1 for specific request mail
WGU C214 Financial Management OA Study Set
Questions and Correct Answers | Latest Update
Trading on the NYSE is executed without a specialist (i.e. a market
maker). True or False? Ans: False
Stocks and Bonds are two types of financial instruments. True or False?
Ans: True
When revenue is matched with cost of sales in an Income statement it is
called? Ans: Matching principle
Assignment Expert
Basic balance sheet equation is what? Ans: Equity = Assets - Liabilities
Guru01 - Stuvia
Why is the balance sheet known as the permanent statement? Ans:
Because the other statements are reset at the end of the fiscal year.
How do you calculate the change in retained earnings? Ans: Net income-
dividends
2026
Sales - Cost of Sales - other expenses = Ans: Operating Income or EBiT
©
Name four accounts that are part of total assets? Ans: Cash, Accounts
receivable, inventory, long term assets
Name three accounts that are part of total liabilities? Ans: Bonds,
accounts payable and mortgage
Name four accounts that are part of current assets? Ans: Inventory, cash,
accounts receivable and short term investments.
Name three accounts that are only included in cash flow from financing?
Ans: Common stock, dividends paid and bonds payable
Define the statement of cash flows? Ans: Calculated for the same period
of time as the incomes statement is calculated based on the income
, 2 for specific request mail
statement and changes in the balance sheet is one of the three basic
accounting statements.
When fixed assets increase what happens to cash? Ans: Cash will
decrease
What is the purpose of the statement of cash flows? Ans: Explains the
change in cash over the course of the specified time frame.
Suppose the inventory turnover of a company is higher than the industry.
Based on this observation, which of the following is most likely? Ans:
The firm has too little inventory resulting in lost sales or stock-outs.
Assignment Expert
If a company wishes to obtain a bank loan, will it want to have a higher
current ratio or a lower current ratio? Ans: Higher
Guru01 - Stuvia
The Operating Income Return on Investment (OIROI) uses what elements
on the income statement? Ans: EBIT and total assets
2026
Why would a company be interested in the Total Asset Turnover (TAT)
ratio? Ans: To see how efficient are at producing sales
©
What annual interest will be paid for a zero coupon bond? Ans: 0%
What is the most significant characteristic of subordinated debt? Ans:
Senior debt is paid off first
If a company wants to increase its debt capital, how will they raise the
funds? Ans: Sell bonds
What is the lowest level investment bond Ans: BBB
What can cause the bond price to fluctuate? Ans: A change in the bond
rating, a change in the financial condition, general change in interest
rates.
What does a company use as security for a bond? Ans: Credit worthiness
WGU C214 Financial Management OA Study Set
Questions and Correct Answers | Latest Update
Trading on the NYSE is executed without a specialist (i.e. a market
maker). True or False? Ans: False
Stocks and Bonds are two types of financial instruments. True or False?
Ans: True
When revenue is matched with cost of sales in an Income statement it is
called? Ans: Matching principle
Assignment Expert
Basic balance sheet equation is what? Ans: Equity = Assets - Liabilities
Guru01 - Stuvia
Why is the balance sheet known as the permanent statement? Ans:
Because the other statements are reset at the end of the fiscal year.
How do you calculate the change in retained earnings? Ans: Net income-
dividends
2026
Sales - Cost of Sales - other expenses = Ans: Operating Income or EBiT
©
Name four accounts that are part of total assets? Ans: Cash, Accounts
receivable, inventory, long term assets
Name three accounts that are part of total liabilities? Ans: Bonds,
accounts payable and mortgage
Name four accounts that are part of current assets? Ans: Inventory, cash,
accounts receivable and short term investments.
Name three accounts that are only included in cash flow from financing?
Ans: Common stock, dividends paid and bonds payable
Define the statement of cash flows? Ans: Calculated for the same period
of time as the incomes statement is calculated based on the income
, 2 for specific request mail
statement and changes in the balance sheet is one of the three basic
accounting statements.
When fixed assets increase what happens to cash? Ans: Cash will
decrease
What is the purpose of the statement of cash flows? Ans: Explains the
change in cash over the course of the specified time frame.
Suppose the inventory turnover of a company is higher than the industry.
Based on this observation, which of the following is most likely? Ans:
The firm has too little inventory resulting in lost sales or stock-outs.
Assignment Expert
If a company wishes to obtain a bank loan, will it want to have a higher
current ratio or a lower current ratio? Ans: Higher
Guru01 - Stuvia
The Operating Income Return on Investment (OIROI) uses what elements
on the income statement? Ans: EBIT and total assets
2026
Why would a company be interested in the Total Asset Turnover (TAT)
ratio? Ans: To see how efficient are at producing sales
©
What annual interest will be paid for a zero coupon bond? Ans: 0%
What is the most significant characteristic of subordinated debt? Ans:
Senior debt is paid off first
If a company wants to increase its debt capital, how will they raise the
funds? Ans: Sell bonds
What is the lowest level investment bond Ans: BBB
What can cause the bond price to fluctuate? Ans: A change in the bond
rating, a change in the financial condition, general change in interest
rates.
What does a company use as security for a bond? Ans: Credit worthiness
