CFI CBCA Complete Exam Questions
And Accurate Answers 2026/2027
What is the main goal of using business writing fundamentals? - 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? - 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? - 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? - 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? -
ANSWER-High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - ANSWER-Operating
Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - ANSWER-Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? - ANSWER-
Unutilized lines of credit or loans
Which of the following statements on collateral is NOT 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? - ANSWER-PEST analysis
Select the loan contract with the lowest risk. - ANSWER-A demand loan with monthly
payments secured by assets
Which is not one of the three main financial statements? - ANSWER-Statement of
equity
What does the balance sheet indicate? - ANSWER-The financial strength of the
business
,Financing activities - ANSWER-Issuing shares and bonds
Operating activities - ANSWER-Payments to suppliers; Depreciation and amortization
expense
Investing activities - ANSWER-Buying and selling equipment
Which is not a section in the financial statement note disclosures? - ANSWER-
Management discussion and analysis
Balance Sheet - ANSWER-Retained earnings; Share captial
Income Statement - ANSWER-Rent expense
Cash Flow Statement - 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? - ANSWER-$2.1 million
Intangible assets - ANSWER-Items of value, which have no physical substance, that are
used to generate revenues
Authorized shares - ANSWER-The total number of shares a company can sell
Contingencies - ANSWER-Events that may or may not happen, depending on certain
circumstances
Commitments - 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? - ANSWER-$3,000
What line item is not found in the statement of shareholders' equity? - ANSWER-Debt
issued or repurchased
What is not true about a partnership? - ANSWER-Partners cannot be held liable for a
debt
Which line item usually accounts for direct labor? - ANSWER-Cost of goods sold
Select the statements below which are true. Select all that apply. - 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? - ANSWER-Adverse, unqualified, qualified, and
disclaimer of opinion
Which of the following statements regarding a review engagement is false? - 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). - ANSWER-Debt to equity ratio; Working capital ratio
Which of the following tools is NOT used to analyze a company? - ANSWER-Porter's
five forces
Which of the following tools are used to analyze a company? - ANSWER-Firm lifecycle,
Ansoff's matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: -
ANSWER-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. - ANSWER-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 the Hours of Service regulations for commercial drivers. Shawn
claims that he has been forced to work over 70 hours for the past couple weeks, due to
a high volume of customer orders. According to the Hours of Service regulations, all
commercial drivers may not drive after 60 hours on duty in 7 consecutive days and may
only restart after taking 34 or more consecutive hours off duty.
(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-
regulations) - ANSWER-Legal factors
When competition within an industry is high, which of the following is most likely to be
true? - ANSWER-Buyers have high bargaining power
Which of the following is most likely true for companies at the maturity stage of the
industry lifecycle? - ANSWER-Sales > Cash Flow > Profit
And Accurate Answers 2026/2027
What is the main goal of using business writing fundamentals? - 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? - 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? - 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? - 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? -
ANSWER-High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - ANSWER-Operating
Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - ANSWER-Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? - ANSWER-
Unutilized lines of credit or loans
Which of the following statements on collateral is NOT 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? - ANSWER-PEST analysis
Select the loan contract with the lowest risk. - ANSWER-A demand loan with monthly
payments secured by assets
Which is not one of the three main financial statements? - ANSWER-Statement of
equity
What does the balance sheet indicate? - ANSWER-The financial strength of the
business
,Financing activities - ANSWER-Issuing shares and bonds
Operating activities - ANSWER-Payments to suppliers; Depreciation and amortization
expense
Investing activities - ANSWER-Buying and selling equipment
Which is not a section in the financial statement note disclosures? - ANSWER-
Management discussion and analysis
Balance Sheet - ANSWER-Retained earnings; Share captial
Income Statement - ANSWER-Rent expense
Cash Flow Statement - 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? - ANSWER-$2.1 million
Intangible assets - ANSWER-Items of value, which have no physical substance, that are
used to generate revenues
Authorized shares - ANSWER-The total number of shares a company can sell
Contingencies - ANSWER-Events that may or may not happen, depending on certain
circumstances
Commitments - 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? - ANSWER-$3,000
What line item is not found in the statement of shareholders' equity? - ANSWER-Debt
issued or repurchased
What is not true about a partnership? - ANSWER-Partners cannot be held liable for a
debt
Which line item usually accounts for direct labor? - ANSWER-Cost of goods sold
Select the statements below which are true. Select all that apply. - 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? - ANSWER-Adverse, unqualified, qualified, and
disclaimer of opinion
Which of the following statements regarding a review engagement is false? - 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). - ANSWER-Debt to equity ratio; Working capital ratio
Which of the following tools is NOT used to analyze a company? - ANSWER-Porter's
five forces
Which of the following tools are used to analyze a company? - ANSWER-Firm lifecycle,
Ansoff's matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: -
ANSWER-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. - ANSWER-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 the Hours of Service regulations for commercial drivers. Shawn
claims that he has been forced to work over 70 hours for the past couple weeks, due to
a high volume of customer orders. According to the Hours of Service regulations, all
commercial drivers may not drive after 60 hours on duty in 7 consecutive days and may
only restart after taking 34 or more consecutive hours off duty.
(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-
regulations) - ANSWER-Legal factors
When competition within an industry is high, which of the following is most likely to be
true? - ANSWER-Buyers have high bargaining power
Which of the following is most likely true for companies at the maturity stage of the
industry lifecycle? - ANSWER-Sales > Cash Flow > Profit
