WGU C201 ACCOUNTING FOR
BUSINESS AND MANAGEMENT
PRACTICE TEST QUESTIONS AND
COMPLETE SOLUTIONS 100%
CORRECT!!!
The Strategic Role of a Financial Manager
Question: What is a primary responsibility of a financial manager within an
organization?
Answer: Analyzing major investment decisions. Financial managers evaluate
potential projects or acquisitions to determine their long-term profitability and
risk, ensuring that the company’s capital is deployed where it will generate the
highest return. ✔✔
Finance vs. Accounting
Question: Which activities are specifically categorized as finance functions
rather than accounting tasks?
Answer: Making capital market investments and creating a financial plan.
While accounting focuses on recording and reporting past financial transactions,
finance is forward-looking—focusing on wealth maximization and determining
how to fund future growth. ✔✔
Securing Long-Term Funding
Question: When an organization requires long-term capital to expand, which
three sources should be considered?
Answer: Venture capital, the public sale of stocks (Equity), and Hedge
funds. These sources provide the significant, long-term capital necessary for
major expansions or restructuring, unlike short-term credit lines used for daily
operations. ✔✔
, Managing Excess Cash and Tax Liabilities
Question: Where should a business invest excess cash that is specifically
earmarked for paying an upcoming tax liability within the same year?
Answer: Commercial paper. This is a short-term, unsecured promissory note
issued by companies. It is an ideal "parking spot" for cash because it is highly
liquid and carries a fixed maturity date that can be aligned with tax deadlines.
✔✔
The Role of the Underwriter in Capital Markets
Question: When a company sells securities (like stocks or bonds) to the public,
what is the specific role of the underwriter?
Answer: The underwriter assumes the risk of the assessed value of the
security from the issuer. Essentially, the underwriting firm buys the securities
from the company at a set price and then resells them to the public, guaranteeing
that the company receives the necessary funding regardless of market
fluctuations during the sale. ✔✔
Why should a manager use financial controls in a firm’s financial plan?
To determine the accuracy of forecasted revenues, costs, and expenses
3 multiple choice options
What does a CFO use in financial planning to determine the expected level of
revenue for future periods?
Sales forecast plus non-sales revenue
3 multiple choice options
BUSINESS AND MANAGEMENT
PRACTICE TEST QUESTIONS AND
COMPLETE SOLUTIONS 100%
CORRECT!!!
The Strategic Role of a Financial Manager
Question: What is a primary responsibility of a financial manager within an
organization?
Answer: Analyzing major investment decisions. Financial managers evaluate
potential projects or acquisitions to determine their long-term profitability and
risk, ensuring that the company’s capital is deployed where it will generate the
highest return. ✔✔
Finance vs. Accounting
Question: Which activities are specifically categorized as finance functions
rather than accounting tasks?
Answer: Making capital market investments and creating a financial plan.
While accounting focuses on recording and reporting past financial transactions,
finance is forward-looking—focusing on wealth maximization and determining
how to fund future growth. ✔✔
Securing Long-Term Funding
Question: When an organization requires long-term capital to expand, which
three sources should be considered?
Answer: Venture capital, the public sale of stocks (Equity), and Hedge
funds. These sources provide the significant, long-term capital necessary for
major expansions or restructuring, unlike short-term credit lines used for daily
operations. ✔✔
, Managing Excess Cash and Tax Liabilities
Question: Where should a business invest excess cash that is specifically
earmarked for paying an upcoming tax liability within the same year?
Answer: Commercial paper. This is a short-term, unsecured promissory note
issued by companies. It is an ideal "parking spot" for cash because it is highly
liquid and carries a fixed maturity date that can be aligned with tax deadlines.
✔✔
The Role of the Underwriter in Capital Markets
Question: When a company sells securities (like stocks or bonds) to the public,
what is the specific role of the underwriter?
Answer: The underwriter assumes the risk of the assessed value of the
security from the issuer. Essentially, the underwriting firm buys the securities
from the company at a set price and then resells them to the public, guaranteeing
that the company receives the necessary funding regardless of market
fluctuations during the sale. ✔✔
Why should a manager use financial controls in a firm’s financial plan?
To determine the accuracy of forecasted revenues, costs, and expenses
3 multiple choice options
What does a CFO use in financial planning to determine the expected level of
revenue for future periods?
Sales forecast plus non-sales revenue
3 multiple choice options
