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.
kk
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
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
industry are high.
kk kk kk
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.
kk kk
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
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
monthly payments secured by assets
kk kk kk kk kk
Which is not one of the three main financial statements? - Correct answersStatement of
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equity
kk
, What does the balance sheet indicate? - Correct answersThe financial strength of the
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business
kk
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
kk kk kk kk kk kk kk kk kk kk kk kk kk
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
kk kk
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
kk
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:
kk kk kk
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:
kk kk kk
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
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
only restart after taking 34 or more consecutive hours off duty.
kk kk kk kk kk kk kk kk kk kk kk
(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-
kk
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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Quizzes
What is the main goal of using business writing fundamentals? - Correct answersTo
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reduce mental effort
kk kk kk
Which of the following statements describes a "Capacity" strength or weakness for a
kk kk kk kk kk kk kk kk kk kk kk kk kk
company in the 5 Cs of credit framework? - Correct answersThe net profit margin ratio is
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
high.
kk
Which of the following statements describes a "Condition" strength or weakness for a
kk kk kk kk kk kk kk kk kk kk kk kk kk
company in the 5 Cs of credit framework? - Correct answersThe risks associated with the
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
industry are high.
kk kk kk
Which of the following scenarios would NOT be considered a strength when assessing
kk kk kk kk kk kk kk kk kk kk kk kk kk
the management team as part of evaluating a company's character? - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk
answersFinancial reports are not widely shared and performance measures have not
kk kk kk kk kk kk kk kk kk kk kk
been identified.
kk kk
Which of the following ratios most likely indicates strong "Capacity" for a company? -
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
Correct answersHigh asset turnover ratio
kk kk kk kk kk
Select the correct formula to calculate the operating margin ratio. - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk
answersOperating Margin Ratio = EBIT / Revenue
kk kk kk kk kk kk kk
Select the correct formula to calculate the inventory turnover ratio. - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk
answersInventory Turnover Ratio = Cost of Goods Sold / Average Inventory
kk kk kk kk kk kk kk kk kk kk kk
Which of the following most likely indicates strong "Capital" for a company? - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
answersUnutilized lines of credit or loans
kk kk kk kk kk kk
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.
kk kk kk kk kk kk kk kk kk kk kk kk
Which of the following tools or methods is used to assess the general business
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
environment? - Correct answersPEST analysis
kk kk kk kk kk kk
Select the loan contract with the lowest risk. - Correct answersA demand loan with
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
monthly payments secured by assets
kk kk kk kk kk
Which is not one of the three main financial statements? - Correct answersStatement of
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
equity
kk
, What does the balance sheet indicate? - Correct answersThe financial strength of the
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
business
kk
kk Financing activities - Correct answersIssuing shares and bonds
kk kk kk kk kk kk kk kk
Operating activities - Correct answersPayments to suppliers; Depreciation and
kk kk kk kk kk kk kk kk kk kk
amortization expense
kk kk
kk Investing activities - Correct answersBuying and selling equipment
kk kk kk kk kk kk kk kk
Which is not a section in the financial statement note disclosures? - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
answersManagement discussion and analysis
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kk Balance Sheet - Correct answersRetained earnings; Share captial
kk kk kk kk kk kk kk kk
kk Income Statement - Correct answersRent expense
kk kk kk kk kk kk
kk Cash Flow Statement - Correct answersSale of property, plant and equipment
kk kk kk kk kk kk kk kk kk kk kk
If a company has net assets equal to $3.25 million but is sold for $5.35 million, how much
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
goodwill does the acquirer record on their balance sheet? - Correct answers$2.1 million
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
Intangible assets - Correct answersItems of value, which have no physical substance,
kk kk kk kk kk kk kk kk kk kk kk kk kk
that are used to generate revenues
kk kk kk kk kk kk
kk Authorized shares - Correct answersThe total number of shares a company can sell
kk kk kk kk kk kk kk kk kk kk kk kk kk
Contingencies - Correct answersEvents that may or may not happen, depending on
kk kk kk kk kk kk kk kk kk kk kk kk kk
certain circumstances
kk kk
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
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
$0.20 each, what is the resulting contributed surplus? - Correct answers$3,000
kk kk kk kk kk kk kk kk kk kk kk kk
What line item is not found in the statement of shareholders' equity? - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
answersDebt issued or repurchased
kk kk kk kk
What is not true about a partnership? - Correct answersPartners cannot be held liable for
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
a debt
kk kk
kk Which line item usually accounts for direct labor? - Correct answersCost of goods sold
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
Select the statements below which are true. Select all that apply. - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
answersDepreciation and amortization are non-cash expenses; A company can be
kk kk kk kk kk kk kk kk kk kk
profitable but experience negative cash flows
kk kk kk kk kk kk
, What are the 4 types of audit opinions? - Correct answersAdverse, unqualified, qualified,
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and disclaimer of opinion
kk kk kk kk
Which of the following statements regarding a review engagement is false? - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
answersA review engagement is used for financial statements prepared for internal use
kk kk kk kk kk kk kk kk kk kk kk kk
Select the following key lending ratios used to evaluate the financial capacity of a
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
business (select all that apply). - Correct answersDebt to equity ratio; Working capital
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
ratio
kk
Which of the following tools is NOT used to analyze a company? - Correct
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
answersPorter's five forces
kk kk kk
Which of the following tools are used to analyze a company? - Correct answersFirm
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
lifecycle, Ansoff's matrix, SWOT analysis
kk kk kk kk kk
In assessing the PESTEL factors, consumer disposable income is an example of: -
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
Correct answersEconomic factors
kk kk kk
Read the following passage and determine which of the PESTEL factors the described
kk kk kk kk kk kk kk kk kk kk kk kk kk
business is facing:
kk kk kk
Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
store sells fresh vegetables, fruits, meat, dairy, and other packaged products. In recent
kk kk kk kk kk kk kk kk kk kk kk kk kk
years, people in the neighborhood have shown increasing demand for organic farm
kk kk kk kk kk kk kk kk kk kk kk kk
products. In response, many other grocery stores and supermarkets have started selling
kk kk kk kk kk kk kk kk kk kk kk kk
organic vegetables and fruits grown by local US farmers. - Correct answersSocial factors
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
Read the following passage and determine which of the PESTEL factors the described
kk kk kk kk kk kk kk kk kk kk kk kk kk
business is facing:
kk kk kk
Mountain Transportation is a trucking company that provides in-door deliveries of
kk kk kk kk kk kk kk kk kk kk
electronic products purchased through large consumer electronics retailers in the US.
kk kk kk kk kk kk kk kk kk kk kk
Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the company
kk kk kk kk kk kk kk kk kk kk kk kk kk kk
regarding a violation of the Hours of Service regulations for commercial drivers. Shawn
kk kk kk kk kk kk kk kk kk kk kk kk kk
claims that he has been forced to work over 70 hours for the past couple weeks, due to a
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
high volume of customer orders. According to the Hours of Service regulations, all
kk kk kk kk kk kk kk kk kk kk kk kk kk
commercial drivers may not drive after 60 hours on duty in 7 consecutive days and may
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
only restart after taking 34 or more consecutive hours off duty.
kk kk kk kk kk kk kk kk kk kk kk
(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-
kk
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
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
true? - Correct answersBuyers have high bargaining power
kk kk kk kk kk kk kk kk kk
Which of the following is most likely true for companies at the maturity stage of the
kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk kk
industry lifecycle? - Correct answersSales > Cash Flow > Profit
kk kk kk kk kk kk kk kk kk kk kk
