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CFI FMVA (ACTUAL 2025/2026) QUESTIONS WITH
100% CORRECT ANSWERS
Income statement accounting - (answer)Accrual - revenues & costs recorded as a
business earns or incurs them, not as it receives and pays money
It includes them in the relevant period's income statement and matches them as
closely as possible
CF makes no difference whatsoever - IS where sale happens
=> How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY OF
GOOD/SERVICE PERFORMED
Why are profits and cash flow not the same thing? - (answer)Accounting
differences
The idea of matching over time - (answer)
CFS Accounting - (answer)Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - (answer)record income and expenditures at the time
the money changes hands
Cash accounting method - (answer)An accounting method in which income and
expenditures are recorded at the time the money changes hands.
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Accrual Accounting - (answer)recording in each fiscal period applicable expenses,
whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - (answer)reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - (answer)the method of accounting that recognizes
revenue when it is earned and matches expenses to the revenues they helped
produce
Accrual Basis Accounting - (answer)Accounting basis in which companies record,
in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - (answer)expenses incurred in one fiscal period but not paid
until a later fiscal period
accrued expenses - (answer)expenses incurred but not yet paid in cash or
recorded
Cash flow from operating activities - (answer)The net amount of cash provided
from operating activities.
cash flow from financing activities - (answer)
,3|Page
The idea of matching over time - (answer)
CFS Accounting - (answer)Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - (answer)record income and expenditures at the time
the money changes hands
Cash accounting method - (answer)An accounting method in which income and
expenditures are recorded at the time the money changes hands.
Accrual Accounting - (answer)recording in each fiscal period applicable expenses,
whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - (answer)reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - (answer)the method of accounting that recognizes
revenue when it is earned and matches expenses to the revenues they helped
produce
, 4|Page
Accrual Basis Accounting - (answer)Accounting basis in which companies record,
in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - (answer)expenses incurred in one fiscal period but not paid
until a later fiscal period
accrued expenses - (answer)expenses incurred but not yet paid in cash or
recorded
Cash flow from operating activities - (answer)The net amount of cash provided
from operating activities.
cash flow from financing activities - (answer)The section of the statement of cash
flows that reports cash flows from transactions affecting the equity and debt of
the business.
cash flow from financing activities - (answer)items related to debt, dividends, and
issuing or repurchasing shares
cash flow from investing activities - (answer)The section of the statement of cash
flows that reports cash flows from transactions affecting investments in
noncurrent assets.
CFI FMVA (ACTUAL 2025/2026) QUESTIONS WITH
100% CORRECT ANSWERS
Income statement accounting - (answer)Accrual - revenues & costs recorded as a
business earns or incurs them, not as it receives and pays money
It includes them in the relevant period's income statement and matches them as
closely as possible
CF makes no difference whatsoever - IS where sale happens
=> How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY OF
GOOD/SERVICE PERFORMED
Why are profits and cash flow not the same thing? - (answer)Accounting
differences
The idea of matching over time - (answer)
CFS Accounting - (answer)Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - (answer)record income and expenditures at the time
the money changes hands
Cash accounting method - (answer)An accounting method in which income and
expenditures are recorded at the time the money changes hands.
,2|Page
Accrual Accounting - (answer)recording in each fiscal period applicable expenses,
whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - (answer)reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - (answer)the method of accounting that recognizes
revenue when it is earned and matches expenses to the revenues they helped
produce
Accrual Basis Accounting - (answer)Accounting basis in which companies record,
in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - (answer)expenses incurred in one fiscal period but not paid
until a later fiscal period
accrued expenses - (answer)expenses incurred but not yet paid in cash or
recorded
Cash flow from operating activities - (answer)The net amount of cash provided
from operating activities.
cash flow from financing activities - (answer)
,3|Page
The idea of matching over time - (answer)
CFS Accounting - (answer)Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method - (answer)record income and expenditures at the time
the money changes hands
Cash accounting method - (answer)An accounting method in which income and
expenditures are recorded at the time the money changes hands.
Accrual Accounting - (answer)recording in each fiscal period applicable expenses,
whether paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - (answer)reporting income when it is earned and
expenses when they are incurred
Accrual Basis Accounting - (answer)the method of accounting that recognizes
revenue when it is earned and matches expenses to the revenues they helped
produce
, 4|Page
Accrual Basis Accounting - (answer)Accounting basis in which companies record,
in the periods in which the events occur, transactions that change a company's
financial statements, even if cash was not exchanged.
accrued expenses - (answer)expenses incurred in one fiscal period but not paid
until a later fiscal period
accrued expenses - (answer)expenses incurred but not yet paid in cash or
recorded
Cash flow from operating activities - (answer)The net amount of cash provided
from operating activities.
cash flow from financing activities - (answer)The section of the statement of cash
flows that reports cash flows from transactions affecting the equity and debt of
the business.
cash flow from financing activities - (answer)items related to debt, dividends, and
issuing or repurchasing shares
cash flow from investing activities - (answer)The section of the statement of cash
flows that reports cash flows from transactions affecting investments in
noncurrent assets.
