CFI CBCA Core Course Assessments &
Quizzes Questions and Answers
1. What is the main goal of using business writing fundamentals?
Answer To reduce mental effort
2. Which of the following statements describes a "Capacity" strength or
weak- ness for a company in the 5 Cs of credit framework?
Answer The net profit margin ratio is high.
3. Which of the following statements describes a "Condition" strength or
weak- ness for a company in the 5 Cs of credit framework?
Answer The risks associated with the industry are high.
4. 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.
5. Which of the following ratios most likely indicates strong
"Capacity" for a company?
Answer High asset turnover ratio
,6. Select the correct formula to calculate the operating margin ratio.
Answer Operating Margin Ratio = EBIT / Revenue
7. Select the correct formula to calculate the inventory turnover ratio.
Answer Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
8. Which of the following most likely indicates strong "Capital" for a
company?-
Answer Unutilized lines of credit or loans
9. Which of the following statements on collateral is NOT correct?
Answer Collateral can be used as the main determinant of a credit decision.
10. Which of the following tools or methods is used to assess
the general business environment?
Answer PEST analysis
11. Select the loan contract with the lowest risk.
Answer A demand loan with monthly payments secured by assets
12. Which is not one of the three main financial statements?
Answer Statement of equity
13. What does the balance sheet indicate?
, Answer The financial strength of the business
14. Financing activities
Answer Issuing shares and bonds
15. Operating activities
Answer Payments to suppliers; Depreciation and amortization expense
16. Investing activities
Answer Buying and selling equipment
17. Which is not a section in the financial statement note
disclosures?
Answer Management discussion and analysis
18. Balance Sheet
Answer Retained earnings; Share captial
19. Income Statement
Answer Rent expense
20. Cash Flow Statement
Answer Sale of property, plant and equipment
21. If a company has net assets equal to $3.25 million but is sold
, for $5.35 mil- lion, how much goodwill does the acquirer record on
their balance sheet?
Answer $2.1 million
22. Intangible assets
Answer Items of value, which have no physical substance, that are used to generate revenues
23. Authorized shares
Answer The total number of shares a company can sell
24. Contingencies
Answer Events that may or may not happen, depending on certain circumstances
25. Commitments
Answer Future obligations that a company has agreed to
26. 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
27. What line item is not found in the statement of
shareholders' equity?
Answer Debt issued or repurchased
Quizzes Questions and Answers
1. What is the main goal of using business writing fundamentals?
Answer To reduce mental effort
2. Which of the following statements describes a "Capacity" strength or
weak- ness for a company in the 5 Cs of credit framework?
Answer The net profit margin ratio is high.
3. Which of the following statements describes a "Condition" strength or
weak- ness for a company in the 5 Cs of credit framework?
Answer The risks associated with the industry are high.
4. 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.
5. Which of the following ratios most likely indicates strong
"Capacity" for a company?
Answer High asset turnover ratio
,6. Select the correct formula to calculate the operating margin ratio.
Answer Operating Margin Ratio = EBIT / Revenue
7. Select the correct formula to calculate the inventory turnover ratio.
Answer Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
8. Which of the following most likely indicates strong "Capital" for a
company?-
Answer Unutilized lines of credit or loans
9. Which of the following statements on collateral is NOT correct?
Answer Collateral can be used as the main determinant of a credit decision.
10. Which of the following tools or methods is used to assess
the general business environment?
Answer PEST analysis
11. Select the loan contract with the lowest risk.
Answer A demand loan with monthly payments secured by assets
12. Which is not one of the three main financial statements?
Answer Statement of equity
13. What does the balance sheet indicate?
, Answer The financial strength of the business
14. Financing activities
Answer Issuing shares and bonds
15. Operating activities
Answer Payments to suppliers; Depreciation and amortization expense
16. Investing activities
Answer Buying and selling equipment
17. Which is not a section in the financial statement note
disclosures?
Answer Management discussion and analysis
18. Balance Sheet
Answer Retained earnings; Share captial
19. Income Statement
Answer Rent expense
20. Cash Flow Statement
Answer Sale of property, plant and equipment
21. If a company has net assets equal to $3.25 million but is sold
, for $5.35 mil- lion, how much goodwill does the acquirer record on
their balance sheet?
Answer $2.1 million
22. Intangible assets
Answer Items of value, which have no physical substance, that are used to generate revenues
23. Authorized shares
Answer The total number of shares a company can sell
24. Contingencies
Answer Events that may or may not happen, depending on certain circumstances
25. Commitments
Answer Future obligations that a company has agreed to
26. 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
27. What line item is not found in the statement of
shareholders' equity?
Answer Debt issued or repurchased
