WGU C214 Quick Study for PA/OA (2025) Question and
answers rated A+
What is a potential negative consequence if a firm Unethical
behavior/scandals
focuses only on profit maximization
1. How does a private company differ from a public Private companies are
not publicly
company traded and keep business within
their "family"
2. Why would a country devalue their currency To make their exports cheaper
3. What are the two types of secondary Auction market
financial markets Dealer market
4. What is an auction market (of the Auction sells to highest bidder
secondary fi- nancial market)
Physical location
e.g. NYSE
5. What is a dealer market (of the secondary
Multiple dealers holding an
finan- cial market)
inven- tory of securities and quote
prices Virtual, does not require
physical location
e.g. NASDAQ
6. True or False: Efficient and well-developed
finan- cial markets enable more reliable True
stock prices
7. Explain why a company would have a net income The retained earnings
were paid
of 100k but retained earnings only increased 20k out as dividends to
shareholders
8. What is retained earnings on the balance sheet Accumulated earnings not
paid
out as dividends, they have been
1/
17
, plowed back (retained)
9. True or False: Retained earnings can be False. It is not cash on the
used to pay company bills books and cannot be used
to pay bills.
2/
17
, WGU C214 Quick Study for PA/OA
(2025)
It is a non-cash expense
10. Why is depreciation added back to net
income when calculating CFO
11. What are operating accounts in the balance sheet Increase or decrease
in operating
asset accounts
e.g. accounts receivable and in-
ventory
Increase of decrease in
operating liability accounts
e.g. accounts payable and accrued
wages
12. What happens with CFO when assets Cash outflow
increase, cash
13. What happens with CFO when liabilities increase, Cash inflow
cash
14. What does a statement of cash flow show Cash flows from operating,
an in- vestor? invest- ing, and financing
activities
15. What does it mean if a company has a CFO
of
The company relied on external
$100, CFI of $50, CFF of $300
fi- nancing
16. What is the CFO indirect method? The indirect method is a "bot-
tom-up" approach where we
start with net income and
adjust for dif- ferences
between net income and CFO
3/
17
answers rated A+
What is a potential negative consequence if a firm Unethical
behavior/scandals
focuses only on profit maximization
1. How does a private company differ from a public Private companies are
not publicly
company traded and keep business within
their "family"
2. Why would a country devalue their currency To make their exports cheaper
3. What are the two types of secondary Auction market
financial markets Dealer market
4. What is an auction market (of the Auction sells to highest bidder
secondary fi- nancial market)
Physical location
e.g. NYSE
5. What is a dealer market (of the secondary
Multiple dealers holding an
finan- cial market)
inven- tory of securities and quote
prices Virtual, does not require
physical location
e.g. NASDAQ
6. True or False: Efficient and well-developed
finan- cial markets enable more reliable True
stock prices
7. Explain why a company would have a net income The retained earnings
were paid
of 100k but retained earnings only increased 20k out as dividends to
shareholders
8. What is retained earnings on the balance sheet Accumulated earnings not
paid
out as dividends, they have been
1/
17
, plowed back (retained)
9. True or False: Retained earnings can be False. It is not cash on the
used to pay company bills books and cannot be used
to pay bills.
2/
17
, WGU C214 Quick Study for PA/OA
(2025)
It is a non-cash expense
10. Why is depreciation added back to net
income when calculating CFO
11. What are operating accounts in the balance sheet Increase or decrease
in operating
asset accounts
e.g. accounts receivable and in-
ventory
Increase of decrease in
operating liability accounts
e.g. accounts payable and accrued
wages
12. What happens with CFO when assets Cash outflow
increase, cash
13. What happens with CFO when liabilities increase, Cash inflow
cash
14. What does a statement of cash flow show Cash flows from operating,
an in- vestor? invest- ing, and financing
activities
15. What does it mean if a company has a CFO
of
The company relied on external
$100, CFI of $50, CFF of $300
fi- nancing
16. What is the CFO indirect method? The indirect method is a "bot-
tom-up" approach where we
start with net income and
adjust for dif- ferences
between net income and CFO
3/
17
