Exam (elaborations)
WGU C214 Concepts Only Multi Choice Version with 100- correct answers
WGU C214 Concepts Only Multi Choice Version with 100- correct answers
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WGU C214 Concepts Only MultiChoice Version 2025-2026 with
100% correct answers
Trading on the NYSE is executed without a specialist (i.e. a market
maker). (T/F) - answer False
Stocks and bonds are two types of financial instruments (T/F) -
answer True
The matching principle in accrual accounting requires that: - answer
Revenues be recognized when the earnings process is complete and
matches expenses to revenues recognized.
A basic equation for the balance sheet is: - answer Equity = Assets
- Liabilities
Why is the Balance Sheet known as a permanent statement? -
answer Because the other statements are reset at the end of the
fiscal year
How do you calculate the change in Retained Earnings? - answer
Net Income - Dividends
Which of the following is generally true? - answer Operating
Income and EBIT are the same
Which components are part of total assets? - answer Cash
Accounts Receivable, Inventory, Long Term Assets
,Which components are part of current assets? - answer Inventory,
Cash, Accounts Receivable, Short Term Investments
Which components are part of Total Liabilities? - answer Bonds,
Accounts Payable, Mortgage
When Fixed Assets increase what happens to Cash? - answer Cash
decreases
Which is the purpose of the statement of cash flows? - answer
explains the change in cash balance for one period of time
The OIROI (Operating Income Return on Investment) uses what
elements on the income statement? - answer EBIT, Total Assets
Why would a company be interested in the TAT-Total Asset Turnover-
ratio?
a - answer How efficient assets are at producing sales
Which of the following gives the largest effective rate (APY) -
answer 18.6% compounded daily
What does the beta coefficient represent? - answer It is a
statistically-derived measure of volatility
Why is depreciation expense taken out of the net income
calculation, yet added back at the end? - answer Because
depreciation expense is tax deductible
Why is the NPV preferred over the IRR? Pick Two - answer 1-It
measures the dollar value 2- It is harder to calculate
, What does the Degree of Financial Leverage indicate? - answer The
reliance on debt
If a company has a high degree of financial leverage, what does that
tell us about the firm's risk profile? - answer Higher profits to
shareholders
What is the cash cycle? - answer The amount of time to regenerate
cash
Why is float important to understand? - answer To time cash
expenditures
What should a company do to manage its working capital? - answer
Collect quickly and pay slowly
What would be a source of information to determine Replacement
Cost? - answer Building Appraisal
What does the Sarbanes-Oxley Act require companies to do? -
answer Have internal control audits
FINRA (Financial Industry Regulatory Authority) does the following:
(pick one) - answer Prosecutes naughty stock brokers
If a product is made 100% domestically, what can affect its domestic
market? - answer International competition
If a company makes its product in a foreign country where labor
costs are much lower, what happens? - answer Profits go up and
domestic employment decreases.
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