CFI CBCA Core Course Exam LATEST 2025 WITH
Questions and WELL DETAILED Answers ||NEWEST
VERSION 2025/26
What is the main goal of using business writing fundamentals? -CORRECTANSWER
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? -CORRECTANSWER 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? -CORRECTANSWER 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? -
CORRECTANSWER 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? -
CORRECTANSWER High asset turnover ratio
,Select the correct formula to calculate the operating margin ratio. -CORRECTANSWER
Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. -
CORRECTANSWER Inventory Turnover Ratio = Cost of Goods Sold / Average
Inventory
Which of the following most likely indicates strong "Capital" for a company? -
CORRECTANSWER Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct? -CORRECTANSWER
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? -CORRECTANSWER PEST analysis
Select the loan contract with the lowest risk. -CORRECTANSWER A demand loan with
monthly payments secured by assets
Which is not one of the three main financial statements? -CORRECTANSWER
Statement of equity
,What does the balance sheet indicate? -CORRECTANSWER The financial strength of
the business
Financing activities -CORRECTANSWER Issuing shares and bonds
Operating activities -CORRECTANSWER Payments to suppliers; Depreciation and
amortization expense
Investing activities -CORRECTANSWER Buying and selling equipment
Which is not a section in the financial statement note disclosures? -
CORRECTANSWER Management discussion and analysis
Balance Sheet -CORRECTANSWER Retained earnings; Share captial
Income Statement -CORRECTANSWER Rent expense
Cash Flow Statement -CORRECTANSWER 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? -CORRECTANSWER
$2.1 million
, Intangible assets -CORRECTANSWER Items of value, which have no physical
substance, that are used to generate revenues
Authorized shares -CORRECTANSWER The total number of shares a company can
sell
Contingencies -CORRECTANSWER Events that may or may not happen, depending
on certain circumstances
Commitments -CORRECTANSWER 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? -CORRECTANSWER $3,000
What line item is not found in the statement of shareholders' equity? -
CORRECTANSWER Debt issued or repurchased
What is not true about a partnership? -CORRECTANSWER Partners cannot be held
liable for a debt
Which line item usually accounts for direct labor? -CORRECTANSWER Cost of goods
sold
Questions and WELL DETAILED Answers ||NEWEST
VERSION 2025/26
What is the main goal of using business writing fundamentals? -CORRECTANSWER
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? -CORRECTANSWER 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? -CORRECTANSWER 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? -
CORRECTANSWER 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? -
CORRECTANSWER High asset turnover ratio
,Select the correct formula to calculate the operating margin ratio. -CORRECTANSWER
Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. -
CORRECTANSWER Inventory Turnover Ratio = Cost of Goods Sold / Average
Inventory
Which of the following most likely indicates strong "Capital" for a company? -
CORRECTANSWER Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct? -CORRECTANSWER
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? -CORRECTANSWER PEST analysis
Select the loan contract with the lowest risk. -CORRECTANSWER A demand loan with
monthly payments secured by assets
Which is not one of the three main financial statements? -CORRECTANSWER
Statement of equity
,What does the balance sheet indicate? -CORRECTANSWER The financial strength of
the business
Financing activities -CORRECTANSWER Issuing shares and bonds
Operating activities -CORRECTANSWER Payments to suppliers; Depreciation and
amortization expense
Investing activities -CORRECTANSWER Buying and selling equipment
Which is not a section in the financial statement note disclosures? -
CORRECTANSWER Management discussion and analysis
Balance Sheet -CORRECTANSWER Retained earnings; Share captial
Income Statement -CORRECTANSWER Rent expense
Cash Flow Statement -CORRECTANSWER 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? -CORRECTANSWER
$2.1 million
, Intangible assets -CORRECTANSWER Items of value, which have no physical
substance, that are used to generate revenues
Authorized shares -CORRECTANSWER The total number of shares a company can
sell
Contingencies -CORRECTANSWER Events that may or may not happen, depending
on certain circumstances
Commitments -CORRECTANSWER 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? -CORRECTANSWER $3,000
What line item is not found in the statement of shareholders' equity? -
CORRECTANSWER Debt issued or repurchased
What is not true about a partnership? -CORRECTANSWER Partners cannot be held
liable for a debt
Which line item usually accounts for direct labor? -CORRECTANSWER Cost of goods
sold
