CFI CBCA Core Course Assessments
Exam Questions and Answers Graded A+
What is the main goal of using business writing fundamentals? - Correct 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? - Correct 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? - Correct 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? -
Correct 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? - Correct answer-High asset turnover ratio
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Select the correct formula to calculate the operating margin ratio. - Correct answer-
Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - Correct
answer-Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? -
Correct answer-Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct? - 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? - Correct answer-PEST analysis
Select the loan contract with the lowest risk. - Correct answer-A demand loan with
monthly payments secured by assets
Which is not one of the three main financial statements? - Correct answer-
Statement of equity
What does the balance sheet indicate? - Correct answer-The financial strength of
the business
Financing activities - Correct answer-Issuing shares and bonds
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,Operating activities - Correct answer-Payments to suppliers; Depreciation and
amortization expense
Investing activities - Correct answer-Buying and selling equipment
Which is not a section in the financial statement note disclosures? - Correct
answer-Management discussion and analysis
Balance Sheet - Correct answer-Retained earnings; Share captial
Income Statement - Correct answer-Rent expense
Cash Flow Statement - Correct 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? - Correct
answer-$2.1 million
Intangible assets - Correct answer-Items of value, which have no physical
substance, that are used to generate revenues
Authorized shares - Correct answer-The total number of shares a company can sell
Contingencies - Correct answer-Events that may or may not happen, depending on
certain circumstances
Commitments - Correct answer-Future obligations that a company has agreed to
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, 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
What line item is not found in the statement of shareholders' equity? - Correct
answer-Debt issued or repurchased
What is not true about a partnership? - Correct answer-Partners cannot be held
liable for a debt
Which line item usually accounts for direct labor? - Correct answer-Cost of goods
sold
Select the statements below which are true. Select all that apply. - Correct 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? - Correct answer-Adverse, unqualified,
qualified, and disclaimer of opinion
Which of the following statements regarding a review engagement is false? -
Correct answer-A review engagement is used for financial statements prepared for
internal use
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Exam Questions and Answers Graded A+
What is the main goal of using business writing fundamentals? - Correct 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? - Correct 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? - Correct 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? -
Correct 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? - Correct answer-High asset turnover ratio
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Select the correct formula to calculate the operating margin ratio. - Correct answer-
Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - Correct
answer-Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? -
Correct answer-Unutilized lines of credit or loans
Which of the following statements on collateral is NOT correct? - 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? - Correct answer-PEST analysis
Select the loan contract with the lowest risk. - Correct answer-A demand loan with
monthly payments secured by assets
Which is not one of the three main financial statements? - Correct answer-
Statement of equity
What does the balance sheet indicate? - Correct answer-The financial strength of
the business
Financing activities - Correct answer-Issuing shares and bonds
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,Operating activities - Correct answer-Payments to suppliers; Depreciation and
amortization expense
Investing activities - Correct answer-Buying and selling equipment
Which is not a section in the financial statement note disclosures? - Correct
answer-Management discussion and analysis
Balance Sheet - Correct answer-Retained earnings; Share captial
Income Statement - Correct answer-Rent expense
Cash Flow Statement - Correct 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? - Correct
answer-$2.1 million
Intangible assets - Correct answer-Items of value, which have no physical
substance, that are used to generate revenues
Authorized shares - Correct answer-The total number of shares a company can sell
Contingencies - Correct answer-Events that may or may not happen, depending on
certain circumstances
Commitments - Correct answer-Future obligations that a company has agreed to
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, 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
What line item is not found in the statement of shareholders' equity? - Correct
answer-Debt issued or repurchased
What is not true about a partnership? - Correct answer-Partners cannot be held
liable for a debt
Which line item usually accounts for direct labor? - Correct answer-Cost of goods
sold
Select the statements below which are true. Select all that apply. - Correct 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? - Correct answer-Adverse, unqualified,
qualified, and disclaimer of opinion
Which of the following statements regarding a review engagement is false? -
Correct answer-A review engagement is used for financial statements prepared for
internal use
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
