WGU C214 FINANCIAL MANAGEMENT OA STUDY SET WITH 100% CORRECT ANSWERS

Trading on the NYSE is executed without a specialist (i.e. a market maker). True or False? Correct Answer False Stocks and Bonds are two types of financial instruments. True or False? Correct Answer True 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 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.