WGU C214 Pre-Assement Questions and
Answers with Verified Solutions
How can a private firm appropriately maximize shareholder value? ✔✔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?
✔✔Because international investing in a global marketplace is the concern of
American investors
What is one of the two basic types of financial instruments? ✔✔Bonds
If a company outsources the manufacturing of its products to a foreign country, what are the
likeliest
outcomes? ✔✔Consumer prices will decrease and Domestic employment will decrease.
What is true about the content and structure of a balance sheet? ✔✔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? ✔✔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? ✔✔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? ✔✔$5,300 outflow
What is the basic equation for a balance sheet? ✔✔Assets = Liabilities + Equity
What do cash flows from investing activities generally relate to? ✔✔A firm's purchase and sale
of long-term assets
Which transaction is reflected in cash flow from operating activities? ✔✔Cash sales to
customers
What does free cash flow represent? ✔✔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? ✔✔The firms
have different fiscal years.
Answers with Verified Solutions
How can a private firm appropriately maximize shareholder value? ✔✔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?
✔✔Because international investing in a global marketplace is the concern of
American investors
What is one of the two basic types of financial instruments? ✔✔Bonds
If a company outsources the manufacturing of its products to a foreign country, what are the
likeliest
outcomes? ✔✔Consumer prices will decrease and Domestic employment will decrease.
What is true about the content and structure of a balance sheet? ✔✔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? ✔✔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? ✔✔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? ✔✔$5,300 outflow
What is the basic equation for a balance sheet? ✔✔Assets = Liabilities + Equity
What do cash flows from investing activities generally relate to? ✔✔A firm's purchase and sale
of long-term assets
Which transaction is reflected in cash flow from operating activities? ✔✔Cash sales to
customers
What does free cash flow represent? ✔✔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? ✔✔The firms
have different fiscal years.
