CFI CBCA Core Course Exam Questions With Verified Correct Answers

CFI CBCA Core Course Exam Questions With
Verified Correct Answers
QUESTION>Which are desired outcomes when trying to reduce the ethics risks in the workplace? Select
ALL correct answers. - CORRECT ANSWER~A decrease in observed misconduct

Reduced retaliation for reporting



QUESTION>What's the best way to manage the situation where individuals rationalize committing
misconduct in an organization? - CORRECT ANSWER~By communicating corporate values and
emphasizing those values



QUESTION>What is the main role of the supervisory level in an organization to create an ethical culture?
- CORRECT ANSWER~Reinforcing ethical behavior



QUESTION >What is the main goal of using business writing fundamentals? - CORRECT ANSWER~To
reduce mental effort



QUESTION>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.



QUESTION>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.



QUESTION>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.



QUESTION>Which of the following ratios most likely indicates strong "Capacity" for a company? -
CORRECT ANSWER~High asset turnover ratio

,QUESTION>Select the correct formula to calculate the operating margin ratio. - CORRECT
ANSWER~Operating Margin Ratio = EBIT / Revenue



QUESTION>Select the correct formula to calculate the inventory turnover ratio. - CORRECT
ANSWER~Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory



QUESTION>Which of the following most likely indicates strong "Capital" for a company? - CORRECT
ANSWER~Unutilized lines of credit or loans



QUESTION>Which of the following statements on collateral is NOT correct? - CORRECT
ANSWER~Collateral can be used as the main determinant of a credit decision.



QUESTION>Which of the following tools or methods is used to assess the general business
environment? - CORRECT ANSWER~PEST analysis



QUESTION>Select the loan contract with the lowest risk. - CORRECT ANSWER~A demand loan with
monthly payments secured by assets



QUESTION>Which is not one of the three main financial statements? - CORRECT ANSWER~Statement of
equity



QUESTION>What does the balance sheet indicate? - CORRECT ANSWER~The financial strength of the
business



QUESTION>Financing activities - CORRECT ANSWER~Issuing shares and bonds



QUESTION>Operating activities - CORRECT ANSWER~Payments to suppliers; Depreciation and
amortization expense



QUESTION>Investing activities - CORRECT ANSWER~Buying and selling equipment

, QUESTION>Which is not a section in the financial statement note disclosures? - CORRECT
ANSWER~Management discussion and analysis



QUESTION>Balance Sheet - CORRECT ANSWER~Retained earnings; Share captial



QUESTION>Income Statement - CORRECT ANSWER~Rent expense



QUESTION>Cash Flow Statement - CORRECT ANSWER~Sale of property, plant and equipment



QUESTION>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



QUESTION>Intangible assets - CORRECT ANSWER~Items of value, which have no physical substance, that
are used to generate revenues



QUESTION>Authorized shares - CORRECT ANSWER~The total number of shares a company can sell



QUESTION>Contingencies - CORRECT ANSWER~Events that may or may not happen, depending on
certain circumstances



QUESTION>Commitments - CORRECT ANSWER~Future obligations that a company has agreed to



QUESTION>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



QUESTION>What line item is not found in the statement of shareholders' equity? - CORRECT
ANSWER~Debt issued or repurchased



QUESTION>What is not true about a partnership? - CORRECT ANSWER~Partners cannot be held liable
for a debt