WGU C214 OA Pre Assessment Exam 2024 UPDATE
Why are American regulators focused on international investing in a global
marketplace? - ANSWER: Because international investing in a global marketplace is
the concern of American investors
What are the likeliest outcomes if a company outsources the manufacturing of its
products to a foreign country?
Choose 2 answers. - ANSWER: Consumer prices will decrease.
Domestic employment will decrease.
How can a private firm appropriately maximize shareholder value? - ANSWER: By
making decisions that keep the control of the business with the owners
What is one of the two basic types of financial instruments? - ANSWER: Bonds
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? - ANSWER: The change will decrease cash flows from operations
by $5,000.
Selected Data for 20x2 for ABD Inc.Net
Income$ 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 this firm's cash flow from investments, using the data above and assuming
no asset disposals? - ANSWER: $5,300 outflow
What do cash flows from investing activities generally relate to? - ANSWER: A firm's
purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities? - ANSWER: Cash
sales to customers
What does free cash flow represent? - ANSWER: Cash available for distribution after
funding required reinvestment
What do the content and structure of a balance sheet report? - ANSWER: The assets,
liabilities, and equity at a point in time
, Which statement accurately explains the recognition of revenues and expenses
under accounting income and income for tax purposes? - ANSWER: Revenues and
expenses may be recognized in one period for accounting income purposes and in a
different period for income tax purposes.
What is the basic equation for a balance sheet? - ANSWER: Assets = Liabilities +
Equity
An analyst is comparing the ratios of two firms and needs to address timing
differences.
What is an example of a timing difference between these two firms? - ANSWER: The
firms have different fiscal years.
A company's year-end balance sheet for 2013 shows the following:
Accounts Receivable: $900
Inventory: $1,200
Fixed Assets: $1,000
Accounts Payable: $1,300
Sales: $4,000
Salaries Expense: $275
What is its fixed asset turnover ratio? - ANSWER: 4.0
Explanation:
A firm has a ROE (return on equity) of 0.27, and the industry average ROE is 0.24.
Which conclusion should an analyst draw when comparing this firm to the industry?
- ANSWER: The firm is generating higher returns to owners than the industry.
What must have taken place for a firm to recognize revenue, in order for the firm to
comply with the accrual accounting rules? - ANSWER: The product must have been
delivered.
A teacher won $100,000 and invests this money for five years at an interest rate of
4% (compounded annually).
How much will this teacher have in principal and interest at the end of the five
years? - ANSWER: $121,665
An accountant is 40 years old and has an anticipated retirement age of 70 years old.
The accountant plans to save $6,000 per year at the end of the next 30 years to fund
retirement.
Why are American regulators focused on international investing in a global
marketplace? - ANSWER: Because international investing in a global marketplace is
the concern of American investors
What are the likeliest outcomes if a company outsources the manufacturing of its
products to a foreign country?
Choose 2 answers. - ANSWER: Consumer prices will decrease.
Domestic employment will decrease.
How can a private firm appropriately maximize shareholder value? - ANSWER: By
making decisions that keep the control of the business with the owners
What is one of the two basic types of financial instruments? - ANSWER: Bonds
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? - ANSWER: The change will decrease cash flows from operations
by $5,000.
Selected Data for 20x2 for ABD Inc.Net
Income$ 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 this firm's cash flow from investments, using the data above and assuming
no asset disposals? - ANSWER: $5,300 outflow
What do cash flows from investing activities generally relate to? - ANSWER: A firm's
purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities? - ANSWER: Cash
sales to customers
What does free cash flow represent? - ANSWER: Cash available for distribution after
funding required reinvestment
What do the content and structure of a balance sheet report? - ANSWER: The assets,
liabilities, and equity at a point in time
, Which statement accurately explains the recognition of revenues and expenses
under accounting income and income for tax purposes? - ANSWER: Revenues and
expenses may be recognized in one period for accounting income purposes and in a
different period for income tax purposes.
What is the basic equation for a balance sheet? - ANSWER: Assets = Liabilities +
Equity
An analyst is comparing the ratios of two firms and needs to address timing
differences.
What is an example of a timing difference between these two firms? - ANSWER: The
firms have different fiscal years.
A company's year-end balance sheet for 2013 shows the following:
Accounts Receivable: $900
Inventory: $1,200
Fixed Assets: $1,000
Accounts Payable: $1,300
Sales: $4,000
Salaries Expense: $275
What is its fixed asset turnover ratio? - ANSWER: 4.0
Explanation:
A firm has a ROE (return on equity) of 0.27, and the industry average ROE is 0.24.
Which conclusion should an analyst draw when comparing this firm to the industry?
- ANSWER: The firm is generating higher returns to owners than the industry.
What must have taken place for a firm to recognize revenue, in order for the firm to
comply with the accrual accounting rules? - ANSWER: The product must have been
delivered.
A teacher won $100,000 and invests this money for five years at an interest rate of
4% (compounded annually).
How much will this teacher have in principal and interest at the end of the five
years? - ANSWER: $121,665
An accountant is 40 years old and has an anticipated retirement age of 70 years old.
The accountant plans to save $6,000 per year at the end of the next 30 years to fund
retirement.
