WGU C214 Financial Management OA Study Set Exam
(Latest 2026) Questions with Revised Answers, (A+
Guarantee) LATEST UPDATE
When revenue is matched with cost of sales in an Income statement it is called? -
CORRECT ANSWER ✔✔✔✔✔ Matching principle
Basic balance sheet equation is what? - CORRECT ANSWER ✔✔✔✔✔ Equity =
Assets - Liabilities
Why is the balance sheet known as the permanent statement? - CORRECT
ANSWER ✔✔✔✔✔ Because the other statements are reset at the end of the fiscal
year.
How do you calculate the change in retained earnings? - CORRECT ANSWER
✔✔✔✔✔ Net income-dividends
Sales - Cost of Sales - other expenses = - CORRECT ANSWER ✔✔✔✔✔
Operating Income or EBiT
Name four accounts that are part of total assets? - CORRECT ANSWER ✔✔✔✔✔
Cash, Accounts receivable, inventory, long term assets
Name three accounts that are part of total liabilities? - CORRECT ANSWER
✔✔✔✔✔ Bonds, accounts payable and mortgage
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, Name four accounts that are part of current assets? - CORRECT ANSWER
✔✔✔✔✔ Inventory, cash, accounts receivable and short term investments.
Name three accounts that are only included in cash flow from financing? - CORRECT
ANSWER ✔✔✔✔✔ Common stock, dividends paid and bonds payable
Define the statement of cash flows? - CORRECT ANSWER ✔✔✔✔✔ 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? - CORRECT ANSWER ✔✔✔✔✔
Cash will decrease
What is the purpose of the statement of cash flows? - CORRECT ANSWER
✔✔✔✔✔ 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? - CORRECT ANSWER ✔✔✔✔✔
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? - CORRECT ANSWER ✔✔✔✔✔ Higher
The Operating Income Return on Investment (OIROI) uses what elements on the
income statement? - CORRECT ANSWER ✔✔✔✔✔ EBIT and total assets
Why would a company be interested in the Total Asset Turnover (TAT) ratio? -
CORRECT ANSWER ✔✔✔✔✔ To see how efficient are at producing sales
What annual interest will be paid for a zero coupon bond? - CORRECT ANSWER
✔✔✔✔✔ 0%
What is the most significant characteristic of subordinated debt? - CORRECT
ANSWER ✔✔✔✔✔ Senior debt is paid off first
If a company wants to increase its debt capital, how will they raise the funds? -
CORRECT ANSWER ✔✔✔✔✔ Sell bonds
What is the lowest level investment bond - CORRECT ANSWER ✔✔✔✔✔ BBB
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(Latest 2026) Questions with Revised Answers, (A+
Guarantee) LATEST UPDATE
When revenue is matched with cost of sales in an Income statement it is called? -
CORRECT ANSWER ✔✔✔✔✔ Matching principle
Basic balance sheet equation is what? - CORRECT ANSWER ✔✔✔✔✔ Equity =
Assets - Liabilities
Why is the balance sheet known as the permanent statement? - CORRECT
ANSWER ✔✔✔✔✔ Because the other statements are reset at the end of the fiscal
year.
How do you calculate the change in retained earnings? - CORRECT ANSWER
✔✔✔✔✔ Net income-dividends
Sales - Cost of Sales - other expenses = - CORRECT ANSWER ✔✔✔✔✔
Operating Income or EBiT
Name four accounts that are part of total assets? - CORRECT ANSWER ✔✔✔✔✔
Cash, Accounts receivable, inventory, long term assets
Name three accounts that are part of total liabilities? - CORRECT ANSWER
✔✔✔✔✔ Bonds, accounts payable and mortgage
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Page
EXAMPREPMASTER
, Name four accounts that are part of current assets? - CORRECT ANSWER
✔✔✔✔✔ Inventory, cash, accounts receivable and short term investments.
Name three accounts that are only included in cash flow from financing? - CORRECT
ANSWER ✔✔✔✔✔ Common stock, dividends paid and bonds payable
Define the statement of cash flows? - CORRECT ANSWER ✔✔✔✔✔ 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? - CORRECT ANSWER ✔✔✔✔✔
Cash will decrease
What is the purpose of the statement of cash flows? - CORRECT ANSWER
✔✔✔✔✔ 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? - CORRECT ANSWER ✔✔✔✔✔
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? - CORRECT ANSWER ✔✔✔✔✔ Higher
The Operating Income Return on Investment (OIROI) uses what elements on the
income statement? - CORRECT ANSWER ✔✔✔✔✔ EBIT and total assets
Why would a company be interested in the Total Asset Turnover (TAT) ratio? -
CORRECT ANSWER ✔✔✔✔✔ To see how efficient are at producing sales
What annual interest will be paid for a zero coupon bond? - CORRECT ANSWER
✔✔✔✔✔ 0%
What is the most significant characteristic of subordinated debt? - CORRECT
ANSWER ✔✔✔✔✔ Senior debt is paid off first
If a company wants to increase its debt capital, how will they raise the funds? -
CORRECT ANSWER ✔✔✔✔✔ Sell bonds
What is the lowest level investment bond - CORRECT ANSWER ✔✔✔✔✔ BBB
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