WGU C201 CERTIFICATION EVALUATION
EXAMS 2026 FULL SOLUTION VIEW AHEAD
◉ Which two risks does a firm face by funding the purchase of long-
term assets with short-term funding sources?
Answer: Volatility of interest rates
Frequent renewals
◉ Which funding source should a firm use if it wishes to secure long-
term financing while retaining all of its equity?
Answer: Private equity fund
◉ Which three characteristics make commercial paper a low-risk,
attractive source of short-term funding for a business?
Answer: It can make large amounts of money available.
It carries interest rates that are 1 to 2 percent less than bank loans.
It has a maturity that ranges between 1 and 270 days.
◉ What should a firm do to manage the risk of using leverage when
exploring long-term funding options?
Answer: Ensure that earnings remain larger than interest payments
,◉ Which financial statement should an investor examine to identify
the liabilities of a firm?
Answer: The balance sheet
◉ A company wishes to determine if it should fund a project with
bonds or equity.
Which business concept would it most likely use to assist in the
decision?
Answer: Leverage
◉ Which calculation determines a firm's return on equity?
Answer: Net income divided by average equity
◉ Why should companies that are conservative investors with
liquidity concerns invest their excess cash in money market funds?
Answer: It converts easily into cash.
◉ Which regulatory relationship within the Securities and Exchange
Commission (SEC) historically has acted to prohibit the U.S. from
adopting the International Financial Reporting Standards (IFRS)?
Answer: FASB requires companies to comply with GAAP that differ
from IFRS
, ◉ Which users of financial statements use the financial statements
to evaluate operations of the firm and to make investment decisions?
Answer: Owners and creditors
◉ What is considered the heart of any information system?
Answer: The database
◉ Which type of information system should be accessed by the vice
president of sales for a national department store chain who wants
to see the previous day's sales receipts?
Answer: A transaction processing system
◉ How does a virtual private network contribute to a firm's
workforce productivity?
Answer: Employees are enabled to work remotely with secure
connectivity to the corporate network via the internet.
◉ What are three ways cloud computing services enhance company
productivity?
Answer: Through more efficient application updates
Through better resource utilization
Through greater application availability for remote workers
EXAMS 2026 FULL SOLUTION VIEW AHEAD
◉ Which two risks does a firm face by funding the purchase of long-
term assets with short-term funding sources?
Answer: Volatility of interest rates
Frequent renewals
◉ Which funding source should a firm use if it wishes to secure long-
term financing while retaining all of its equity?
Answer: Private equity fund
◉ Which three characteristics make commercial paper a low-risk,
attractive source of short-term funding for a business?
Answer: It can make large amounts of money available.
It carries interest rates that are 1 to 2 percent less than bank loans.
It has a maturity that ranges between 1 and 270 days.
◉ What should a firm do to manage the risk of using leverage when
exploring long-term funding options?
Answer: Ensure that earnings remain larger than interest payments
,◉ Which financial statement should an investor examine to identify
the liabilities of a firm?
Answer: The balance sheet
◉ A company wishes to determine if it should fund a project with
bonds or equity.
Which business concept would it most likely use to assist in the
decision?
Answer: Leverage
◉ Which calculation determines a firm's return on equity?
Answer: Net income divided by average equity
◉ Why should companies that are conservative investors with
liquidity concerns invest their excess cash in money market funds?
Answer: It converts easily into cash.
◉ Which regulatory relationship within the Securities and Exchange
Commission (SEC) historically has acted to prohibit the U.S. from
adopting the International Financial Reporting Standards (IFRS)?
Answer: FASB requires companies to comply with GAAP that differ
from IFRS
, ◉ Which users of financial statements use the financial statements
to evaluate operations of the firm and to make investment decisions?
Answer: Owners and creditors
◉ What is considered the heart of any information system?
Answer: The database
◉ Which type of information system should be accessed by the vice
president of sales for a national department store chain who wants
to see the previous day's sales receipts?
Answer: A transaction processing system
◉ How does a virtual private network contribute to a firm's
workforce productivity?
Answer: Employees are enabled to work remotely with secure
connectivity to the corporate network via the internet.
◉ What are three ways cloud computing services enhance company
productivity?
Answer: Through more efficient application updates
Through better resource utilization
Through greater application availability for remote workers
