CREDIT BUSINESS ASSOCIATE (CBA) EXAM
2026-2027 PRACTICE QUESTIONS AND
ANSWERS FINANCE/ACCOUNTING GRADED A+
There is a greater probability of consistency under a written credit policy than an
oral credit policy.
True
Companies that deal in cash do not need a credit policy.
False
The type of customer a company or industry serves can affect its credit policy.
True
The financial position does not have an effect on a company's credit policy.
False
,A credit policy should be reviewed regularly or it may have a negative influence
on cash flow and revenue.
True
In addition to using the credit application as an investigative tool, the credit
application should create a contract between the seller and the buyer.
True
The goal of a credit application is to assist the debtor in learning as much as
possible about the creditor before making a decision to extend credit.
False
From a practical standpoint, there is no direct relation between the terms of sale
and the seller's perception of the buyer's ability to pay.
False
Standard terms of sale must be set independently by each seller, without collusion
or conspiracy with other sellers, to avoid violation of the antitrust laws.
True
,Consumer credit relates to goods or services for personal, family or household use
only.
True
Inconsistent treatment of unearned discounts can put a creditor at risk for antitrust
lawsuits.
True
As time passes, receivables gain value.
False
Direct credit investigations usually refer to acquiring information from third-party
sources that are in the business of preparing information on companies.
False
, Third party sources of credit information exist because gathering credit
information directly can be time consuming.
True
The exchange of credit experience information is legal and proper, but the
information exchanged must be restricted to factual, historical data.
True
The Fair Credit Reporting Act prohibits a business credit grantor from
discriminating when extending credit.
False
A customer's non-functioning website may be a red flag.
True
Industry credit groups are a key component of any direct investigation.
False
2026-2027 PRACTICE QUESTIONS AND
ANSWERS FINANCE/ACCOUNTING GRADED A+
There is a greater probability of consistency under a written credit policy than an
oral credit policy.
True
Companies that deal in cash do not need a credit policy.
False
The type of customer a company or industry serves can affect its credit policy.
True
The financial position does not have an effect on a company's credit policy.
False
,A credit policy should be reviewed regularly or it may have a negative influence
on cash flow and revenue.
True
In addition to using the credit application as an investigative tool, the credit
application should create a contract between the seller and the buyer.
True
The goal of a credit application is to assist the debtor in learning as much as
possible about the creditor before making a decision to extend credit.
False
From a practical standpoint, there is no direct relation between the terms of sale
and the seller's perception of the buyer's ability to pay.
False
Standard terms of sale must be set independently by each seller, without collusion
or conspiracy with other sellers, to avoid violation of the antitrust laws.
True
,Consumer credit relates to goods or services for personal, family or household use
only.
True
Inconsistent treatment of unearned discounts can put a creditor at risk for antitrust
lawsuits.
True
As time passes, receivables gain value.
False
Direct credit investigations usually refer to acquiring information from third-party
sources that are in the business of preparing information on companies.
False
, Third party sources of credit information exist because gathering credit
information directly can be time consuming.
True
The exchange of credit experience information is legal and proper, but the
information exchanged must be restricted to factual, historical data.
True
The Fair Credit Reporting Act prohibits a business credit grantor from
discriminating when extending credit.
False
A customer's non-functioning website may be a red flag.
True
Industry credit groups are a key component of any direct investigation.
False
