WGU C214 FINANCIAL MGMT PASS THE OA 2026 ACTUAL
QUESTIONS AND ANSWERS GRADED A+ ASSURED PASS
The increase in yield (rate) causes
The bond prices to decrease (and vice-versa)
NOTE: when interest rates increase, bond prices decrease
A working capital increase caused by an increase in inventory
will be
A cash outflow
NOTE: capital increase is inventory purchased so money goes
out
A firm can sustain negative CFO indefinitely by borrowing,
selling equity, and/or by selling assets
FALSE
NOTE: a firm can NOT sustain negative CFO forever
Which should NOT be included in the calculation of CFF
A change in retained earnings
,Dividing CFO among the owners of a firm is a sustainable
policy
FALSE
NOTE: CFO doesn't allow for required reinvestment
Dividing CFO among owners of a firm is NOT a sustainable
policy
TRUE
NOTE: CFO doesn't allow for required reinvestment
A firm reports the following cash flow data CFO 1 million, CFI
750K, and CFF -100K. Is the firm sustainable
Yes, the firm is sustainable. CFF may be due to paying down
debt, buying back stock, or paying dividends
When calculating CFO, an increase in an operating liability
such as A/P or accrued wages represents
An inflow to the firm
, NOTE: if the firm owes to suppliers, more inventory is
purchased and on hand (inflow)
NOTE: Operating liability accounts are:
Increases: an inflow of cash
Decreases: an outflow of cash
CFO can be dramatically impacted by managerial discretion in
the financial reporting process
TRUE
NOTE: management has discretion which is why financial
statements can be misleading
Management of cash flow from operations
Is dramatically impacted by managerial decisions
The impact of accrual accounting is seen as
MOST useful in relation to net income
QUESTIONS AND ANSWERS GRADED A+ ASSURED PASS
The increase in yield (rate) causes
The bond prices to decrease (and vice-versa)
NOTE: when interest rates increase, bond prices decrease
A working capital increase caused by an increase in inventory
will be
A cash outflow
NOTE: capital increase is inventory purchased so money goes
out
A firm can sustain negative CFO indefinitely by borrowing,
selling equity, and/or by selling assets
FALSE
NOTE: a firm can NOT sustain negative CFO forever
Which should NOT be included in the calculation of CFF
A change in retained earnings
,Dividing CFO among the owners of a firm is a sustainable
policy
FALSE
NOTE: CFO doesn't allow for required reinvestment
Dividing CFO among owners of a firm is NOT a sustainable
policy
TRUE
NOTE: CFO doesn't allow for required reinvestment
A firm reports the following cash flow data CFO 1 million, CFI
750K, and CFF -100K. Is the firm sustainable
Yes, the firm is sustainable. CFF may be due to paying down
debt, buying back stock, or paying dividends
When calculating CFO, an increase in an operating liability
such as A/P or accrued wages represents
An inflow to the firm
, NOTE: if the firm owes to suppliers, more inventory is
purchased and on hand (inflow)
NOTE: Operating liability accounts are:
Increases: an inflow of cash
Decreases: an outflow of cash
CFO can be dramatically impacted by managerial discretion in
the financial reporting process
TRUE
NOTE: management has discretion which is why financial
statements can be misleading
Management of cash flow from operations
Is dramatically impacted by managerial decisions
The impact of accrual accounting is seen as
MOST useful in relation to net income
