WGU C214 OA FINANCIAL MANAGEMENT RETAKE
EXAM 2024 -2025/ACTUAL EXAM WITH CORRECT
DETAILED SOLUTIONS AND
ELABORATIONS/VERIFIED/A+ GRADE
1. What does the Foreign Corrupt Practices Act forbid U.S. companies to do
Prohibits U.S. firms and individuals from paying bribes to foreign officials to
further business deals.
2. What are two basic types of financial
instruments Stocks and Bonds
3. What are secondary markets
Secondary financial markets are where securities are traded after the initial
offering.
4. What do cash flows from operating activities report
Operating - day to day operations Investing - Property, plant, equipment, long
term items Financing - debt and equity changes
5. What does the statement of cash flows report
Cash inflow and cash outflow of business for period of time
6. Write the equation that links the income statement to the balance
sheet New Re= Old RE + Net Income - dividends
7. Net income 2,000 Depreciation 500 Change in operating assets 400 Change
in PPE 1,000 Change on long term liabilit ies 600 Dividends paid 100 What is the
firm's cash flow from financing activities
1 / 3
Increase in debt 600 + (no change in stock) 0 - (dividends paid) 100 = 500
2 / 3
8. Describe an income statement
An income statement is a financial statement that shows you how profitable
your business was over a given reporting period. It shows your revenue, minus
your expenses and losses
9. What item is included in the income statement and not included in the
statement of cash flows
Depreciation
10. A company sold goods in 2016 for $30,000 and collected the cash in 2017. In
2016, the company incurred and paid $20,000 in expenses related to the goods
sold. How much income should the company report in 2016 under the accrual
basis of accounting
30,000 -20,000= $10,000
11. EBIT: $1,000,000 Depreciation: $30,000 Change in working capital($5,000)
Net capital expenditures: $10,000 Tax rate: 40% What is the company's free
cash flow
1,000,000*(1 -.40) + 30,000) - (-5,000) - 10,000 = 625,000
12. Define Free Cash Flow
Represents the cash available for the company to repay creditors or pay
dividends and interest to investor
13. A company reported an increase in accounts payable of $4,000 during the
recent period. Half of this amount is expected to be paid next period. What is
the impact on the cash flow from operating activities
increase of $4000 Powered by TCPDF (www.tcpdf.org)
3 / 3
EXAM 2024 -2025/ACTUAL EXAM WITH CORRECT
DETAILED SOLUTIONS AND
ELABORATIONS/VERIFIED/A+ GRADE
1. What does the Foreign Corrupt Practices Act forbid U.S. companies to do
Prohibits U.S. firms and individuals from paying bribes to foreign officials to
further business deals.
2. What are two basic types of financial
instruments Stocks and Bonds
3. What are secondary markets
Secondary financial markets are where securities are traded after the initial
offering.
4. What do cash flows from operating activities report
Operating - day to day operations Investing - Property, plant, equipment, long
term items Financing - debt and equity changes
5. What does the statement of cash flows report
Cash inflow and cash outflow of business for period of time
6. Write the equation that links the income statement to the balance
sheet New Re= Old RE + Net Income - dividends
7. Net income 2,000 Depreciation 500 Change in operating assets 400 Change
in PPE 1,000 Change on long term liabilit ies 600 Dividends paid 100 What is the
firm's cash flow from financing activities
1 / 3
Increase in debt 600 + (no change in stock) 0 - (dividends paid) 100 = 500
2 / 3
8. Describe an income statement
An income statement is a financial statement that shows you how profitable
your business was over a given reporting period. It shows your revenue, minus
your expenses and losses
9. What item is included in the income statement and not included in the
statement of cash flows
Depreciation
10. A company sold goods in 2016 for $30,000 and collected the cash in 2017. In
2016, the company incurred and paid $20,000 in expenses related to the goods
sold. How much income should the company report in 2016 under the accrual
basis of accounting
30,000 -20,000= $10,000
11. EBIT: $1,000,000 Depreciation: $30,000 Change in working capital($5,000)
Net capital expenditures: $10,000 Tax rate: 40% What is the company's free
cash flow
1,000,000*(1 -.40) + 30,000) - (-5,000) - 10,000 = 625,000
12. Define Free Cash Flow
Represents the cash available for the company to repay creditors or pay
dividends and interest to investor
13. A company reported an increase in accounts payable of $4,000 during the
recent period. Half of this amount is expected to be paid next period. What is
the impact on the cash flow from operating activities
increase of $4000 Powered by TCPDF (www.tcpdf.org)
3 / 3
