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WGU C214 FINANCIAL MANAGEMENT QUIZ
BANK | 200+ QUESTIONS AND VERIFIED
ANSWERS| 100% CORRECT | NEWLY UPDATED
Trading on the NYSE is executed without a specialist (i.e. a market maker). True or False?
ANSWER: False
ANSWER: NYSE uses specialists to facilitate trading and
maintain liquidity.
Stocks and bonds are two types of financial instruments (T/F)
ANSWER: True
ANSWER: Both are securities representing ownership (stocks)
or debt (bonds).
The matching principle in accrual accounting requires that:
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ANSWER: Revenues be recognized when the earnings process
is complete and matches expenses to revenues recognized.
ANSWER: Ensures expenses align with the revenues they
generate.
A basic equation for the balance sheet is:
ANSWER: Equity = Assets - Liabilities
ANSWER: Represents the fundamental accounting identity.
Why is the Balance Sheet known as a permanent statement?
ANSWER: Because the other statements are reset at the end of
the fiscal year
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ANSWER: Balance sheet accounts carry forward, unlike income
statements.
How do you calculate the change in Retained Earnings?
ANSWER: Net Income - Dividends
ANSWER: Retained earnings increase with income, decrease
with dividends paid.
Which of the following is generally true?
ANSWER: Operating Income and EBIT are the same
ANSWER: EBIT (Earnings Before Interest and Taxes) equals
operating income.
Which components are part of total assets?
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ANSWER: Cash, Accounts Receivable, Inventory, Long Term
Assets
ANSWER: Total assets include all current and non-current asset
types.
Which components are part of current assets?
ANSWER: Inventory, Cash, Accounts Receivable, Short Term
Investments
ANSWER: Current assets are convertible to cash within one
year.
Which components are part of Total Liabilities?