FMVA (CFI) FINANCIAL MODELING & VALUATION ANALYST EXAM PREP BUNDLE 2026 | COMPLETE FINAL EXAM STUDY GUIDE WITH VERIFIED QUESTIONS & DETAILED RATIONALES

FMVA (CFI) FINANCIAL MODELING &
VALUATION ANALYST EXAM PREP BUNDLE
2026 | COMPLETE FINAL EXAM STUDY GUIDE
WITH VERIFIED QUESTIONS & DETAILED
RATIONALES

FMVA (CFI) FINANCIAL MODELING & VALUATION ANALYST EXAM PREP
BUNDLE 2026 | COMPLETE FINAL EXAM STUDY GUIDE

This study guide contains 300 verified exam-style questions with detailed EXPERT
RATIONALEs to help you master the FMVA certification. Work through each question
carefully, review every EXPERT RATIONALE — even for questions you get right — and
focus extra time on any topic where you miss two or more in a row.



SECTION 1: FINANCIAL STATEMENTS & ACCOUNTING FUNDAMENTALS


Question 1: Which financial statement shows a company's financial position at a
specific point in time?

A. Income Statement

B. Cash Flow Statement

C. Balance Sheet

D. Statement of Retained Earnings

E. Statement of Comprehensive Income

CORRECT ANSWER: C. Balance Sheet EXPERT RATIONALE: The Balance Sheet
presents a snapshot of a company's assets, liabilities, and shareholders' equity at a
specific date. Unlike the Income Statement or Cash Flow Statement, which cover a
period of time, the Balance Sheet reflects what the company owns and owes at one
point in time.



Question 2: Which accounting equation correctly represents the balance sheet?

A. Assets = Liabilities − Shareholders' Equity
B. Assets − Liabilities = Shareholders' Equity + Debt

,C. Assets + Equity = Liabilities

D. Assets = Liabilities + Shareholders' Equity

E. Revenue − Expenses = Assets

CORRECT ANSWER: D. Assets = Liabilities + Shareholders' Equity EXPERT
RATIONALE: The fundamental accounting equation is Assets = Liabilities +
Shareholders' Equity. This equation must always balance, meaning every transaction
affects at least two accounts to maintain equilibrium.



Question 3: Depreciation appears on which of the following financial statements?

A. Balance Sheet only

B. Cash Flow Statement only

C. Statement of Retained Earnings only
D. Balance Sheet and Statement of Retained Earnings only

E. Income Statement, Balance Sheet, and Cash Flow Statement

CORRECT ANSWER: E. Income Statement, Balance Sheet, and Cash Flow
Statement EXPERT RATIONALE: Depreciation reduces net income on the Income
Statement, reduces the book value of assets on the Balance Sheet (via accumulated
depreciation), and is added back as a non-cash item in the operating section of the
Cash Flow Statement.


Question 4: Which of the following is classified as a current asset?

A. Goodwill
B. Property, Plant & Equipment

C. Long-term Investments

D. Accounts Receivable

E. Deferred Tax Liability

CORRECT ANSWER: D. Accounts Receivable EXPERT RATIONALE: Current
assets are assets expected to be converted to cash within one year. Accounts
Receivable represents money owed to the company by customers and is typically
collected within the operating cycle, making it a current asset.

,Question 5: Under GAAP, which inventory costing method is NOT permitted under
IFRS?

A. FIFO

B. Weighted Average Cost

C. Specific Identification

D. Moving Average Cost

E. LIFO

CORRECT ANSWER: E. LIFO EXPERT RATIONALE: LIFO (Last-In, First-Out) is
permitted under U.S. GAAP but is prohibited under IFRS. IFRS allows FIFO, Weighted
Average Cost, and Specific Identification as acceptable inventory costing methods.


Question 6: Which of the following best describes accrual accounting?

A. Revenue is recorded only when cash is received

B. Expenses are recorded only when cash is paid

C. Transactions are recorded when cash changes hands

D. Revenue and expenses are matched to the period they relate to regardless of cash
movement

E. Revenue is recognized when earned and expenses when incurred, regardless
of cash flow

CORRECT ANSWER: E. Revenue is recognized when earned and expenses
when incurred, regardless of cash flow EXPERT RATIONALE: Accrual accounting
requires recognizing revenue when it is earned and expenses when they are incurred,
matching them to the correct accounting period, irrespective of when actual cash is
received or paid.


Question 7: Which line item is found on the Income Statement but NOT directly on the
Cash Flow Statement?

A. Taxes
B. Capital Expenditures

, C. Depreciation

D. Amortization of Intangibles

E. Net Income

CORRECT ANSWER: D. Amortization of Intangibles EXPERT RATIONALE:
Amortization of intangibles is a non-cash expense recorded on the Income Statement
that reduces pre-tax income. On the Cash Flow Statement, it is added back as a non-
cash adjustment — it does not appear as its own direct line item in cash terms.



Question 8: Which of the following would increase a company's net income but NOT its
operating cash flow?

A. Increase in accounts payable

B. Decrease in accounts receivable

C. Increase in revenue collected in cash

D. Decrease in operating expenses

E. Gain on sale of an asset

CORRECT ANSWER: E. Gain on sale of an asset EXPERT RATIONALE: A gain on
sale of an asset increases net income but is removed from operating cash flow and
reclassified to investing activities. It therefore increases net income without increasing
operating cash flow.


Question 9: Deferred revenue is classified as which of the following?

A. An asset because it represents future revenue
B. An equity item because it increases book value

C. A contra-revenue account

D. A long-term investment

E. A liability because the service or product has not yet been delivered

CORRECT ANSWER: E. A liability because the service or product has not yet
been delivered EXPERT RATIONALE: Deferred revenue represents cash received
from customers before the company has delivered goods or services. It is recorded as a
liability because the company still has an obligation to perform.