WGU C214 Financial Management OA Study Set Exam Questions with Correct Answers - Questions & Answers | Latest | Graded A+
Trading on the NYSE is executed without a specialist (i.e. False
a market maker). True or False?
Stocks and Bonds are two types of financial instruments. True
True or False?
When revenue is matched with cost of sales in an Income Matching principle
statement it is called?
Basic balance sheet equation is what? Equity = Assets - Liabilities
Why is the balance sheet known as the permanent Because the other statements are reset at the end of the fiscal year.
statement?
How do you calculate the change in retained earnings? Net income-dividends
Sales - Cost of Sales - other expenses = Operating Income or EBiT
Name four accounts that are part of total assets? Cash, Accounts receivable, inventory, long term assets
Name three accounts that are part of total liabilities? Bonds, accounts payable and mortgage
Name four accounts that are part of current assets? Inventory, cash, accounts receivable and short term investments.
Name three accounts that are only included in cash flow Common stock, dividends paid and bonds payable
from financing?
Define the statement of cash flows? 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? Cash will decrease
What is the purpose of the statement of cash flows? Explains the change in cash over the course of the specified time frame.
Suppose the inventory turnover of a company is higher The firm has too little inventory resulting in lost sales or stock-outs.
than the industry. Based on this observation, which of the
following is most likely?
Stuvia 2026-2027
, WGU C214 Financial Management OA Study Set Exam Questions with Correct Answers - Questions & Answers | Latest | Graded A+
If a company wishes to obtain a bank loan, will it want to Higher
have a higher current ratio or a lower current ratio?
The Operating Income Return on Investment (OIROI) uses EBIT and total assets
what elements on the income statement?
Why would a company be interested in the Total Asset To see how efficient are at producing sales
Turnover (TAT) ratio?
What annual interest will be paid for a zero coupon bond? 0%
What is the most significant characteristic of subordinated Senior debt is paid off first
debt?
If a company wants to increase its debt capital, how will Sell bonds
they raise the funds?
What is the lowest level investment bond BBB
What can cause the bond price to fluctuate? A change in the bond rating, a change in the financial condition, general change in
interest rates.
What does a company use as security for a bond? Credit worthiness
Under the efficient market hypothesis, what will companies Maximize profits for a given level of risk
endeavor to do?
What does the beta coefficient represent? It is a statistically derived measure of volatility.
If an investor knows the idiosyncratic risk, the investor Beta Coefficient
knows the?
Why is the depreciation expense taken out of the net Because depreciation expense is tax deductible.
income calculation, yet added back at the end?
Why would we reject a project based on NPV? The NPV is a negative number
Why would we reject a project based on IRR? The discount rate is higher than the IRR
Stuvia 2026-2027
Trading on the NYSE is executed without a specialist (i.e. False
a market maker). True or False?
Stocks and Bonds are two types of financial instruments. True
True or False?
When revenue is matched with cost of sales in an Income Matching principle
statement it is called?
Basic balance sheet equation is what? Equity = Assets - Liabilities
Why is the balance sheet known as the permanent Because the other statements are reset at the end of the fiscal year.
statement?
How do you calculate the change in retained earnings? Net income-dividends
Sales - Cost of Sales - other expenses = Operating Income or EBiT
Name four accounts that are part of total assets? Cash, Accounts receivable, inventory, long term assets
Name three accounts that are part of total liabilities? Bonds, accounts payable and mortgage
Name four accounts that are part of current assets? Inventory, cash, accounts receivable and short term investments.
Name three accounts that are only included in cash flow Common stock, dividends paid and bonds payable
from financing?
Define the statement of cash flows? 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? Cash will decrease
What is the purpose of the statement of cash flows? Explains the change in cash over the course of the specified time frame.
Suppose the inventory turnover of a company is higher The firm has too little inventory resulting in lost sales or stock-outs.
than the industry. Based on this observation, which of the
following is most likely?
Stuvia 2026-2027
, WGU C214 Financial Management OA Study Set Exam Questions with Correct Answers - Questions & Answers | Latest | Graded A+
If a company wishes to obtain a bank loan, will it want to Higher
have a higher current ratio or a lower current ratio?
The Operating Income Return on Investment (OIROI) uses EBIT and total assets
what elements on the income statement?
Why would a company be interested in the Total Asset To see how efficient are at producing sales
Turnover (TAT) ratio?
What annual interest will be paid for a zero coupon bond? 0%
What is the most significant characteristic of subordinated Senior debt is paid off first
debt?
If a company wants to increase its debt capital, how will Sell bonds
they raise the funds?
What is the lowest level investment bond BBB
What can cause the bond price to fluctuate? A change in the bond rating, a change in the financial condition, general change in
interest rates.
What does a company use as security for a bond? Credit worthiness
Under the efficient market hypothesis, what will companies Maximize profits for a given level of risk
endeavor to do?
What does the beta coefficient represent? It is a statistically derived measure of volatility.
If an investor knows the idiosyncratic risk, the investor Beta Coefficient
knows the?
Why is the depreciation expense taken out of the net Because depreciation expense is tax deductible.
income calculation, yet added back at the end?
Why would we reject a project based on NPV? The NPV is a negative number
Why would we reject a project based on IRR? The discount rate is higher than the IRR
Stuvia 2026-2027
