CFI ACCOUNTING FUNDAMENTALS
NEWEST EXAM 2025/2026 QUESTIONS
AND DETAILED CORRECT ANSWERS |
A+ GRADE
What are the 3 components of a balance sheet? Correct
Answer Assets = Liabilities + Equity
What are the three components of an income statement?
Correct Answer Revenues
Expenses
Profit or loss
What are the three components of a cash flow statement?
Correct Answer Operating
Investing
Financing
What are the components of Assets on the Balance
sheet? Correct Answer Current - used in a year
Noncurrent - used longer than a year
How are non current assets broken into 2 categories?
Correct Answer Tangible and non tangible
What are the components of Liabilities on the balance
sheet? Correct Answer Current and noncurrent.
,What are retained earnings? Correct Answer Total profit
ever earned - (all losses & dividends)
What are the two ways to balance a balance sheet?
Correct Answer 1. Double entry once on the assets and
once on the liabilities.
2. twice on the same side one as a positive and one as a
negative.
How is an income statement constructed? Correct Answer
Revenue - operating expenses = Gross Profits -Indirect
Operating costs = Operating Income - Cost of debt
financing -Tax =Net Income
What are the 3 components of Expenses on the Income
Statement? Correct Answer General and Administrative
Research and Development
Sales and Marketing
How is Gross Profit calculated? Correct Answer Sales -
COGS
How do you calculate EBIT Correct Answer Gross Profit -
Expenses
What are the usual 3 components of the Current assets on
the balance sheet?
, What are the usual 2 components of the long term
asssets? Correct Answer 1. Cash
2. AR (Accounts Receivable)
3. Inventory
1. Building
2. Machinery
What happens to the balance sheet when a company sells
on credit?
What if it buys inventory on credit? Correct Answer
Increase Share holders Equity Revenue
Increase Current Assets Accounts receivable
Current liabilities increases
Assets Inventory Increases
Where are the AR located on the balance sheet? Correct
Answer Current Assets
What Does a credit mean on balance sheet? Correct
Answer Right.
increases a liability or equity account, or decreases an
asset or expense account.
What does debit mean on the balance sheet? Correct
Answer Left.
increases an asset or expense account, or decreases a
liability or equity account
NEWEST EXAM 2025/2026 QUESTIONS
AND DETAILED CORRECT ANSWERS |
A+ GRADE
What are the 3 components of a balance sheet? Correct
Answer Assets = Liabilities + Equity
What are the three components of an income statement?
Correct Answer Revenues
Expenses
Profit or loss
What are the three components of a cash flow statement?
Correct Answer Operating
Investing
Financing
What are the components of Assets on the Balance
sheet? Correct Answer Current - used in a year
Noncurrent - used longer than a year
How are non current assets broken into 2 categories?
Correct Answer Tangible and non tangible
What are the components of Liabilities on the balance
sheet? Correct Answer Current and noncurrent.
,What are retained earnings? Correct Answer Total profit
ever earned - (all losses & dividends)
What are the two ways to balance a balance sheet?
Correct Answer 1. Double entry once on the assets and
once on the liabilities.
2. twice on the same side one as a positive and one as a
negative.
How is an income statement constructed? Correct Answer
Revenue - operating expenses = Gross Profits -Indirect
Operating costs = Operating Income - Cost of debt
financing -Tax =Net Income
What are the 3 components of Expenses on the Income
Statement? Correct Answer General and Administrative
Research and Development
Sales and Marketing
How is Gross Profit calculated? Correct Answer Sales -
COGS
How do you calculate EBIT Correct Answer Gross Profit -
Expenses
What are the usual 3 components of the Current assets on
the balance sheet?
, What are the usual 2 components of the long term
asssets? Correct Answer 1. Cash
2. AR (Accounts Receivable)
3. Inventory
1. Building
2. Machinery
What happens to the balance sheet when a company sells
on credit?
What if it buys inventory on credit? Correct Answer
Increase Share holders Equity Revenue
Increase Current Assets Accounts receivable
Current liabilities increases
Assets Inventory Increases
Where are the AR located on the balance sheet? Correct
Answer Current Assets
What Does a credit mean on balance sheet? Correct
Answer Right.
increases a liability or equity account, or decreases an
asset or expense account.
What does debit mean on the balance sheet? Correct
Answer Left.
increases an asset or expense account, or decreases a
liability or equity account
