WGU C708 (v4) - PA Study Guide
Questions and Answers Rated A
The credit manager for a company is responsible for setting the company's credit policy regarding
availability and limits for customers.
What is one of the additional responsibilities of this credit manager? ✔✔Collecting past-due
accounts
Which activity is financial management responsible for? ✔✔Ensuring sufficient financing is
available
What is one of the main areas of the financial environment? ✔✔Investments
What is a common challenge in the world of finance? ✔✔It generally operates with a high degree
of uncertainty.
Which variable must be considered when a corporation's finance department is determining the
best strategy for financing a project? ✔✔The amount of debt and equity financing currently in use
An individual is interested in establishing a lawn care business as a sole proprietorship.
What will be a disadvantage of choosing this business model? ✔✔Unlimited liability
What is one benefit of a sole proprietorship? ✔✔The owner has uninterrupted control of the
business.
What is a disadvantage of a general partnership? ✔✔Owners' personal assets are not protected
against claims of creditors.
, What is one advantage of an LLC? ✔✔Limited personal liability
What is an example of a potential principal-agent problem? ✔✔Corporate executives buying other
companies to expand their influence
An individual decides to sell corporate bonds to another investor.
Which type of financial market or institution would be involved in this transaction? ✔✔Retail
securities firm
A firm wants to sell new shares of stock.
Which other institution is involved in this type of transaction? ✔✔Investment banking firm
A partnership needs funds to purchase technology equipment. It will be able to repay those funds
in under a year's time.
Which organization should the partnership contact to obtain the needed funds? ✔✔Retail bank
Which type of transactions do financial institutions deal with? ✔✔Deposits
What is considered a financial institution? ✔✔Commercial bank
Which situation is unethical? ✔✔The investment manager publishes false investment performance
reports in hopes of convincing new investors to invest money.
Which type of financial statement is used to determine the short-term viability of a company?
✔✔Statement of cash flows
Which are components of an income statement? ✔✔Revenue and expenses
Questions and Answers Rated A
The credit manager for a company is responsible for setting the company's credit policy regarding
availability and limits for customers.
What is one of the additional responsibilities of this credit manager? ✔✔Collecting past-due
accounts
Which activity is financial management responsible for? ✔✔Ensuring sufficient financing is
available
What is one of the main areas of the financial environment? ✔✔Investments
What is a common challenge in the world of finance? ✔✔It generally operates with a high degree
of uncertainty.
Which variable must be considered when a corporation's finance department is determining the
best strategy for financing a project? ✔✔The amount of debt and equity financing currently in use
An individual is interested in establishing a lawn care business as a sole proprietorship.
What will be a disadvantage of choosing this business model? ✔✔Unlimited liability
What is one benefit of a sole proprietorship? ✔✔The owner has uninterrupted control of the
business.
What is a disadvantage of a general partnership? ✔✔Owners' personal assets are not protected
against claims of creditors.
, What is one advantage of an LLC? ✔✔Limited personal liability
What is an example of a potential principal-agent problem? ✔✔Corporate executives buying other
companies to expand their influence
An individual decides to sell corporate bonds to another investor.
Which type of financial market or institution would be involved in this transaction? ✔✔Retail
securities firm
A firm wants to sell new shares of stock.
Which other institution is involved in this type of transaction? ✔✔Investment banking firm
A partnership needs funds to purchase technology equipment. It will be able to repay those funds
in under a year's time.
Which organization should the partnership contact to obtain the needed funds? ✔✔Retail bank
Which type of transactions do financial institutions deal with? ✔✔Deposits
What is considered a financial institution? ✔✔Commercial bank
Which situation is unethical? ✔✔The investment manager publishes false investment performance
reports in hopes of convincing new investors to invest money.
Which type of financial statement is used to determine the short-term viability of a company?
✔✔Statement of cash flows
Which are components of an income statement? ✔✔Revenue and expenses
