CFI CBCA Core Course Assessments & Quizzes

CFI CBCA Core Course Assessments &
Quizzes
What is the main goal of using business writing fundamentals? - Correct answersTo
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reduce mental effort
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Which of the following statements describes a "Capacity" strength or weakness for a
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company in the 5 Cs of credit framework? - Correct answersThe net profit margin ratio is
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high.
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Which of the following statements describes a "Condition" strength or weakness for a
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company in the 5 Cs of credit framework? - Correct answersThe risks associated with the
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industry are high.
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Which of the following scenarios would NOT be considered a strength when assessing
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the management team as part of evaluating a company's character? - Correct
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answersFinancial reports are not widely shared and performance measures have not
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been identified.
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Which of the following ratios most likely indicates strong "Capacity" for a company? -
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Correct answersHigh asset turnover ratio
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Select the correct formula to calculate the operating margin ratio. - Correct
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answersOperating Margin Ratio = EBIT / Revenue
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Select the correct formula to calculate the inventory turnover ratio. - Correct
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answersInventory Turnover Ratio = Cost of Goods Sold / Average Inventory
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Which of the following most likely indicates strong "Capital" for a company? - Correct
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answersUnutilized lines of credit or loans
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Which of the following statements on collateral is NOT correct? - Correct
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answersCollateral can be used as the main determinant of a credit decision.
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Which of the following tools or methods is used to assess the general business
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environment? - Correct answersPEST analysis
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Select the loan contract with the lowest risk. - Correct answersA demand loan with
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monthly payments secured by assets
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Which is not one of the three main financial statements? - Correct answersStatement of
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equity
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, What does the balance sheet indicate? - Correct answersThe financial strength of the
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business
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kk Financing activities - Correct answersIssuing shares and bonds
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Operating activities - Correct answersPayments to suppliers; Depreciation and
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amortization expense
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kk Investing activities - Correct answersBuying and selling equipment
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Which is not a section in the financial statement note disclosures? - Correct
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answersManagement discussion and analysis
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kk Balance Sheet - Correct answersRetained earnings; Share captial
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kk Income Statement - Correct answersRent expense
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kk Cash Flow Statement - Correct answersSale of property, plant and equipment
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If a company has net assets equal to $3.25 million but is sold for $5.35 million, how much
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goodwill does the acquirer record on their balance sheet? - Correct answers$2.1 million
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Intangible assets - Correct answersItems of value, which have no physical substance,
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that are used to generate revenues
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kk Authorized shares - Correct answersThe total number of shares a company can sell
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Contingencies - Correct answersEvents that may or may not happen, depending on
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certain circumstances
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kk Commitments - Correct answersFuture obligations that a company has agreed to kk kk kk kk kk kk kk kk kk kk kk




If a company issues 60,000 shares at $0.25 each but the shares have a par value of
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$0.20 each, what is the resulting contributed surplus? - Correct answers$3,000
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What line item is not found in the statement of shareholders' equity? - Correct
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answersDebt issued or repurchased
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What is not true about a partnership? - Correct answersPartners cannot be held liable for
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a debt
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kk Which line item usually accounts for direct labor? - Correct answersCost of goods sold
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Select the statements below which are true. Select all that apply. - Correct
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answersDepreciation and amortization are non-cash expenses; A company can be
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profitable but experience negative cash flows
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, What are the 4 types of audit opinions? - Correct answersAdverse, unqualified, qualified,
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and disclaimer of opinion
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Which of the following statements regarding a review engagement is false? - Correct
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answersA review engagement is used for financial statements prepared for internal use
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Select the following key lending ratios used to evaluate the financial capacity of a
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business (select all that apply). - Correct answersDebt to equity ratio; Working capital
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ratio
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Which of the following tools is NOT used to analyze a company? - Correct
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answersPorter's five forces
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Which of the following tools are used to analyze a company? - Correct answersFirm
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lifecycle, Ansoff's matrix, SWOT analysis
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In assessing the PESTEL factors, consumer disposable income is an example of: -
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Correct answersEconomic factors
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Read the following passage and determine which of the PESTEL factors the described
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business is facing:
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Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The
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store sells fresh vegetables, fruits, meat, dairy, and other packaged products. In recent
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years, people in the neighborhood have shown increasing demand for organic farm
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products. In response, many other grocery stores and supermarkets have started selling
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organic vegetables and fruits grown by local US farmers. - Correct answersSocial factors
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Read the following passage and determine which of the PESTEL factors the described
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business is facing:
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Mountain Transportation is a trucking company that provides in-door deliveries of
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electronic products purchased through large consumer electronics retailers in the US.
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Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the company
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regarding a violation of the Hours of Service regulations for commercial drivers. Shawn
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claims that he has been forced to work over 70 hours for the past couple weeks, due to a
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high volume of customer orders. According to the Hours of Service regulations, all
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commercial drivers may not drive after 60 hours on duty in 7 consecutive days and may
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only restart after taking 34 or more consecutive hours off duty.
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(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-
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regulations) - Correct answersLegal factors kk kk kk kk kk




When competition within an industry is high, which of the following is most likely to be
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true? - Correct answersBuyers have high bargaining power
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Which of the following is most likely true for companies at the maturity stage of the
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industry lifecycle? - Correct answersSales > Cash Flow > Profit
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