©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
CFI CBCA Core Course Assessments. Exam
Questions and Answers 100% Pass
What is the main goal of using business writing fundamentals? - ANS 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? - ANS 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? - ANS 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? - ANS 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? -
ANS High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - ANS Operating Margin
Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - ANS Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
1
, ©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
Which of the following most likely indicates strong "Capital" for a company? - ANS Unutilized
lines of credit or loans
Which of the following statements on collateral is NOT correct? - ANS 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? -
ANS PEST analysis
Select the loan contract with the lowest risk. - ANS A demand loan with monthly payments
secured by assets
Which is not one of the three main financial statements? - ANS Statement of equity
What does the balance sheet indicate? - ANS The financial strength of the business
Financing activities - ANS Issuing shares and bonds
Operating activities - ANS Payments to suppliers; Depreciation and amortization expense
Investing activities - ANS Buying and selling equipment
Which is not a section in the financial statement note disclosures? - ANS Management
discussion and analysis
Balance Sheet - ANS Retained earnings; Share captial
Income Statement - ANS Rent expense
2
, ©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
Cash Flow Statement - ANS 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? - ANS $2.1 million
Intangible assets - ANS Items of value, which have no physical substance, that are used to
generate revenues
Authorized shares - ANS The total number of shares a company can sell
Contingencies - ANS Events that may or may not happen, depending on certain
circumstances
Commitments - ANS 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? - ANS $3,000
What line item is not found in the statement of shareholders' equity? - ANS Debt issued or
repurchased
What is not true about a partnership? - ANS Partners cannot be held liable for a debt
Which line item usually accounts for direct labor? - ANS Cost of goods sold
Select the statements below which are true. Select all that apply. - ANS Depreciation and
amortization are non-cash expenses; A company can be profitable but experience negative cash
flows
3
, ©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
What are the 4 types of audit opinions? - ANS Adverse, unqualified, qualified, and disclaimer
of opinion
Which of the following statements regarding a review engagement is false? - ANS A review
engagement is used for financial statements prepared for internal use
Select the following key lending ratios used to evaluate the financial capacity of a business
(select all that apply). - ANS Debt to equity ratio; Working capital ratio
Which of the following tools is NOT used to analyze a company? - ANS Porter's five forces
Which of the following tools are used to analyze a company? - ANS Firm lifecycle, Ansoff's
matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: -
ANS Economic factors
Read the following passage and determine which of the PESTEL factors the described business
is facing:
Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The store
sells fresh vegetables, fruits, meat, dairy, and other packaged products. In recent years, people
in the neighborhood have shown increasing demand for organic farm products. In response,
many other grocery stores and supermarkets have started selling organic vegetables and fruits
grown by local US farmers. - ANS Social factors
Read the following passage and determine which of the PESTEL factors the described business
is facing:
Mountain Transportation is a trucking company that provides in-door deliveries of electronic
products purchased through large consumer electronics retailers in the US. Shawn, a truck
driver at Mountain Transportation, has filed a lawsuit with the company regarding a violation of
4
CFI CBCA Core Course Assessments. Exam
Questions and Answers 100% Pass
What is the main goal of using business writing fundamentals? - ANS 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? - ANS 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? - ANS 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? - ANS 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? -
ANS High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - ANS Operating Margin
Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - ANS Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
1
, ©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
Which of the following most likely indicates strong "Capital" for a company? - ANS Unutilized
lines of credit or loans
Which of the following statements on collateral is NOT correct? - ANS 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? -
ANS PEST analysis
Select the loan contract with the lowest risk. - ANS A demand loan with monthly payments
secured by assets
Which is not one of the three main financial statements? - ANS Statement of equity
What does the balance sheet indicate? - ANS The financial strength of the business
Financing activities - ANS Issuing shares and bonds
Operating activities - ANS Payments to suppliers; Depreciation and amortization expense
Investing activities - ANS Buying and selling equipment
Which is not a section in the financial statement note disclosures? - ANS Management
discussion and analysis
Balance Sheet - ANS Retained earnings; Share captial
Income Statement - ANS Rent expense
2
, ©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
Cash Flow Statement - ANS 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? - ANS $2.1 million
Intangible assets - ANS Items of value, which have no physical substance, that are used to
generate revenues
Authorized shares - ANS The total number of shares a company can sell
Contingencies - ANS Events that may or may not happen, depending on certain
circumstances
Commitments - ANS 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? - ANS $3,000
What line item is not found in the statement of shareholders' equity? - ANS Debt issued or
repurchased
What is not true about a partnership? - ANS Partners cannot be held liable for a debt
Which line item usually accounts for direct labor? - ANS Cost of goods sold
Select the statements below which are true. Select all that apply. - ANS Depreciation and
amortization are non-cash expenses; A company can be profitable but experience negative cash
flows
3
, ©JASONMcCONNELL 2025 ALL RIGHTS RESERVED
What are the 4 types of audit opinions? - ANS Adverse, unqualified, qualified, and disclaimer
of opinion
Which of the following statements regarding a review engagement is false? - ANS A review
engagement is used for financial statements prepared for internal use
Select the following key lending ratios used to evaluate the financial capacity of a business
(select all that apply). - ANS Debt to equity ratio; Working capital ratio
Which of the following tools is NOT used to analyze a company? - ANS Porter's five forces
Which of the following tools are used to analyze a company? - ANS Firm lifecycle, Ansoff's
matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: -
ANS Economic factors
Read the following passage and determine which of the PESTEL factors the described business
is facing:
Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The store
sells fresh vegetables, fruits, meat, dairy, and other packaged products. In recent years, people
in the neighborhood have shown increasing demand for organic farm products. In response,
many other grocery stores and supermarkets have started selling organic vegetables and fruits
grown by local US farmers. - ANS Social factors
Read the following passage and determine which of the PESTEL factors the described business
is facing:
Mountain Transportation is a trucking company that provides in-door deliveries of electronic
products purchased through large consumer electronics retailers in the US. Shawn, a truck
driver at Mountain Transportation, has filed a lawsuit with the company regarding a violation of
4
