WGU D076 PA Exam Questions With
Correct Answers
In which way is accounting different from finance?
-Accounting is backward looking, while finance is focused on the future.
-Accounting is about budgeting, saving, and borrowing, while finance is about investing,
forecasting, and lending.
-Accou...
In which way is accounting different from finance?
-Accounting is backward looking, while finance is focused on the future.
-Accounting is about budgeting, saving, and borrowing, while finance is about investing,
forecasting, and lending.
-Accounting is focused on allocating capital, while finance is focused on bringing in capital.
-Accounting forecasts future performance, given the past, while finance records past
performance. - answer✔Accounting is backward looking, while finance is focused on the future.
What is the main question that both individuals and companies must consider when making
financial decisions to reach a goal?
-Will utility be maximized through this decision?
-Will this decision require debt or equity financing?
-Will the benefits of the action outweigh the costs?
-Will this decrease the amount of cash available? - answer✔Will the benefits of the action
outweigh the costs?
A financial manager at a company is trying to determine whether to issue new stocks or new
bonds to cover the costs of a project the company is doing the next year.
Which main task in business finance is this situation an example of?
-Managing interdepartmental loans
-Making investment decisions
-Managing working capital
-Making financing decisions - answer✔Making financing decisions
How can investing help a person reach personal financial goals?
-It provides access to potential revenue or increases in value to help meet goals faster.
-It provides a guaranteed future outcome in order to predictably meet financial goals.
-It ensures money is placed in a safe, risk-free, and easily accessible financial asset.
-It helps a person understand how money was spent previously in order to reliably predict future
expenses. - answer✔It provides access to potential revenue or increases in value to help meet
goals faster.
A sign company is planning to have an initial public offering (IPO). In which type of market will
its stock first be sold to the public?
-Money market
-Secondary market
-Primary market
-Efficient market - answer✔Primary Market
Which type of economic indicator changes after the economy changes and helps identify trends
in the long term?
-Leading indicator
-Yield curve indicator
-Coincident indicator
-Lagging indicator - answer✔Lagging indicator
How does an investment institution, such as a mutual fund, facilitate the circulation of money in
the economy?
-By raising capital on a contractual basis, such as an insurance contract
-By providing individuals and firms access to financial markets to buy or sell financial securities
-By insuring deposits in investment accounts up to $250,000 to promote public confidence
-By accepting deposits of money, paying interest on deposits, and providing loans to individuals
and organizations - answer✔By providing individuals and firms access to financial markets to
buy or sell financial securities
Which type of economic indicator is used by governments and policymakers to implement or
alter policies in an effort to avoid or minimize the effects of an economic downturn?
-Leading indicator - answer✔Leading indicator
Suppose an individual does not eat chocolate because eating chocolate goes against his personal
beliefs. Which type of standard is this?
-Ethical
-Moral
-Legal
-Financial - answer✔Moral
Which action is based upon moral standards?
-Although there is no company policy regarding it, a financial manager chooses not to accept
gifts from the company's clients to ensure that she does not create a conflict of interest.
-Since it is generally accepted in the company that no personal information about clients should
be released without written permission, a financial manager denies the request for a third party to
access its data.
-As mandated by government regulations, a financial manager files a registration statement with
the U.S. Securities and Exchange Commission (SEC) before offering equity securities for sale.
-As outlined in the company's policies, a financial manager hires a third-party entity to review all
annual report filings to ensure they are compliant with applicable generally accepted accounting
principles (GAAP). - answer✔Although there is no company policy regarding it, a financial
manager chooses not to accept gifts from the company's clients to ensure that she does not create
a conflict of interest.
What should a potential bondholder (lender) do to prevent a company (borrower) from taking on
risky projects?
-Separate owners from management so their interests do not conflict
-Encourage manipulation of accounting procedures to optimize the company's profit
-Set strict covenants that the company cannot uphold if it chooses a risky project
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller sirjoel. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
