CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
,CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
,CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
, CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
GRADED A+ ASSURED SUCCESS
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
,CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
,CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
, CFI CBCA Exam Study Guide 2025/2026 EXAM QUESTIONS AND VERIFIED ANSWERS
GRADED A+ ASSURED SUCCESS
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
