CFI CBCA CORE COURSE EXAM ACTUAL EXAM REAL 300
QUESTIONS AND CORRECT ANSWERS 2025-2026
What is the main goal of using business writing fundamentals? - CORRECT ANSWER-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? - CORRECT ANSWER-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? - CORRECT ANSWER-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? - CORRECT ANSWER-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? - CORRECT
ANSWER-High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - CORRECT ANSWER-Operating
Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - CORRECT ANSWER-Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? - CORRECT ANSWER-
Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct? - CORRECT ANSWER-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? -
CORRECT ANSWER-PEST analysis
,Select the loan contract with the lowest risk. - CORRECT ANSWER-A demand loan with monthly
payments secured by assets
Which is not one of the three main financial statements? - CORRECT ANSWER-Statement of equity
What does the balance sheet indicate? - CORRECT ANSWER-The financial strength of the business
Financing activities - CORRECT ANSWER-Issuing shares and bonds
Operating activities - CORRECT ANSWER-Payments to suppliers; Depreciation and amortization
expense
Investing activities - CORRECT ANSWER-Buying and selling equipment
Which is not a section in the financial statement note disclosures? - CORRECT ANSWER-Management
discussion and analysis
Balance Sheet - CORRECT ANSWER-Retained earnings; Share captial
Income Statement - CORRECT ANSWER-Rent expense
Cash Flow Statement - CORRECT ANSWER-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? - CORRECT ANSWER-$2.1 million
Intangible assets - CORRECT ANSWER-Items of value, which have no physical substance, that are
used to generate revenues
Authorized shares - CORRECT ANSWER-The total number of shares a company can sell
Contingencies - CORRECT ANSWER-Events that may or may not happen, depending on certain
circumstances
, Commitments - CORRECT ANSWER-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? - CORRECT ANSWER-$3,000
What line item is not found in the statement of shareholders' equity? - CORRECT ANSWER-Debt
issued or repurchased
What is not true about a partnership? - CORRECT ANSWER-Partners cannot be held liable for a debt
Which line item usually accounts for direct labor? - CORRECT ANSWER-Cost of goods sold
Select the statements below which are true. Select all that apply. - CORRECT ANSWER-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? - CORRECT ANSWER-Adverse, unqualified, qualified, and
disclaimer of opinion
Which of the following statements regarding a review engagement is false? - CORRECT ANSWER-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). - CORRECT ANSWER-Debt to equity ratio; Working capital ratio
Which of the following tools is NOT used to analyze a company? - CORRECT ANSWER-Porter's five
forces
Which of the following tools are used to analyze a company? - CORRECT ANSWER-Firm lifecycle,
Ansoff's matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: - CORRECT ANSWER-
Economic factors
QUESTIONS AND CORRECT ANSWERS 2025-2026
What is the main goal of using business writing fundamentals? - CORRECT ANSWER-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? - CORRECT ANSWER-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? - CORRECT ANSWER-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? - CORRECT ANSWER-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? - CORRECT
ANSWER-High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - CORRECT ANSWER-Operating
Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - CORRECT ANSWER-Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? - CORRECT ANSWER-
Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct? - CORRECT ANSWER-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? -
CORRECT ANSWER-PEST analysis
,Select the loan contract with the lowest risk. - CORRECT ANSWER-A demand loan with monthly
payments secured by assets
Which is not one of the three main financial statements? - CORRECT ANSWER-Statement of equity
What does the balance sheet indicate? - CORRECT ANSWER-The financial strength of the business
Financing activities - CORRECT ANSWER-Issuing shares and bonds
Operating activities - CORRECT ANSWER-Payments to suppliers; Depreciation and amortization
expense
Investing activities - CORRECT ANSWER-Buying and selling equipment
Which is not a section in the financial statement note disclosures? - CORRECT ANSWER-Management
discussion and analysis
Balance Sheet - CORRECT ANSWER-Retained earnings; Share captial
Income Statement - CORRECT ANSWER-Rent expense
Cash Flow Statement - CORRECT ANSWER-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? - CORRECT ANSWER-$2.1 million
Intangible assets - CORRECT ANSWER-Items of value, which have no physical substance, that are
used to generate revenues
Authorized shares - CORRECT ANSWER-The total number of shares a company can sell
Contingencies - CORRECT ANSWER-Events that may or may not happen, depending on certain
circumstances
, Commitments - CORRECT ANSWER-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? - CORRECT ANSWER-$3,000
What line item is not found in the statement of shareholders' equity? - CORRECT ANSWER-Debt
issued or repurchased
What is not true about a partnership? - CORRECT ANSWER-Partners cannot be held liable for a debt
Which line item usually accounts for direct labor? - CORRECT ANSWER-Cost of goods sold
Select the statements below which are true. Select all that apply. - CORRECT ANSWER-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? - CORRECT ANSWER-Adverse, unqualified, qualified, and
disclaimer of opinion
Which of the following statements regarding a review engagement is false? - CORRECT ANSWER-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). - CORRECT ANSWER-Debt to equity ratio; Working capital ratio
Which of the following tools is NOT used to analyze a company? - CORRECT ANSWER-Porter's five
forces
Which of the following tools are used to analyze a company? - CORRECT ANSWER-Firm lifecycle,
Ansoff's matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: - CORRECT ANSWER-
Economic factors
