WGU C214 Concepts Only Multi Choice Version
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WGU C214 Concepts With Multi Choice Version
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A+.
1. Stocks and bonds are two types of financial instru- T
ments (T/F)
2. The matching principle in accrual accounting re- a
quires that:
a. Revenues be recognized when the earnings
process is complete and matches expenses to rev-
enues 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 ex-
penses
3. 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
4. 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 sharehold-
ers.
5. How do you calculate the change in Retained Earn- d
ings?
a. Ending Retained Earnings - Change in Cash
, WGU C214 Concepts Only Multi Choice Version
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b. EBIT divided by Total Assets + Dividends
c. EBIT - Change in Cash - Dividends
d. Net Income - Dividends
, WGU C214 Concepts Only Multi Choice Version
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6. 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
7. 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
8. 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, Com-
mon Stock
d. Inventory, Cash, Accounts Receivable, Short Term
Investments
9. Which components are part of Total Liabilities? c
a. Accounts Payable, Accounts Receivable, Short
Term Debt
b. Long Term Debt, Common Stock, Retained Earn-
ings
c. Bonds, Accounts Payable, Mortgage
d. Common Stock, Long Term Debt, Short Term In-
vestments
10. When Fixed Assets increase what happens to Cash? c
a. Cash stays the same
b. Cash increases
c. Cash decreases
d. Assets decrease
11. c
, WGU C214 Concepts Only Multi Choice Version
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Which is the purpose of the statement of cash flows?
a. serves as the replacement for the income state-
ment and balance sheet
b. explains the change in cash balance at one point
in time
c. explains the change in cash balance for one period
of time
d. both (a) and (b) above
12. The OIROI (Operating Income Return on Investment) b
uses what elements on the income statement?
a. Operating Income, EBIT, Total Liabilities
b. EBIT, Total Assets
c. Sales, Total Assets, Equity
d. Net Margin, Total Current Assets
13. Why would a company be interested in the TAT(Total c
Asset Turnover) ratio?
a. How efficient assets are at producing income
b. What the turnover of sales is to liabilities
c. How efficient assets are at producing sales
d. How efficient assets are to liabilities and equity
14. Which of the following gives the largest effective rate b
(APY)
a. 18.6% compounded monthly
b. 18.6% compounded daily
c. 18.6% compounded weekly
d. 18.6% compounded yearly
15. What does the beta coefficient represent? a
a. It is a statistically-derived measure of volatility
b. It is the Expected Return minus the Growth Rate
c. It is the volatility of the Risk Free Return
d. It is the expected return for a basket of preferred
stocks
16. Why is depreciation expense taken out of the net d
income calculation, yet added back at the end?
a. Because fixed assets should remain on the balance
Study online at https://quizlet.com/_52uiwj
WGU C214 Concepts With Multi Choice Version
(Latest 2022/2023) Already Verified Answers,Sure
A+.
1. Stocks and bonds are two types of financial instru- T
ments (T/F)
2. The matching principle in accrual accounting re- a
quires that:
a. Revenues be recognized when the earnings
process is complete and matches expenses to rev-
enues 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 ex-
penses
3. 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
4. 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 sharehold-
ers.
5. How do you calculate the change in Retained Earn- d
ings?
a. Ending Retained Earnings - Change in Cash
, WGU C214 Concepts Only Multi Choice Version
Study online at https://quizlet.com/_52uiwj
b. EBIT divided by Total Assets + Dividends
c. EBIT - Change in Cash - Dividends
d. Net Income - Dividends
, WGU C214 Concepts Only Multi Choice Version
Study online at https://quizlet.com/_52uiwj
6. 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
7. 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
8. 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, Com-
mon Stock
d. Inventory, Cash, Accounts Receivable, Short Term
Investments
9. Which components are part of Total Liabilities? c
a. Accounts Payable, Accounts Receivable, Short
Term Debt
b. Long Term Debt, Common Stock, Retained Earn-
ings
c. Bonds, Accounts Payable, Mortgage
d. Common Stock, Long Term Debt, Short Term In-
vestments
10. When Fixed Assets increase what happens to Cash? c
a. Cash stays the same
b. Cash increases
c. Cash decreases
d. Assets decrease
11. c
, WGU C214 Concepts Only Multi Choice Version
Study online at https://quizlet.com/_52uiwj
Which is the purpose of the statement of cash flows?
a. serves as the replacement for the income state-
ment and balance sheet
b. explains the change in cash balance at one point
in time
c. explains the change in cash balance for one period
of time
d. both (a) and (b) above
12. The OIROI (Operating Income Return on Investment) b
uses what elements on the income statement?
a. Operating Income, EBIT, Total Liabilities
b. EBIT, Total Assets
c. Sales, Total Assets, Equity
d. Net Margin, Total Current Assets
13. Why would a company be interested in the TAT(Total c
Asset Turnover) ratio?
a. How efficient assets are at producing income
b. What the turnover of sales is to liabilities
c. How efficient assets are at producing sales
d. How efficient assets are to liabilities and equity
14. Which of the following gives the largest effective rate b
(APY)
a. 18.6% compounded monthly
b. 18.6% compounded daily
c. 18.6% compounded weekly
d. 18.6% compounded yearly
15. What does the beta coefficient represent? a
a. It is a statistically-derived measure of volatility
b. It is the Expected Return minus the Growth Rate
c. It is the volatility of the Risk Free Return
d. It is the expected return for a basket of preferred
stocks
16. Why is depreciation expense taken out of the net d
income calculation, yet added back at the end?
a. Because fixed assets should remain on the balance
