WGU D076 EXAM Q&A: 2026 STUDY GUIDE
COMPLETE Q&A WITH FULL SOLUTION
⫸ Legal. Answer: Which type of error would result in a set
repercussion or penalty given by the government?
⫸ Moral. Answer: Lucas is a financial advisor working for Bullzai,
Inc. He is faced with a dilemma. Bullzai has started changing its
practices in order to increase profit. As a financial advisor, he is now
supposed to suggest to clients to invest in portfolios that will not do as
well as the portfolios that Bullzai is invested in. This is an accepted
practice done by other businesses in the industry, and it complies with
all standards set by the government. However, Lucas knows that this
practice is not in his clients' best interest. What type of dilemma is
Lucas facing?
⫸ An ethical action is based on accepted standards of conduct..
Answer: What characterizes an ethical action?
⫸ Moral. Answer: Which term reflects a person's beliefs about right
and wrong, good and bad, or just and unjust?
⫸ Accounting. Answer: The system of recording, reporting, and
summarizing past financial information and transactions.
,⫸ Accounts Receivable Turnover (AR Turnover). Answer: An
activity ratio found by credit sales divided by accounts receivable.
⫸ Activity Ratios. Answer: A category of ratios that measure how
well a company uses its assets to generate sales or cash, showing the
firm's operational efficiency and profitability.
⫸ Additional Funds Needed (AFN). Answer: Another name for the
discretionary financing needed or external financing needed. It
represents the additional financing needed given a firm's expectations
for future growth.
⫸ Affirmative Covenants. Answer: A bond covenant that describes
things the company pledges itself to do in order to protect
bondholders.Go To
⫸ Agency Costs. Answer: Costs that are incurred when management
does not act in the best interest of shareholders.
⫸ Agency Problem. Answer: When the agent (the management) does
not act in the best interest of the principal (the owners).Go To
⫸ Aggressive Assets. Answer: Companies or securities with beta
greater than 1.
⫸ Annual Percentage Rate. Answer: The annual interest rate that is
charged for borrowing money or that is earned through investment.
,⫸ Annuity. Answer: A stream of cash flows of an equal amount paid
every consecutive period.Go To
⫸ Annuity Due. Answer: A series of equal payments made at the
beginning of consecutive periods.Go To
⫸ Asset Pricing. Answer: The process of valuing assets.
⫸ Auction Market. Answer: A secondary market with a physical
location and where prices are determined by investors' willingness to
pay.Go To
⫸ Average Collection Period (ACP). Answer: An activity ratio found
by the number of days in a year (365) divided by AR turnover.Go To
⫸ Balance Sheet Forecasting. Answer: Using sales growth and the
profit forecast to construct a pro forma balance sheet to understand
the future implications of the sources and uses of finances.
⫸ Banks and Credit Unions. Answer: Receive deposits and extend
loans to individuals and businesses.
⫸ Benchmarking. Answer: The process of completing a financial
analysis to compare a firm's financial performance to that of other
similar firms.
, ⫸ Beta. Answer: A variable that describes how the price of a security
varies with the market.
⫸ Bid-ask Spread. Answer: The difference between the bid and ask
prices that compensate the specialist for the risk that he or she bears
for willingness to provide liquidity.
⫸ Board of Directors. Answer: A group of people who jointly
supervise the activities of an organization.
⫸ Bond Indenture. Answer: A legal contract that governs the
relationship between a firm and its bondholders.Go To
⫸ Bondholders. Answer: A person who loans a corporation money by
buying debt securities.Go To
⫸ Business Finance. Answer: An area of finance that deals with
sources of funding, the capital structure of corporations, the actions
that managers take to increase the value of the firm to its owners, and
the tools and analysis used to allocate financial resources.Go To
⫸ Cannibalization. Answer: The reduction in sales of a company's
own products due to introduction of another similar product.Go To
COMPLETE Q&A WITH FULL SOLUTION
⫸ Legal. Answer: Which type of error would result in a set
repercussion or penalty given by the government?
⫸ Moral. Answer: Lucas is a financial advisor working for Bullzai,
Inc. He is faced with a dilemma. Bullzai has started changing its
practices in order to increase profit. As a financial advisor, he is now
supposed to suggest to clients to invest in portfolios that will not do as
well as the portfolios that Bullzai is invested in. This is an accepted
practice done by other businesses in the industry, and it complies with
all standards set by the government. However, Lucas knows that this
practice is not in his clients' best interest. What type of dilemma is
Lucas facing?
⫸ An ethical action is based on accepted standards of conduct..
Answer: What characterizes an ethical action?
⫸ Moral. Answer: Which term reflects a person's beliefs about right
and wrong, good and bad, or just and unjust?
⫸ Accounting. Answer: The system of recording, reporting, and
summarizing past financial information and transactions.
,⫸ Accounts Receivable Turnover (AR Turnover). Answer: An
activity ratio found by credit sales divided by accounts receivable.
⫸ Activity Ratios. Answer: A category of ratios that measure how
well a company uses its assets to generate sales or cash, showing the
firm's operational efficiency and profitability.
⫸ Additional Funds Needed (AFN). Answer: Another name for the
discretionary financing needed or external financing needed. It
represents the additional financing needed given a firm's expectations
for future growth.
⫸ Affirmative Covenants. Answer: A bond covenant that describes
things the company pledges itself to do in order to protect
bondholders.Go To
⫸ Agency Costs. Answer: Costs that are incurred when management
does not act in the best interest of shareholders.
⫸ Agency Problem. Answer: When the agent (the management) does
not act in the best interest of the principal (the owners).Go To
⫸ Aggressive Assets. Answer: Companies or securities with beta
greater than 1.
⫸ Annual Percentage Rate. Answer: The annual interest rate that is
charged for borrowing money or that is earned through investment.
,⫸ Annuity. Answer: A stream of cash flows of an equal amount paid
every consecutive period.Go To
⫸ Annuity Due. Answer: A series of equal payments made at the
beginning of consecutive periods.Go To
⫸ Asset Pricing. Answer: The process of valuing assets.
⫸ Auction Market. Answer: A secondary market with a physical
location and where prices are determined by investors' willingness to
pay.Go To
⫸ Average Collection Period (ACP). Answer: An activity ratio found
by the number of days in a year (365) divided by AR turnover.Go To
⫸ Balance Sheet Forecasting. Answer: Using sales growth and the
profit forecast to construct a pro forma balance sheet to understand
the future implications of the sources and uses of finances.
⫸ Banks and Credit Unions. Answer: Receive deposits and extend
loans to individuals and businesses.
⫸ Benchmarking. Answer: The process of completing a financial
analysis to compare a firm's financial performance to that of other
similar firms.
, ⫸ Beta. Answer: A variable that describes how the price of a security
varies with the market.
⫸ Bid-ask Spread. Answer: The difference between the bid and ask
prices that compensate the specialist for the risk that he or she bears
for willingness to provide liquidity.
⫸ Board of Directors. Answer: A group of people who jointly
supervise the activities of an organization.
⫸ Bond Indenture. Answer: A legal contract that governs the
relationship between a firm and its bondholders.Go To
⫸ Bondholders. Answer: A person who loans a corporation money by
buying debt securities.Go To
⫸ Business Finance. Answer: An area of finance that deals with
sources of funding, the capital structure of corporations, the actions
that managers take to increase the value of the firm to its owners, and
the tools and analysis used to allocate financial resources.Go To
⫸ Cannibalization. Answer: The reduction in sales of a company's
own products due to introduction of another similar product.Go To
