WGU C708 Finance v4 Pre-Assessment
Questions and Answers 100% Solved
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
Which statement describes the historical cost principle? ✔✔Most assets are valued at their original
cost when acquired by a company
When do business owners and managers use financial statements? ✔✔When deciding to make or
purchase certain materials
Questions and Answers 100% Solved
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
Which statement describes the historical cost principle? ✔✔Most assets are valued at their original
cost when acquired by a company
When do business owners and managers use financial statements? ✔✔When deciding to make or
purchase certain materials
