WGU C214 FINACIAL MANAGEMENT
CONCEPTS WITH BEST ANSWERS
FINRA (Financial Industry Regulatory Authority)
does the following: (pick one)
a. No foreign bribery by corporations
b. Regulates bond prices
c. Establishes Credit Unions
d. Prosecutes naughty stock brokers
e. Regulates Hedge Funds
d
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
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
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.
b
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
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
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
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
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
c
When Fixed Assets increase what happens to
Cash?
a. Cash stays the same
b. Cash increases
c. Cash decreases
d. Assets decrease
c
Which is the purpose of the statement of cash
flows?
a. serves as the replacement for the income
statement and balance sheet
CONCEPTS WITH BEST ANSWERS
FINRA (Financial Industry Regulatory Authority)
does the following: (pick one)
a. No foreign bribery by corporations
b. Regulates bond prices
c. Establishes Credit Unions
d. Prosecutes naughty stock brokers
e. Regulates Hedge Funds
d
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
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
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.
b
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
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
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
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
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
c
When Fixed Assets increase what happens to
Cash?
a. Cash stays the same
b. Cash increases
c. Cash decreases
d. Assets decrease
c
Which is the purpose of the statement of cash
flows?
a. serves as the replacement for the income
statement and balance sheet
