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WGU C214 Multiple Attempt Study Guide 1.What standards are used to help US investors understand and compare foreign financial statements to domestic financial statements?ANS International Financial Reporting Standards 2.When a company is optimizing its resources and maintaining or improving productivity, they are engaging in what hypothesis ANS Efficient Market Hypothesis 3.What is the basic type of negotiable debt?ANS Bonds 4.What is the characteristic of a stock sold in the secondary markets?ANS Stocks sold in the secondary markets are traded after the initial offering.
5.If a company is engaged in lobbying for tariffs and trade restrictions, if they are successful, what are the two principal impacts?ANS Protection for the lobbyist and higher prices for the consumer pre reduced competition.
6.Describe what an income statement is in one sentence? 1 / 3
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ANS It covers a period of time and starts with sales, takes out expenses, and ends with net income.
7.What is the difference between taxable income and accounting income?ANS - Accounting income is reported as net income on the income statement whereas Taxable income is used to determine the amount of tax a firm must pay.
8.Net Income 15,000 Depreciation Exp 2,000 Change in Operating Assets 1,200 Change in PP&E 2,000 Change in long-term liab. 1,200 Dividends paid 1,500 What is the Cash Flow from Financing?ANS CFF= Incr Stock + Incr Debt -Dividends Paid
= 1200-1500
= -300
9.Net Income 121,000 Depreciation Expense 4,000 Accounts Receivable 2 / 3
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(30,000) Change in net PP&E 15,000 Accounts Payable (5,000) New Bank Loan 12,000 Dividends Paid 1,500 What is the Cash Flow from Investing?ANS CFI = Change in Net PPE + Depreciation Expense
= 15,000 + 4,000
= 19,000
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