Western Governors University C 214
WGU C214 Financial Management Exam Questions &
Answers
D
Trading on the NYSE is executed without a specialist (i.e. a
F market maker). (T/F)
Stocks and bonds are two types o𝑓 𝑓inancial instruments
T (T/F)
The matching principle in accrual accounting requires
a that:
a. Revenues be recognized when the earnings process is
complete and matches expenses to revenues recognized.
b. Expenses are matched to the year in which they
are incurred
c. Revenues are matched to the year in which they
are booked
d. Revenues should be large enough to match expenses
,A basic equation 𝑓or the balance sheet is: a
a. Equity = Assets - Liabilities
b. Liabilities = Equity + Assets
c. Assets = Liabilities - Equity
d.Assets = Equity - Liabilities
Why is the Balance Sheet known as a permanent b
statement?
a. Because the statement is sent to the SEC.
b. Because the other statements are reset at the end
o𝑓 the 𝑓iscal year
c. Because it is printed out and archived
d. Because it persists in the minds o𝑓 the shareholders.
How do you calculate the change in Retained Earnings? d
a. Ending Retained Earnings - Change in Cash
b. EBIT divided by Total Assets + Dividends
c. EBIT - Change in Cash - Dividends
d. Net Income - Dividends
Which o𝑓 the 𝑓ollowing is generally true? c
a.Gross Pro𝑓it and Operating Income are the same
b.Cost o𝑓 Goods Sold + Operating Expenses =
Net Income
c. Operating Income and EBIT are the same
d. EBIT + Income Taxes = Net income
, Which components are part o𝑓 total assets? b
a.Cash, Accounts Receivable, Short Term Debt
b.Cash Accounts Receivable, Inventory, Long Term Assets
c. Accounts Payable, Long Term Assets, Long Term Debt
d.Accounts Payable, Net Income, Equity
Which components are part o𝑓 current assets? d
a.Cash, Accounts Receivable, Property Plant & Equipment
b.Accounts Receivable, Accounts Payable, Inventory
c. Long Term Debt, Property Plant & Equipment, Common
Stock
d. Inventory, Cash, Accounts Receivable, Short Term
Investments
Which components are part o𝑓 Total Liabilities? c
a.Accounts Payable, Accounts Receivable, Short
Term Debt
b. Long Term Debt, Common Stock, Retained Earnings
c. Bonds, Accounts Payable, Mortgage
d. Common Stock, Long Term Debt, Short
Term Investments
WGU C214 Financial Management Exam Questions &
Answers
D
Trading on the NYSE is executed without a specialist (i.e. a
F market maker). (T/F)
Stocks and bonds are two types o𝑓 𝑓inancial instruments
T (T/F)
The matching principle in accrual accounting requires
a that:
a. Revenues be recognized when the earnings process is
complete and matches expenses to revenues recognized.
b. Expenses are matched to the year in which they
are incurred
c. Revenues are matched to the year in which they
are booked
d. Revenues should be large enough to match expenses
,A basic equation 𝑓or the balance sheet is: a
a. Equity = Assets - Liabilities
b. Liabilities = Equity + Assets
c. Assets = Liabilities - Equity
d.Assets = Equity - Liabilities
Why is the Balance Sheet known as a permanent b
statement?
a. Because the statement is sent to the SEC.
b. Because the other statements are reset at the end
o𝑓 the 𝑓iscal year
c. Because it is printed out and archived
d. Because it persists in the minds o𝑓 the shareholders.
How do you calculate the change in Retained Earnings? d
a. Ending Retained Earnings - Change in Cash
b. EBIT divided by Total Assets + Dividends
c. EBIT - Change in Cash - Dividends
d. Net Income - Dividends
Which o𝑓 the 𝑓ollowing is generally true? c
a.Gross Pro𝑓it and Operating Income are the same
b.Cost o𝑓 Goods Sold + Operating Expenses =
Net Income
c. Operating Income and EBIT are the same
d. EBIT + Income Taxes = Net income
, Which components are part o𝑓 total assets? b
a.Cash, Accounts Receivable, Short Term Debt
b.Cash Accounts Receivable, Inventory, Long Term Assets
c. Accounts Payable, Long Term Assets, Long Term Debt
d.Accounts Payable, Net Income, Equity
Which components are part o𝑓 current assets? d
a.Cash, Accounts Receivable, Property Plant & Equipment
b.Accounts Receivable, Accounts Payable, Inventory
c. Long Term Debt, Property Plant & Equipment, Common
Stock
d. Inventory, Cash, Accounts Receivable, Short Term
Investments
Which components are part o𝑓 Total Liabilities? c
a.Accounts Payable, Accounts Receivable, Short
Term Debt
b. Long Term Debt, Common Stock, Retained Earnings
c. Bonds, Accounts Payable, Mortgage
d. Common Stock, Long Term Debt, Short
Term Investments
