WGU C708 PRINCIPLES OF FINANCE (C708) 2024 VERIFIED QUESTIONS AND ANSWERS
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Course
WGU C708 PRINCIPLES OF FINANCE
Institution
WGU C708 PRINCIPLES OF FINANCE
Matching Principle - CORRECT ANSWER The revenues and the expected incurred to generate those revenues must be reported together; a fundamental component of accrual-based accounting.
Historical Cost Principle - CORRECT ANSWER Items that appear on the financial statement are listed ...
WGU C708 PRINCIPLES OF FINANCE (C708) 2024
VERIFIED QUESTIONS AND ANSWERS
Matching Principle - CORRECT ANSWER The revenues and the
expected incurred to generate those revenues must be reported together; a
fundamental component of accrual-based accounting.
Historical Cost Principle - CORRECT ANSWER Items that appear on the
financial statement are listed at the cost when purchased.
Current Assets - CORRECT ANSWER Cash or assets that will be
converted into cash within the next year.
Gross Fixed Assets - CORRECT ANSWER Property, Plant, and
Equipment (PP&E). These are on the books at their historical cost. This does
not include accumulated depreciation (do not consider accumulated
depreciation when calculating cash flows).
Liquidity - CORRECT ANSWER The more liquid the asset, the more
quickly it can be turned into cash; measures how quickly an asset can be
turned into cash without taking a large discount in value.
Marketable Securities - CORRECT ANSWER Short-term, high-quality
securities such as Treasury Bills and certificates of deposit (CDs).
,WGU C708 PRINCIPLES OF FINANCE (C708) 2024
VERIFIED QUESTIONS AND ANSWERS
Contra-Asset Account - CORRECT ANSWER A balance/reserve account
that decreases the balance of an Accounts Receivable (AR) account if there is
doubt that all payments will be made to the firm to an amount that they
expect to collect.
Inventories - CORRECT ANSWER Includes raw material, work-in-
progress, and finished goods. They are the least liquid.
Last In, First Out (LIFO) - CORRECT ANSWER Assumes that the last
inventory items purchased by the company are the first ones sold to
customers.
First In, First Out (FIFO) - CORRECT ANSWER Assumes that the first
units purchased are the first sold.
Historical Cost - CORRECT ANSWER The original purchase price.
Book Value - CORRECT ANSWER Historical Cost - Accumulated
Depreciation
, WGU C708 PRINCIPLES OF FINANCE (C708) 2024
VERIFIED QUESTIONS AND ANSWERS
Fixed Liabilities - CORRECT ANSWER Obligations that require cash in
the next year to pay.
Notes Payable (NP) - CORRECT ANSWER The borrowing of interest-
bearing money from a financial institution that the firm will owe back.
Accruals - CORRECT ANSWER Obligations that have been uncured but
not paid, such as employee wages or utilities.
Long-Term Debt - CORRECT ANSWER A debt obligation with a
maturity longer than one year, such as rent, office staff, and administration
costs.
Common Stock and Additional Paid-In Capital - CORRECT ANSWER
Accounts that are generated when the firm issues stock.
Retained Earnings (RE) - CORRECT ANSWER Net Income - Dividends.
Money generated from the operations of the company that have been
reinvested in the existing assets of the firm.
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