WGU C214 Pre-Assement Questions
And Answers Rated A
How can a private firm appropriately maximize shareholder value? Correct
Answer: By making decisions that keep the control of the business with the
owners
Why are American regulators focused on international investing in a global
marketplace? Correct Answer: Because international investing in a global
marketplace is the concern of
American investors
What is one of the two basic types of financial instruments? Correct Answer:
Bonds
If a company outsources the manufacturing of its products to a foreign country,
what are the likeliest
outcomes? Correct Answer: Consumer prices will decrease and Domestic
employment will decrease.
What is true about the content and structure of a balance sheet? Correct Answer: It
reports the assets, liabilities, and equity at a point in time.
A company reported an increase in accounts receivable of $5,000 during the recent
period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the
operating activities section? Correct Answer: The change will decrease cash flows
from operations by $5,000.
Which statement accurately explains the recognition of revenues and expenses
under accounting income
and income for tax purposes? Correct Answer: Revenues and expenses may be
recognized in one period for accounting income purposes and in a different period
for income tax purposes.
Selected Data for 20x2 for ABD Inc.
, Netincome $ 1,000
Depreciation expense $ 300
Change in operating assets $ 600
Change in net property, plant, and equipment$ 5,000
Changes in long-term liabilities $ 1,000
Dividends paid $ 200
What is the firm's cash flow from investments, using the data above and assuming
no asset disposals? Correct Answer: $5,300 outflow
What is the basic equation for a balance sheet? Correct Answer: Assets =
Liabilities + Equity
What do cash flows from investing activities generally relate to? Correct Answer:
A firm's purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities? Correct
Answer: Cash sales to customers
What does free cash flow represent? Correct Answer: Cash available for
distribution after funding required reinvestment
An analyst is comparing the ratios of two firms and needs to address timing
differences. What would be considered an example of a timing difference between
the two firms? Correct Answer: The firms have different fiscal years.
A company's year-end balance sheetfor 2013 shows the following:
Accounts receivable: $900
Inventory: $1200
Fixed assets: $1000
Accounts payable: $1300
Sales: $4000
Salaries expense: $275
What is their fixed asset turnover ratio? Correct Answer: 4.0
A firm has a ROE (return on equity) of 0.27 and the industry average ROE is 0.24.
Which conclusion would an analyst draw when comparing the firm to the industry?
Correct Answer: The firm is generating higher returns to owners than the industry.
And Answers Rated A
How can a private firm appropriately maximize shareholder value? Correct
Answer: By making decisions that keep the control of the business with the
owners
Why are American regulators focused on international investing in a global
marketplace? Correct Answer: Because international investing in a global
marketplace is the concern of
American investors
What is one of the two basic types of financial instruments? Correct Answer:
Bonds
If a company outsources the manufacturing of its products to a foreign country,
what are the likeliest
outcomes? Correct Answer: Consumer prices will decrease and Domestic
employment will decrease.
What is true about the content and structure of a balance sheet? Correct Answer: It
reports the assets, liabilities, and equity at a point in time.
A company reported an increase in accounts receivable of $5,000 during the recent
period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the
operating activities section? Correct Answer: The change will decrease cash flows
from operations by $5,000.
Which statement accurately explains the recognition of revenues and expenses
under accounting income
and income for tax purposes? Correct Answer: Revenues and expenses may be
recognized in one period for accounting income purposes and in a different period
for income tax purposes.
Selected Data for 20x2 for ABD Inc.
, Netincome $ 1,000
Depreciation expense $ 300
Change in operating assets $ 600
Change in net property, plant, and equipment$ 5,000
Changes in long-term liabilities $ 1,000
Dividends paid $ 200
What is the firm's cash flow from investments, using the data above and assuming
no asset disposals? Correct Answer: $5,300 outflow
What is the basic equation for a balance sheet? Correct Answer: Assets =
Liabilities + Equity
What do cash flows from investing activities generally relate to? Correct Answer:
A firm's purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities? Correct
Answer: Cash sales to customers
What does free cash flow represent? Correct Answer: Cash available for
distribution after funding required reinvestment
An analyst is comparing the ratios of two firms and needs to address timing
differences. What would be considered an example of a timing difference between
the two firms? Correct Answer: The firms have different fiscal years.
A company's year-end balance sheetfor 2013 shows the following:
Accounts receivable: $900
Inventory: $1200
Fixed assets: $1000
Accounts payable: $1300
Sales: $4000
Salaries expense: $275
What is their fixed asset turnover ratio? Correct Answer: 4.0
A firm has a ROE (return on equity) of 0.27 and the industry average ROE is 0.24.
Which conclusion would an analyst draw when comparing the firm to the industry?
Correct Answer: The firm is generating higher returns to owners than the industry.
