WGU C214 OA Financial Management Retake Exam
Latest Questions and Answers ()
(Verified Answers)
Question 1
What does the Foreign Corrupt Practices Act forbid companies to do?
A. Bribe domestic government officials
B. Make payments to foreign government officials to obtain or retain
business
C. Engage in insider trading
D. Export goods without proper licenses
VERIFIED ANSWER B. Make payments to foreign government officials
to obtain or retain business
Rationale: The Foreign Corrupt Practices Act of 1977, as amended, 15
U.S.C. was enacted for the purpose of making it unlawful for certain
classes of persons and entities to make payments to foreign
government officials to assist in obtaining or retaining business.
Question 2
What are two basic types of financial instruments?
A. Mutual funds and ETFs
B. Stocks and bonds
C. Derivatives and futures
D. Options and swaps
VERIFIED ANSWER B. Stocks and bonds
,Rationale: The two basic types of financial instruments are stocks
(equity instruments representing ownership) and bonds (debt
instruments representing loans to corporations or governments).
Question 3
What are secondary markets?
A. Markets where new securities are first issued
B. Markets where investors buy and sell existing securities
C. Markets for government bonds only
D. Markets for foreign currency exchange
VERIFIED ANSWER B. Markets where investors buy and sell existing
securities
Rationale: A secondary market is when you buy and sell stock in the
stock exchange. It is where investors trade securities that have
already been issued in the primary market.
Question 4
What do cash flows from operating activities report?
A. Cash generated from buying and selling long-term assets
B. Cash generated from day-to-day business operations
C. Cash generated from financing activities like issuing stock
D. Cash generated from investing in other companies
VERIFIED ANSWER B. Cash generated from day-to-day business
operations
Rationale: Cash flow from operating activities reports cash generated
from day-to-day business operations. The formula is CFO = Net Income
,+ Depreciation Expense - (Change in Current Assets - Change in
Current Liabilities).
Question 5
What does the statement of cash flows report?
A. The profitability of a company over a period of time
B. The change in cash balance over a period of time
C. The value of a company's assets at a point in time
D. The market value of a company's stock
VERIFIED ANSWER B. The change in cash balance over a period of time
Rationale: The statement of cash flows shows the change in cash
balance over a period of time. It describes how a balance increases or
decreases through the three components: CFO (operating), CFF
(financing), and CFI (investing).
Question 6
Write the equation that links the income statement to the balance
sheet.
A. Assets = Liabilities + Equity
B. Net Income = Revenues - Expenses
C. Ending Retained Earnings = Beginning Retained Earnings + Net
Income - Dividends Paid
D. Cash Flow = Net Income + Depreciation
VERIFIED ANSWER C. Ending Retained Earnings = Beginning Retained
Earnings + Net Income - Dividends Paid
Rationale: The Retained Earnings equation links the income statement
, to the balance sheet. Ending Retained Earnings = Beginning Retained
Earnings + Net Income - Dividends Paid.
Question 7
What is the firm's cash flow from financing activities?
A. Cash generated from day-to-day business operations
B. Cash generated from buying and selling long-term assets
C. Cash that is generated from financing a business
D. Cash generated from sales revenue
VERIFIED ANSWER C. Cash that is generated from financing a business
Rationale: Cash flow from financing activities shows you the cash that
is generated from financing a business. The formula is CFF = Increase
in LT Debt (bonds) + Increase in Stock - Dividends Paid.
Question 8
Describe an income statement.
A. Assets, Liabilities, and Equity
B. Revenues, Expenses, and Income
C. Cash inflows and outflows
D. Changes in retained earnings
VERIFIED ANSWER B. Revenues, Expenses, and Income
Rationale: An income statement reports revenues, expenses, and
income (R.E.I.) over a period of time, showing a company's financial
performance.
Latest Questions and Answers ()
(Verified Answers)
Question 1
What does the Foreign Corrupt Practices Act forbid companies to do?
A. Bribe domestic government officials
B. Make payments to foreign government officials to obtain or retain
business
C. Engage in insider trading
D. Export goods without proper licenses
VERIFIED ANSWER B. Make payments to foreign government officials
to obtain or retain business
Rationale: The Foreign Corrupt Practices Act of 1977, as amended, 15
U.S.C. was enacted for the purpose of making it unlawful for certain
classes of persons and entities to make payments to foreign
government officials to assist in obtaining or retaining business.
Question 2
What are two basic types of financial instruments?
A. Mutual funds and ETFs
B. Stocks and bonds
C. Derivatives and futures
D. Options and swaps
VERIFIED ANSWER B. Stocks and bonds
,Rationale: The two basic types of financial instruments are stocks
(equity instruments representing ownership) and bonds (debt
instruments representing loans to corporations or governments).
Question 3
What are secondary markets?
A. Markets where new securities are first issued
B. Markets where investors buy and sell existing securities
C. Markets for government bonds only
D. Markets for foreign currency exchange
VERIFIED ANSWER B. Markets where investors buy and sell existing
securities
Rationale: A secondary market is when you buy and sell stock in the
stock exchange. It is where investors trade securities that have
already been issued in the primary market.
Question 4
What do cash flows from operating activities report?
A. Cash generated from buying and selling long-term assets
B. Cash generated from day-to-day business operations
C. Cash generated from financing activities like issuing stock
D. Cash generated from investing in other companies
VERIFIED ANSWER B. Cash generated from day-to-day business
operations
Rationale: Cash flow from operating activities reports cash generated
from day-to-day business operations. The formula is CFO = Net Income
,+ Depreciation Expense - (Change in Current Assets - Change in
Current Liabilities).
Question 5
What does the statement of cash flows report?
A. The profitability of a company over a period of time
B. The change in cash balance over a period of time
C. The value of a company's assets at a point in time
D. The market value of a company's stock
VERIFIED ANSWER B. The change in cash balance over a period of time
Rationale: The statement of cash flows shows the change in cash
balance over a period of time. It describes how a balance increases or
decreases through the three components: CFO (operating), CFF
(financing), and CFI (investing).
Question 6
Write the equation that links the income statement to the balance
sheet.
A. Assets = Liabilities + Equity
B. Net Income = Revenues - Expenses
C. Ending Retained Earnings = Beginning Retained Earnings + Net
Income - Dividends Paid
D. Cash Flow = Net Income + Depreciation
VERIFIED ANSWER C. Ending Retained Earnings = Beginning Retained
Earnings + Net Income - Dividends Paid
Rationale: The Retained Earnings equation links the income statement
, to the balance sheet. Ending Retained Earnings = Beginning Retained
Earnings + Net Income - Dividends Paid.
Question 7
What is the firm's cash flow from financing activities?
A. Cash generated from day-to-day business operations
B. Cash generated from buying and selling long-term assets
C. Cash that is generated from financing a business
D. Cash generated from sales revenue
VERIFIED ANSWER C. Cash that is generated from financing a business
Rationale: Cash flow from financing activities shows you the cash that
is generated from financing a business. The formula is CFF = Increase
in LT Debt (bonds) + Increase in Stock - Dividends Paid.
Question 8
Describe an income statement.
A. Assets, Liabilities, and Equity
B. Revenues, Expenses, and Income
C. Cash inflows and outflows
D. Changes in retained earnings
VERIFIED ANSWER B. Revenues, Expenses, and Income
Rationale: An income statement reports revenues, expenses, and
income (R.E.I.) over a period of time, showing a company's financial
performance.
