CFI CBCA Exam Study Guide Questions With Accurate
Answers 2025\2026 A+ Grade.
What is the main goal of using business writing fundamentals?
- accurate answers-To reduce mental effort
Which of the following statements describes a "Capacity" strength or
weakness for a company in the 5 Cs of credit framework?
- accurate answers-The net profit margin ratio is high.
Which of the following statements describes a "Condition" strength or
weakness for a company in the 5 Cs of credit framework?
- accurate answers-The risks associated with the industry are high.
Which of the following scenarios would NOT be considered a strength when
assessing the management team as part of evaluating a company's character?
- accurate answers-Financial reports are not widely shared and performance
measures have not been identified.
Which of the following ratios most likely indicates strong "Capacity" for a
company?
- accurate answers-High asset turnover ratio
Select the correct formula to calculate the operating margin ratio.
- accurate answers-Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio.
- accurate answers-Inventory Turnover Ratio = Cost of Goods Sold / Average
Inventory
Which of the following most likely indicates strong "Capital" for a company?
- accurate answers-Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct?
- accurate answers-Collateral can be used as the main determinant of a credit
decision.
,Which of the following tools or methods is used to assess the general business
environment?
- accurate answers-PEST analysis
Select the loan contract with the lowest risk.
- accurate answers-A demand loan with monthly payments secured by assets
Which is not one of the three main financial statements?
- accurate answers-Statement of equity
What does the balance sheet indicate?
- accurate answers-The financial strength of the business
Financing activities
- accurate answers-Issuing shares and bonds
Operating activities
- accurate answers-Payments to suppliers; Depreciation and amortization
expense
Investing activities
- accurate answers-Buying and selling equipment
Which is not a section in the financial statement note disclosures?
- accurate answers-Management discussion and analysis
Balance Sheet
- accurate answers-Retained earnings; Share captial
Income Statement
- accurate answers-Rent expense
Cash Flow Statement
- accurate answers-Sale of property, plant and equipment
If a company has net assets equal to $3.25 million but is sold for $5.35 million,
how much goodwill does the acquirer record on their balance sheet?
- accurate answers-$2.1 million
, Intangible assets
- accurate answers-Items of value, which have no physical substance, that are
used to generate revenues
Authorized shares
- accurate answers-The total number of shares a company can sell
Contingencies
- accurate answers-Events that may or may not happen, depending on certain
circumstances
Commitments
- accurate answers-Future obligations that a company has agreed to
If a company issues 60,000 shares at $0.25 each but the shares have a par
value of $0.20 each, what is the resulting contributed surplus?
- accurate answers-$3,000
What line item is not found in the statement of shareholders' equity?
- accurate answers-Debt issued or repurchased
What is not true about a partnership?
- accurate answers-Partners cannot be held liable for a debt
Which line item usually accounts for direct labor?
- accurate answers-Cost of goods sold
Select the statements below which are true. Select all that apply.
- accurate answers-Depreciation and amortization are non-cash expenses; A
company can be profitable but experience negative cash flows
What are the 4 types of audit opinions?
- accurate answers-Adverse, unqualified, qualified, and disclaimer of opinion
Which of the following statements regarding a review engagement is false?
- accurate answers-A review engagement is used for financial statements
prepared for internal use
Answers 2025\2026 A+ Grade.
What is the main goal of using business writing fundamentals?
- accurate answers-To reduce mental effort
Which of the following statements describes a "Capacity" strength or
weakness for a company in the 5 Cs of credit framework?
- accurate answers-The net profit margin ratio is high.
Which of the following statements describes a "Condition" strength or
weakness for a company in the 5 Cs of credit framework?
- accurate answers-The risks associated with the industry are high.
Which of the following scenarios would NOT be considered a strength when
assessing the management team as part of evaluating a company's character?
- accurate answers-Financial reports are not widely shared and performance
measures have not been identified.
Which of the following ratios most likely indicates strong "Capacity" for a
company?
- accurate answers-High asset turnover ratio
Select the correct formula to calculate the operating margin ratio.
- accurate answers-Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio.
- accurate answers-Inventory Turnover Ratio = Cost of Goods Sold / Average
Inventory
Which of the following most likely indicates strong "Capital" for a company?
- accurate answers-Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct?
- accurate answers-Collateral can be used as the main determinant of a credit
decision.
,Which of the following tools or methods is used to assess the general business
environment?
- accurate answers-PEST analysis
Select the loan contract with the lowest risk.
- accurate answers-A demand loan with monthly payments secured by assets
Which is not one of the three main financial statements?
- accurate answers-Statement of equity
What does the balance sheet indicate?
- accurate answers-The financial strength of the business
Financing activities
- accurate answers-Issuing shares and bonds
Operating activities
- accurate answers-Payments to suppliers; Depreciation and amortization
expense
Investing activities
- accurate answers-Buying and selling equipment
Which is not a section in the financial statement note disclosures?
- accurate answers-Management discussion and analysis
Balance Sheet
- accurate answers-Retained earnings; Share captial
Income Statement
- accurate answers-Rent expense
Cash Flow Statement
- accurate answers-Sale of property, plant and equipment
If a company has net assets equal to $3.25 million but is sold for $5.35 million,
how much goodwill does the acquirer record on their balance sheet?
- accurate answers-$2.1 million
, Intangible assets
- accurate answers-Items of value, which have no physical substance, that are
used to generate revenues
Authorized shares
- accurate answers-The total number of shares a company can sell
Contingencies
- accurate answers-Events that may or may not happen, depending on certain
circumstances
Commitments
- accurate answers-Future obligations that a company has agreed to
If a company issues 60,000 shares at $0.25 each but the shares have a par
value of $0.20 each, what is the resulting contributed surplus?
- accurate answers-$3,000
What line item is not found in the statement of shareholders' equity?
- accurate answers-Debt issued or repurchased
What is not true about a partnership?
- accurate answers-Partners cannot be held liable for a debt
Which line item usually accounts for direct labor?
- accurate answers-Cost of goods sold
Select the statements below which are true. Select all that apply.
- accurate answers-Depreciation and amortization are non-cash expenses; A
company can be profitable but experience negative cash flows
What are the 4 types of audit opinions?
- accurate answers-Adverse, unqualified, qualified, and disclaimer of opinion
Which of the following statements regarding a review engagement is false?
- accurate answers-A review engagement is used for financial statements
prepared for internal use
