WGU C214 Exam/ WGU C214 Actual Final Exam/
Updated Questions with Correct Verified Answers –
Latest Version 2024.
Trading on the NYSE is executed without a specialist (i.e. a market maker). (T/F) - Correct Answer - F
Stocks and bonds are two types of financial instruments (T/F) - Correct Answer - T
The matching principle in accrual accounting requires that:
a. Revenues be recognized when the earnings process is complete and matches expenses to revenues
recognized.
b. Expenses are matched to the year in which they are incurred
c. Revenues are matched to the year in which they are booked
d. Revenues should be large enough to match expenses - Correct Answer - a
A basic equation for the balance sheet is:
a. Equity = Assets - Liabilities
b. Liabilities = Equity + Assets
c. Assets = Liabilities - Equity
d. Assets = Equity - Liabilities - Correct Answer - a
Why is the Balance Sheet known as a permanent statement?
a. Because the statement is sent to the SEC.
b. Because the other statements are reset at the end of the fiscal year
c. Because it is printed out and archived
d. Because it persists in the minds of the shareholders. - Correct Answer - b
pg. 1
,How do you calculate the change in Retained Earnings?
a. Ending Retained Earnings - Change in Cash
b. EBIT divided by Total Assets + Dividends
c. EBIT - Change in Cash - Dividends
d. Net Income - Dividends - Correct Answer - d
Which of the following is generally true?
a. Gross Profit and Operating Income are the same
b. Cost of Goods Sold + Operating Expenses = Net Income
c. Operating Income and EBIT are the same
d. EBIT + Income Taxes = Net income - Correct Answer - c
Which components are part of total assets?
a. Cash, Accounts Receivable, Short Term Debt
b. Cash Accounts Receivable, Inventory, Long Term Assets
c. Accounts Payable, Long Term Assets, Long Term Debt
d. Accounts Payable, Net Income, Equity - Correct Answer - b
Which components are part of current assets?
a. Cash, Accounts Receivable, Property Plant & Equipment
b. Accounts Receivable, Accounts Payable, Inventory
c. Long Term Debt, Property Plant & Equipment, Common Stock
d. Inventory, Cash, Accounts Receivable, Short Term Investments - Correct Answer - d
Which components are part of Total Liabilities?
a. Accounts Payable, Accounts Receivable, Short Term Debt
b. Long Term Debt, Common Stock, Retained Earnings
c. Bonds, Accounts Payable, Mortgage
d. Common Stock, Long Term Debt, Short Term Investments - Correct Answer - c
pg. 2
,When Fixed Assets increase what happens to Cash?
a. Cash stays the same
b. Cash increases
c. Cash decreases
d. Assets decrease - Correct Answer - c
Which is the purpose of the statement of cash flows?
a. serves as the replacement for the income statement and balance sheet
b. explains the change in cash balance at one point in time
c. explains the change in cash balance for one period of time
d. both (a) and (b) above - Correct Answer - c
The OIROI (Operating Income Return on Investment) uses what elements on the income statement?
a. Operating Income, EBIT, Total Liabilities
b. EBIT, Total Assets
c. Sales, Total Assets, Equity
d. Net Margin, Total Current Assets - Correct Answer - b
Why would a company be interested in the TAT(Total Asset Turnover) ratio?
a. How efficient assets are at producing income
b. What the turnover of sales is to liabilities
c. How efficient assets are at producing sales
d. How efficient assets are to liabilities and equity - Correct Answer - c
Which of the following gives the largest effective rate (APY)
a. 18.6% compounded monthly
b. 18.6% compounded daily
c. 18.6% compounded weekly
pg. 3
, d. 18.6% compounded yearly - Correct Answer - b
What does the beta coefficient represent?
a. It is a statistically-derived measure of volatility
b. It is the Expected Return minus the Growth Rate
c. It is the volatility of the Risk Free Return
d. It is the expected return for a basket of preferred stocks - Correct Answer - a
Why is depreciation expense taken out of the net income calculation, yet added back at the end?
a. Because fixed assets should remain on the balance sheet
b. Because depreciation is not a current asset
c. Because depreciation is a non-cash liability
d. Because depreciation expense is tax deductible - Correct Answer - d
Why is the NPV preferred over the IRR? Pick Two
a. It has a higher dollar value
b. It measures the dollar value
c. It is more reliable
d. It is harder to calculate - Correct Answer - b, c
What does the Degree of Financial Leverage indicate?
a. The firms cash balance
b. The cost of financed assets
c. The reliance on debt
d. The reliance on assets - Correct Answer - c
If a company has a high degree of financial leverage, what does that tell us about the firm's risk profile?
a. Low Risk
b. Appropriate Risk
pg. 4
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 ASSIGNMENT7. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
