WGU C214 CONCEPTS ONLY MULTI
CHOICE VERSION OBJECTIVE
ASSESSMENT WITH COMPLETE
EXAM QUESTIONS AND CORRECT
SOLUTIONS||A+ GRADED||100%
GUARANTEED PASS||UPDATED
2026/2027 SYLLABUS||
What do investors, entrepreneurs and other market participants rely on the SEC to
do?
A. Determine safety and efficiency of investment by US and foreign investors
B. Regulate the Money Supply
C. Prohibit foreign bribery
D. Require Private Firms to Register - ANSWER ✓ a
What is one way a firm maximizes shareholder value?
A. By switching inventory methods
B. By reducing the firm's labor force
C. By outsourcing the production of the firm's core product
D. By avoiding investments that cost more money than they bring in - ANSWER
✓d
What is one of the two basic types of financial instruments?
A. Money Markets
B. Mutual Funds
C. Stocks
D. Options - ANSWER ✓ c
The stock price of a company increases and the market is deemed efficient. What
assumption can be made?
A. A new, patented, product was introduced to the market.
,B. New machinery was purchased with a useful life of 20 years.
C. Management is optimizing its resources and operating efficiently.
D. Management hired new employees and invested in a training program. -
ANSWER ✓ a
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 firms risk profile? - ANSWER ✓ Financial leverage also means that more
financing is done through debt, not equity. 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
Name what characterizes increased collection float? - ANSWER ✓ Increased
float indicates slower processing time.
In regards to Accounts Payable Balances, what is a good policy? - ANSWER ✓
Paying off A/P on the last day due is a good policy.
What would be a good source of information to determine replacement cost? -
ANSWER ✓ Building Appraisal
Dodd-Frank Act regulates which segment of the U.S economy? - ANSWER ✓
Banking industry
What is the regulatory body that overseas the systematic risk in banking? -
ANSWER ✓ Financial stability oversight council
, The SEC securities and Exchange Commission requires companies to do the
following three things: - ANSWER ✓ Register all public offerings, regulate stock
sales and ensure transparency through uniform reporting.
What does the Sarbanes-Oxley Act require companies to do? - ANSWER ✓ Have
internal control audits, senior management responsible for signing off on
statements and places restrictions on auditors.
Financial Industry Regulatory Authority (FINRA) does the following? -
ANSWER ✓ Licenses stock brokers and audits brokerage firms.
If a product is made 100% domestically, what can affect its domestic market? -
ANSWER ✓ International competition
If a company makes a product in a foreign country where labor costs are much
lower, what happens? - ANSWER ✓ Profits go up and domestic employment
decreases.
If the value of a dollar increases, the price of imports does what? - ANSWER ✓
Decreases
Why would a farmer buy a hedge when he signs a contract to sell products
oversees? - ANSWER ✓ To reduce currency risk
The goal of a corporation is to? - ANSWER ✓ Minimize risk
Which of the following is not a requirement for an efficient market? - ANSWER
✓ Liquidity
The value of money depends upon? - ANSWER ✓ The timing of receipts,
certainty of receipt and riskiness of receipt.
What is the purpose of the SEC 10-K filing? - ANSWER ✓ Prevent monopolies
Which line item is not part of net working capital? - ANSWER ✓ Bonds
Increase in accounts payable, decrease in accounts payable and increase in
inventory are examples of cash flow. True/False - ANSWER ✓ False
, Net margin is defined as? - ANSWER ✓ Retained earnings / sales
Which item is transferred from the income statement to the balance sheet? -
ANSWER ✓ Depreciation expense and addition to retained earnings
What item is added to net income to calculate net cash flow? - ANSWER ✓
Depreciation expense
Which cash flow statement represents cash earned by producing and selling the
product? - ANSWER ✓ Cash flow operations
Which ratio reflects a firms reliance on debt financing? - ANSWER ✓ Financial
leverage
Which action causes a cash outflow? - ANSWER ✓ Increase in inventory
If two firm use different money valuation methods, it is called? - ANSWER ✓
Accounting Difference
What thee things affect the required return on a security? - ANSWER ✓
Perceived riskiness
Financial decisions of the firm
Trading in financial markets
Which is the most frequent type of transaction in financial markets? - ANSWER
✓ Secondary markets
Which of the 5 white financial function keys represents a series of cash
disbursements? - ANSWER ✓ PMT
If payments are made semi-annually, which key inputs must be adjusted? -
ANSWER ✓ PMT, I/Y and N
Which can be defined as change in value of cash over time? - ANSWER ✓
Interest rate, inflation rate, and discount rate
CHOICE VERSION OBJECTIVE
ASSESSMENT WITH COMPLETE
EXAM QUESTIONS AND CORRECT
SOLUTIONS||A+ GRADED||100%
GUARANTEED PASS||UPDATED
2026/2027 SYLLABUS||
What do investors, entrepreneurs and other market participants rely on the SEC to
do?
A. Determine safety and efficiency of investment by US and foreign investors
B. Regulate the Money Supply
C. Prohibit foreign bribery
D. Require Private Firms to Register - ANSWER ✓ a
What is one way a firm maximizes shareholder value?
A. By switching inventory methods
B. By reducing the firm's labor force
C. By outsourcing the production of the firm's core product
D. By avoiding investments that cost more money than they bring in - ANSWER
✓d
What is one of the two basic types of financial instruments?
A. Money Markets
B. Mutual Funds
C. Stocks
D. Options - ANSWER ✓ c
The stock price of a company increases and the market is deemed efficient. What
assumption can be made?
A. A new, patented, product was introduced to the market.
,B. New machinery was purchased with a useful life of 20 years.
C. Management is optimizing its resources and operating efficiently.
D. Management hired new employees and invested in a training program. -
ANSWER ✓ a
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 firms risk profile? - ANSWER ✓ Financial leverage also means that more
financing is done through debt, not equity. 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
Name what characterizes increased collection float? - ANSWER ✓ Increased
float indicates slower processing time.
In regards to Accounts Payable Balances, what is a good policy? - ANSWER ✓
Paying off A/P on the last day due is a good policy.
What would be a good source of information to determine replacement cost? -
ANSWER ✓ Building Appraisal
Dodd-Frank Act regulates which segment of the U.S economy? - ANSWER ✓
Banking industry
What is the regulatory body that overseas the systematic risk in banking? -
ANSWER ✓ Financial stability oversight council
, The SEC securities and Exchange Commission requires companies to do the
following three things: - ANSWER ✓ Register all public offerings, regulate stock
sales and ensure transparency through uniform reporting.
What does the Sarbanes-Oxley Act require companies to do? - ANSWER ✓ Have
internal control audits, senior management responsible for signing off on
statements and places restrictions on auditors.
Financial Industry Regulatory Authority (FINRA) does the following? -
ANSWER ✓ Licenses stock brokers and audits brokerage firms.
If a product is made 100% domestically, what can affect its domestic market? -
ANSWER ✓ International competition
If a company makes a product in a foreign country where labor costs are much
lower, what happens? - ANSWER ✓ Profits go up and domestic employment
decreases.
If the value of a dollar increases, the price of imports does what? - ANSWER ✓
Decreases
Why would a farmer buy a hedge when he signs a contract to sell products
oversees? - ANSWER ✓ To reduce currency risk
The goal of a corporation is to? - ANSWER ✓ Minimize risk
Which of the following is not a requirement for an efficient market? - ANSWER
✓ Liquidity
The value of money depends upon? - ANSWER ✓ The timing of receipts,
certainty of receipt and riskiness of receipt.
What is the purpose of the SEC 10-K filing? - ANSWER ✓ Prevent monopolies
Which line item is not part of net working capital? - ANSWER ✓ Bonds
Increase in accounts payable, decrease in accounts payable and increase in
inventory are examples of cash flow. True/False - ANSWER ✓ False
, Net margin is defined as? - ANSWER ✓ Retained earnings / sales
Which item is transferred from the income statement to the balance sheet? -
ANSWER ✓ Depreciation expense and addition to retained earnings
What item is added to net income to calculate net cash flow? - ANSWER ✓
Depreciation expense
Which cash flow statement represents cash earned by producing and selling the
product? - ANSWER ✓ Cash flow operations
Which ratio reflects a firms reliance on debt financing? - ANSWER ✓ Financial
leverage
Which action causes a cash outflow? - ANSWER ✓ Increase in inventory
If two firm use different money valuation methods, it is called? - ANSWER ✓
Accounting Difference
What thee things affect the required return on a security? - ANSWER ✓
Perceived riskiness
Financial decisions of the firm
Trading in financial markets
Which is the most frequent type of transaction in financial markets? - ANSWER
✓ Secondary markets
Which of the 5 white financial function keys represents a series of cash
disbursements? - ANSWER ✓ PMT
If payments are made semi-annually, which key inputs must be adjusted? -
ANSWER ✓ PMT, I/Y and N
Which can be defined as change in value of cash over time? - ANSWER ✓
Interest rate, inflation rate, and discount rate
