FMVA EXAM AND PRACTICE EXAM NEWEST 2025 TEST
BANK| FINANCIAL MODELING & VALUATION
ANALYST FINAL EXAM PREP WITH COMPLETE 400
REAL EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) ALREADY GRADED A+
(BRAND NEW!!)
1. Where would 'Accounts Payable' most likely appear on a set
of financial statements?
A) On the income statement under operating expenses
B) On the balance sheet under current assets
C) On the balance sheet under current liabilities
D) On the cash flow statement under financing activities
Correct Answer: C
Rationale: Accounts payable represents short-term obligations to
1
,suppliers and is classified as a current liability on the balance
sheet .
2. Which is NOT a type of note found in a set of financial
statements?
A) Significant accounting policies
B) Contingent liabilities
C) Significant internal controls
D) Subsequent events
Correct Answer: C
Rationale: Significant internal controls are discussed in management
reports or audit opinions, not in the financial statement notes .
3. Which financial statement reflects a company's cash inflows
and outflows during a period?
A) Income Statement
B) Balance Sheet
2
,C) Cash Flow Statement
D) Statement of Shareholders' Equity
Correct Answer: C
Rationale: The Cash Flow Statement tracks cash generated and
used in operating, investing, and financing activities .
4. Under double-entry bookkeeping, which entry correctly
records a cash sale of 5,000𝑓𝑜𝑟𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦𝑠𝑜𝑙𝑑𝑎𝑡𝑐𝑜𝑠𝑡3,000?
A) Debit Cash 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝑅𝑒𝑣𝑒𝑛𝑢𝑒5,000; Debit Cost of
Goods Sold 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦3,000
B) Debit Cash 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦5,000; Debit
Revenue 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐶𝑜𝑠𝑡𝑜𝑓𝐺𝑜𝑜𝑑𝑠𝑆𝑜𝑙𝑑3,000
C) Debit Revenue 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐶𝑎𝑠ℎ5,000; Debit
Inventory 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐶𝑜𝑠𝑡𝑜𝑓𝐺𝑜𝑜𝑑𝑠𝑆𝑜𝑙𝑑3,000
D) Debit Cash 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝑅𝑒𝑣𝑒𝑛𝑢𝑒3,000; Debit Cost of
Goods Sold 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦5,000
3
, Correct Answer: A
Rationale: Sales generate cash (debit Cash) and revenue (credit
Revenue). The cost of inventory is removed from assets (credit
Inventory) and recorded as expense (debit COGS) .
5. Which ratio would you use to determine the profitability of
the goods sold by a company?
A) Net Profit Margin
B) Gross Profit Margin
C) Return on Equity
D) Operating Margin
Correct Answer: B
Rationale: Gross Profit Margin = (Revenue – COGS)/Revenue,
measuring profitability directly from goods sold before operating
expenses .
6. Horizontal analysis allows us to analyze performance over:
A) A single period
4
BANK| FINANCIAL MODELING & VALUATION
ANALYST FINAL EXAM PREP WITH COMPLETE 400
REAL EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) ALREADY GRADED A+
(BRAND NEW!!)
1. Where would 'Accounts Payable' most likely appear on a set
of financial statements?
A) On the income statement under operating expenses
B) On the balance sheet under current assets
C) On the balance sheet under current liabilities
D) On the cash flow statement under financing activities
Correct Answer: C
Rationale: Accounts payable represents short-term obligations to
1
,suppliers and is classified as a current liability on the balance
sheet .
2. Which is NOT a type of note found in a set of financial
statements?
A) Significant accounting policies
B) Contingent liabilities
C) Significant internal controls
D) Subsequent events
Correct Answer: C
Rationale: Significant internal controls are discussed in management
reports or audit opinions, not in the financial statement notes .
3. Which financial statement reflects a company's cash inflows
and outflows during a period?
A) Income Statement
B) Balance Sheet
2
,C) Cash Flow Statement
D) Statement of Shareholders' Equity
Correct Answer: C
Rationale: The Cash Flow Statement tracks cash generated and
used in operating, investing, and financing activities .
4. Under double-entry bookkeeping, which entry correctly
records a cash sale of 5,000𝑓𝑜𝑟𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦𝑠𝑜𝑙𝑑𝑎𝑡𝑐𝑜𝑠𝑡3,000?
A) Debit Cash 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝑅𝑒𝑣𝑒𝑛𝑢𝑒5,000; Debit Cost of
Goods Sold 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦3,000
B) Debit Cash 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦5,000; Debit
Revenue 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐶𝑜𝑠𝑡𝑜𝑓𝐺𝑜𝑜𝑑𝑠𝑆𝑜𝑙𝑑3,000
C) Debit Revenue 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐶𝑎𝑠ℎ5,000; Debit
Inventory 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐶𝑜𝑠𝑡𝑜𝑓𝐺𝑜𝑜𝑑𝑠𝑆𝑜𝑙𝑑3,000
D) Debit Cash 3,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝑅𝑒𝑣𝑒𝑛𝑢𝑒3,000; Debit Cost of
Goods Sold 5,000; 𝐶𝑟𝑒𝑑𝑖𝑡𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦5,000
3
, Correct Answer: A
Rationale: Sales generate cash (debit Cash) and revenue (credit
Revenue). The cost of inventory is removed from assets (credit
Inventory) and recorded as expense (debit COGS) .
5. Which ratio would you use to determine the profitability of
the goods sold by a company?
A) Net Profit Margin
B) Gross Profit Margin
C) Return on Equity
D) Operating Margin
Correct Answer: B
Rationale: Gross Profit Margin = (Revenue – COGS)/Revenue,
measuring profitability directly from goods sold before operating
expenses .
6. Horizontal analysis allows us to analyze performance over:
A) A single period
4
