CFI CBCA CORE COURSE EXAM ACTUAL EXAM REAL 300

CFI CBCA CORE COURSE EXAM ACTUAL EXAM REAL 300

QUESTIONS AND CORRECT ANSWERS -

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

• 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

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

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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

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 2 / 3

Commitments - CORRECT 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? - 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

Select the following key lending ratios used to evaluate the financial capacity of a business (select all that apply). - CORRECT ANSWER-Debt to equity ratio; Working capital ratio

Which of the following tools is NOT used to analyze a company? - CORRECT ANSWER-Porter's five forces

Which of the following tools are used to analyze a company? - CORRECT ANSWER-Firm lifecycle, Ansoff's matrix, SWOT analysis

In assessing the PESTEL factors, consumer disposable income is an example of: - CORRECT ANSWER- Economic factors

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