WGU C214 FINANCIAL MANAGEMENT
OA STUDY SET EXAM QUESTIONS AND
ANSWERS GRADED A+ 2025/2026
Trading on the NYSE is executed without a specialist (i.e. a market maker). True or False? -
ANS False
Stocks and Bonds are two types of financial instruments. True or False? - ANS True
When revenue is matched with cost of sales in an Income statement it is called? -
ANS Matching principle
Basic balance sheet equation is what? - ANS Equity = Assets - Liabilities
Why is the balance sheet known as the permanent statement? - ANS Because the other
statements are reset at the end of the fiscal year.
How do you calculate the change in retained earnings? - ANS Net income-dividends
Sales - Cost of Sales - other expenses = - ANS Operating Income or EBiT
Name four accounts that are part of total assets? - ANS Cash, Accounts receivable, inventory,
long term assets
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Name three accounts that are part of total liabilities? - ANS Bonds, accounts payable and
mortgage
Name four accounts that are part of current assets? - ANS Inventory, cash, accounts
receivable and short term investments.
Name three accounts that are only included in cash flow from financing? - ANS Common
stock, dividends paid and bonds payable
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.
When fixed assets increase what happens to cash? - ANS Cash will decrease
What is the purpose of the statement of cash flows? - ANS Explains the change in cash over
the course of the specified time frame.
Suppose the inventory turnover of a company is higher than the industry. Based on this
observation, which of the following is most likely? - ANS The firm has too little inventory
resulting in lost sales or stock-outs.
If a company wishes to obtain a bank loan, will it want to have a higher current ratio or a lower
current ratio? - ANS Higher
The Operating Income Return on Investment (OIROI) uses what elements on the income
statement? - ANS EBIT and total assets
Why would a company be interested in the Total Asset Turnover (TAT) ratio? - ANS To see how
efficient are at producing sales
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
OA STUDY SET EXAM QUESTIONS AND
ANSWERS GRADED A+ 2025/2026
Trading on the NYSE is executed without a specialist (i.e. a market maker). True or False? -
ANS False
Stocks and Bonds are two types of financial instruments. True or False? - ANS True
When revenue is matched with cost of sales in an Income statement it is called? -
ANS Matching principle
Basic balance sheet equation is what? - ANS Equity = Assets - Liabilities
Why is the balance sheet known as the permanent statement? - ANS Because the other
statements are reset at the end of the fiscal year.
How do you calculate the change in retained earnings? - ANS Net income-dividends
Sales - Cost of Sales - other expenses = - ANS Operating Income or EBiT
Name four accounts that are part of total assets? - ANS Cash, Accounts receivable, inventory,
long term assets
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Name three accounts that are part of total liabilities? - ANS Bonds, accounts payable and
mortgage
Name four accounts that are part of current assets? - ANS Inventory, cash, accounts
receivable and short term investments.
Name three accounts that are only included in cash flow from financing? - ANS Common
stock, dividends paid and bonds payable
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.
When fixed assets increase what happens to cash? - ANS Cash will decrease
What is the purpose of the statement of cash flows? - ANS Explains the change in cash over
the course of the specified time frame.
Suppose the inventory turnover of a company is higher than the industry. Based on this
observation, which of the following is most likely? - ANS The firm has too little inventory
resulting in lost sales or stock-outs.
If a company wishes to obtain a bank loan, will it want to have a higher current ratio or a lower
current ratio? - ANS Higher
The Operating Income Return on Investment (OIROI) uses what elements on the income
statement? - ANS EBIT and total assets
Why would a company be interested in the Total Asset Turnover (TAT) ratio? - ANS To see how
efficient are at producing sales
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
