WGU C214 Practice OA Exam 88 Questions with
Verified Answers
By making decisions that keep the control of the business with the owners. -
CORRECT ANSWER How can a private firm appropriately maximize shareholder
value?
Because international investing in a global marketplace is the concern of American
investors. - CORRECT ANSWER Why are American regulators focused on
international investing in a global marketplace?
Bonds - CORRECT ANSWER What is one of the two basic types of financial
instruments?
Consumer prices will decrease and Domestic employment will decrease. -
CORRECT ANSWER What are the likeliest outcomes if a company outsources the
manufacturing of its products to a foreign country?
The assets, liabilities, and equity at a point in time - CORRECT ANSWER What do
the content and structure of a balance sheet report?
The change will decrease cash flows from operations by $5,000. - CORRECT
ANSWER 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?
,Revenues and expenses may be recognized in one period for accounting income
purposes and in a different period for income tax purposes. - CORRECT ANSWER
Which statement accurately explains the recognition of revenues and expenses
under accounting income and income for tax purposes?
$5,300 outflow - CORRECT ANSWER 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?
Assets = Liabilities + Equity - CORRECT ANSWER What is the basic equation for a
balance sheet?
A firm's purchase and sale of long-term assets - CORRECT ANSWER What do cash
flows from investing activities generally relate to?
Cash sales to customers - CORRECT ANSWER Which transaction is reflected in cash
flow from operating activities?
Cash available for distribution after funding required reinvestment - CORRECT
ANSWER What does free cash flow represent?
, The firms have different fiscal years. - CORRECT ANSWER 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?
4 - CORRECT ANSWER 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?
The firm is generating higher returns to owners than the industry. - CORRECT
ANSWER 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?
The product must have been delivered. - CORRECT ANSWER What must have
taken place for a firm to recognize revenue, in order for the firm to comply with
the accrual accounting rules?
Verified Answers
By making decisions that keep the control of the business with the owners. -
CORRECT ANSWER How can a private firm appropriately maximize shareholder
value?
Because international investing in a global marketplace is the concern of American
investors. - CORRECT ANSWER Why are American regulators focused on
international investing in a global marketplace?
Bonds - CORRECT ANSWER What is one of the two basic types of financial
instruments?
Consumer prices will decrease and Domestic employment will decrease. -
CORRECT ANSWER What are the likeliest outcomes if a company outsources the
manufacturing of its products to a foreign country?
The assets, liabilities, and equity at a point in time - CORRECT ANSWER What do
the content and structure of a balance sheet report?
The change will decrease cash flows from operations by $5,000. - CORRECT
ANSWER 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?
,Revenues and expenses may be recognized in one period for accounting income
purposes and in a different period for income tax purposes. - CORRECT ANSWER
Which statement accurately explains the recognition of revenues and expenses
under accounting income and income for tax purposes?
$5,300 outflow - CORRECT ANSWER 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?
Assets = Liabilities + Equity - CORRECT ANSWER What is the basic equation for a
balance sheet?
A firm's purchase and sale of long-term assets - CORRECT ANSWER What do cash
flows from investing activities generally relate to?
Cash sales to customers - CORRECT ANSWER Which transaction is reflected in cash
flow from operating activities?
Cash available for distribution after funding required reinvestment - CORRECT
ANSWER What does free cash flow represent?
, The firms have different fiscal years. - CORRECT ANSWER 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?
4 - CORRECT ANSWER 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?
The firm is generating higher returns to owners than the industry. - CORRECT
ANSWER 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?
The product must have been delivered. - CORRECT ANSWER What must have
taken place for a firm to recognize revenue, in order for the firm to comply with
the accrual accounting rules?
