CFI FMVA Exam 2025 Questions and
Answers
Income statement accounting - ....ANSWER ...-Accrual - revenues & costs
recorded as a business earns or incurs them, not as it receives and pays money
It includes them in the relevant period's income statement and matches them as closely
as possible
CF makes no difference whatsoever - IS where sale happens
=> How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY
OF GOOD/SERVICE PERFORMED
Why are profits and cash flow not the same thing? - ....ANSWER ...-Accounting
differences
The idea of matching over time - ....ANSWER ...-
CFS Accounting - ....ANSWER ...-Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - ....ANSWER ...-record income and expenditures at the
time the money changes hands
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1
,Cash accounting method - ....ANSWER ...-An accounting method in which
income and expenditures are recorded at the time the money changes hands.
Accrual Accounting - ....ANSWER ...-recording in each fiscal period applicable
expenses, whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - ....ANSWER ...-reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - ....ANSWER ...-the method of accounting that
recognizes revenue when it is earned and matches expenses to the revenues they helped
produce
Accrual Basis Accounting - ....ANSWER ...-Accounting basis in which companies
record, in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - ....ANSWER ...-expenses incurred in one fiscal period but not
paid until a later fiscal period
accrued expenses - ....ANSWER ...-expenses incurred but not yet paid in cash or
recorded
Cash flow from operating activities - ....ANSWER ...-The net amount of cash
provided from operating activities.
cash flow from financing activities - ....ANSWER ...-
The idea of matching over time - ....ANSWER ...-
CFS Accounting - ....ANSWER ...-Only records transactions when cash is received
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 2
,VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - ....ANSWER ...-record income and expenditures at the
time the money changes hands
Cash accounting method - ....ANSWER ...-An accounting method in which
income and expenditures are recorded at the time the money changes hands.
Accrual Accounting - ....ANSWER ...-recording in each fiscal period applicable
expenses, whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - ....ANSWER ...-reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - ....ANSWER ...-the method of accounting that
recognizes revenue when it is earned and matches expenses to the revenues they helped
produce
Accrual Basis Accounting - ....ANSWER ...-Accounting basis in which companies
record, in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - ....ANSWER ...-expenses incurred in one fiscal period but not
paid until a later fiscal period
accrued expenses - ....ANSWER ...-expenses incurred but not yet paid in cash or
recorded
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 3
, Cash flow from operating activities - ....ANSWER ...-The net amount of cash
provided from operating activities.
cash flow from financing activities - ....ANSWER ...-The section of the statement
of cash flows that reports cash flows from transactions affecting the equity and debt of
the business.
cash flow from financing activities - ....ANSWER ...-items related to debt,
dividends, and issuing or repurchasing shares
cash flow from investing activities - ....ANSWER ...-The section of the statement of
cash flows that reports cash flows from transactions affecting investments in noncurrent
assets.
cash flow from investing activities - ....ANSWER ...-involves any cash in or out of
the company due to investment in or disposal of fixed assets.
Contributed surplus - ....ANSWER ...-Amount paid for shares in excess of their par
value
Contributed surplus - ....ANSWER ...-money that has been invested in the firm by
outside parties
Contributed surplus - ....ANSWER ...-A source of contributed capital that can
result from certain types of equity transactions, including the reacquisition of shares.
Straightline depreciation - ....ANSWER ...-Allocates equal amounts of plant assets
net cost to depreciation during its useful life.
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 4
Answers
Income statement accounting - ....ANSWER ...-Accrual - revenues & costs
recorded as a business earns or incurs them, not as it receives and pays money
It includes them in the relevant period's income statement and matches them as closely
as possible
CF makes no difference whatsoever - IS where sale happens
=> How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY
OF GOOD/SERVICE PERFORMED
Why are profits and cash flow not the same thing? - ....ANSWER ...-Accounting
differences
The idea of matching over time - ....ANSWER ...-
CFS Accounting - ....ANSWER ...-Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - ....ANSWER ...-record income and expenditures at the
time the money changes hands
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1
,Cash accounting method - ....ANSWER ...-An accounting method in which
income and expenditures are recorded at the time the money changes hands.
Accrual Accounting - ....ANSWER ...-recording in each fiscal period applicable
expenses, whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - ....ANSWER ...-reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - ....ANSWER ...-the method of accounting that
recognizes revenue when it is earned and matches expenses to the revenues they helped
produce
Accrual Basis Accounting - ....ANSWER ...-Accounting basis in which companies
record, in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - ....ANSWER ...-expenses incurred in one fiscal period but not
paid until a later fiscal period
accrued expenses - ....ANSWER ...-expenses incurred but not yet paid in cash or
recorded
Cash flow from operating activities - ....ANSWER ...-The net amount of cash
provided from operating activities.
cash flow from financing activities - ....ANSWER ...-
The idea of matching over time - ....ANSWER ...-
CFS Accounting - ....ANSWER ...-Only records transactions when cash is received
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 2
,VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - ....ANSWER ...-record income and expenditures at the
time the money changes hands
Cash accounting method - ....ANSWER ...-An accounting method in which
income and expenditures are recorded at the time the money changes hands.
Accrual Accounting - ....ANSWER ...-recording in each fiscal period applicable
expenses, whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - ....ANSWER ...-reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - ....ANSWER ...-the method of accounting that
recognizes revenue when it is earned and matches expenses to the revenues they helped
produce
Accrual Basis Accounting - ....ANSWER ...-Accounting basis in which companies
record, in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - ....ANSWER ...-expenses incurred in one fiscal period but not
paid until a later fiscal period
accrued expenses - ....ANSWER ...-expenses incurred but not yet paid in cash or
recorded
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 3
, Cash flow from operating activities - ....ANSWER ...-The net amount of cash
provided from operating activities.
cash flow from financing activities - ....ANSWER ...-The section of the statement
of cash flows that reports cash flows from transactions affecting the equity and debt of
the business.
cash flow from financing activities - ....ANSWER ...-items related to debt,
dividends, and issuing or repurchasing shares
cash flow from investing activities - ....ANSWER ...-The section of the statement of
cash flows that reports cash flows from transactions affecting investments in noncurrent
assets.
cash flow from investing activities - ....ANSWER ...-involves any cash in or out of
the company due to investment in or disposal of fixed assets.
Contributed surplus - ....ANSWER ...-Amount paid for shares in excess of their par
value
Contributed surplus - ....ANSWER ...-money that has been invested in the firm by
outside parties
Contributed surplus - ....ANSWER ...-A source of contributed capital that can
result from certain types of equity transactions, including the reacquisition of shares.
Straightline depreciation - ....ANSWER ...-Allocates equal amounts of plant assets
net cost to depreciation during its useful life.
…FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 4
