporting standards developed and
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financial statements audited overseas.
k
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3. What are secondary markets? k
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A. Markets where securities are traded subsequent to the initial offering. k
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B. Markets were securities are issued for the first time. k
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C. Markets were securities are issued through a competitive sale. k
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,
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,
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,
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,
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,
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,
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D. Markets where securities are issued through a negotiated sale. k
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,
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,
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,
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,
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4. A special interest group in the U.S. has been lobbying intensely for protectionism through increased tariffs and
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trade restrictions, with the argument that it will save jobs in the industry they represent. What is the most likely
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result if they are successful?
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A. Employees and shareholders of the domestic industry that produce the protective goods will be hurt and the k
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nation will benefit.
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B. The overall economy will benefit from trade restrictions and tariffs.
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C. Removing the trade restrictions and tariffs will result in a net economic loss to the overall U.S. economy. k
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,
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D. Employees and shareholders of the domestic industry that produce the protected goods will benefit and the .1, k k
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nation will be hurt.
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5. What do the content and structure of a balance sheet report?
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.1
The assets , liabilities , and equity at a point in time
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6. What is the basis used to compute a company's income tax expense?
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A. Pretax accounting income. .1 , k .1,k
B. Taxable income. k
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C. Net operating income. k
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D. Taxes payable. k
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.1
7. What is the firm’s cash flow from financing, using the data above?
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,
.1 k
.1, k
,
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.1, k
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,.1 k
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Net Income k
.1, $1000
,Depreciation Expense .1 , $300
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Change in operating assets
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,
.1 $600 k
.1,
Change in net PP&E
.1, k .1, k $5000
k
.1,
Change in long-term Liabilities $1000
k
.1, k
,
.1 k
.1, . 1 , k
, Dividends Paid
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,
.1 $200
