1
CFI CBCA CORE COURSE EXAM QUESTIONS
AND VERIFIED ANSWERS 2025/2026
What line item is not found in the statement of shareholders' equity? - correct-
answer -Debt issued or repurchased
What is not true about a partnership? - correct-answer -Partners cannot be held
liable for a debt
Which line item usually accounts for direct labor? - correct-answer -Cost of goods
sold
Select the statements below which are true. Select all that apply. - correct-answer
-Depreciation and amortization are non-cash expenses; A company can be
profitable but experience negative cash flows
What are the 4 types of audit opinions? - correct-answer -Adverse, unqualified,
qualified, and disclaimer of opinion
Which of the following statements regarding a review engagement is false? -
correct-answer -A review engagement is used for financial statements prepared
for internal use
, 2
Select the following key lending ratios used to evaluate the financial capacity of a
business (select all that apply). - correct-answer -Debt to equity ratio; Working
capital ratio
Which of the following tools is NOT used to analyze a company? - correct-answer -
Porter's five forces
Which of the following tools are used to analyze a company? - correct-answer -
Firm lifecycle, Ansoff's matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: -
correct-answer -Economic factors
Read the following passage and determine which of the PESTEL factors the
described business is facing:
Fresh and Co. is a local grocery store operating in a small town in Seattle since
2010. The store sells fresh vegetables, fruits, meat, dairy, and other packaged
products. In recent years, people in the neighborhood have shown increasing
demand for organic farm products. In response, many other grocery stores and
supermarkets have started selling organic vegetables and fruits grown by local US
farmers. - correct-answer -Social factors
Read the following passage and determine which of the PESTEL factors the
described business is facing:
Mountain Transportation is a trucking company that provides in-door deliveries of
electronic products purchased through large consumer electronics retailers in the
US. Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the
company regarding a violation of the Hours of Service regulations for commercial
, 3
drivers. Shawn claims that he has been forced to work over 70 hours for the past
couple weeks, due to a high volume of customer orders. According to the Hours of
Service regulations, all commercial drivers may not drive after 60 hours on duty in
7 consecutive days and may only restart after taking 34 or more consecutive hours
off duty.
(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-
service-regulations) - correct-answer -Legal factors
When competition within an industry is high, which of the following is most likely
to be true? - correct-answer -Buyers have high bargaining power
Which of the following is most likely true for companies at the maturity stage of
the industry lifecycle? - correct-answer -Sales > Cash Flow > Profit
According to the growth/share matrix, companies at maturity have: - correct-
answer -Low market growth and high market share
At which stage of the firm lifecycle would a company most likely have high
business risk, low financial risk, and generate neutral net cash flow? - correct-
answer -Growth
Read the following passage and determine which of the following strategies the
business uses in creating solid relationship with its customers.
Innovation Co. is an international smartphone manufacturer which currently holds
more than 15% of global smartphone market share. One of the superior product
features it offers (seamless integration with any smart devices including
televisions, smart home electronics, and home assistance) is the selling point of
the company's latest smartphone series, creating a huge competitive advantage
, 4
over its competitors. This premium feature also allows Innovation Co. to charge an
above-average price while maintaining a loyal customer base. - correct-answer -
Best product
Which of the following strategies describes a company's attempt to enter into new
markets with its existing products? - correct-answer -Market development
Which of the following strategies describes a company's attempt to enter into new
markets with new products? - correct-answer -Diversification
According to the course, which is the most important section of the business
plan? - correct-answer -Executive Summary
In which section of a business plan can you find the name of the company's
lawyer? Select the best answer. - correct-answer -Company Description
Which SMART component is the following goal missing? In 2020, Company ABC's
Canadian operations generated $90M of revenue, and in 2021 the Canadian
operations generated $98M of revenue. Their goal is to achieve $100M of revenue
in their Canadian operations in the near future. - correct-answer -Timely
Where would you most likely find information regarding the hierarchical or flat
structure of the organization? Select the best answer. - correct-answer -
Management and Operations
What is a benefit of having a small number of suppliers for a company's products?
- correct-answer -Better relationship which can result in better repayment terms
CFI CBCA CORE COURSE EXAM QUESTIONS
AND VERIFIED ANSWERS 2025/2026
What line item is not found in the statement of shareholders' equity? - correct-
answer -Debt issued or repurchased
What is not true about a partnership? - correct-answer -Partners cannot be held
liable for a debt
Which line item usually accounts for direct labor? - correct-answer -Cost of goods
sold
Select the statements below which are true. Select all that apply. - correct-answer
-Depreciation and amortization are non-cash expenses; A company can be
profitable but experience negative cash flows
What are the 4 types of audit opinions? - correct-answer -Adverse, unqualified,
qualified, and disclaimer of opinion
Which of the following statements regarding a review engagement is false? -
correct-answer -A review engagement is used for financial statements prepared
for internal use
, 2
Select the following key lending ratios used to evaluate the financial capacity of a
business (select all that apply). - correct-answer -Debt to equity ratio; Working
capital ratio
Which of the following tools is NOT used to analyze a company? - correct-answer -
Porter's five forces
Which of the following tools are used to analyze a company? - correct-answer -
Firm lifecycle, Ansoff's matrix, SWOT analysis
In assessing the PESTEL factors, consumer disposable income is an example of: -
correct-answer -Economic factors
Read the following passage and determine which of the PESTEL factors the
described business is facing:
Fresh and Co. is a local grocery store operating in a small town in Seattle since
2010. The store sells fresh vegetables, fruits, meat, dairy, and other packaged
products. In recent years, people in the neighborhood have shown increasing
demand for organic farm products. In response, many other grocery stores and
supermarkets have started selling organic vegetables and fruits grown by local US
farmers. - correct-answer -Social factors
Read the following passage and determine which of the PESTEL factors the
described business is facing:
Mountain Transportation is a trucking company that provides in-door deliveries of
electronic products purchased through large consumer electronics retailers in the
US. Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the
company regarding a violation of the Hours of Service regulations for commercial
, 3
drivers. Shawn claims that he has been forced to work over 70 hours for the past
couple weeks, due to a high volume of customer orders. According to the Hours of
Service regulations, all commercial drivers may not drive after 60 hours on duty in
7 consecutive days and may only restart after taking 34 or more consecutive hours
off duty.
(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-
service-regulations) - correct-answer -Legal factors
When competition within an industry is high, which of the following is most likely
to be true? - correct-answer -Buyers have high bargaining power
Which of the following is most likely true for companies at the maturity stage of
the industry lifecycle? - correct-answer -Sales > Cash Flow > Profit
According to the growth/share matrix, companies at maturity have: - correct-
answer -Low market growth and high market share
At which stage of the firm lifecycle would a company most likely have high
business risk, low financial risk, and generate neutral net cash flow? - correct-
answer -Growth
Read the following passage and determine which of the following strategies the
business uses in creating solid relationship with its customers.
Innovation Co. is an international smartphone manufacturer which currently holds
more than 15% of global smartphone market share. One of the superior product
features it offers (seamless integration with any smart devices including
televisions, smart home electronics, and home assistance) is the selling point of
the company's latest smartphone series, creating a huge competitive advantage
, 4
over its competitors. This premium feature also allows Innovation Co. to charge an
above-average price while maintaining a loyal customer base. - correct-answer -
Best product
Which of the following strategies describes a company's attempt to enter into new
markets with its existing products? - correct-answer -Market development
Which of the following strategies describes a company's attempt to enter into new
markets with new products? - correct-answer -Diversification
According to the course, which is the most important section of the business
plan? - correct-answer -Executive Summary
In which section of a business plan can you find the name of the company's
lawyer? Select the best answer. - correct-answer -Company Description
Which SMART component is the following goal missing? In 2020, Company ABC's
Canadian operations generated $90M of revenue, and in 2021 the Canadian
operations generated $98M of revenue. Their goal is to achieve $100M of revenue
in their Canadian operations in the near future. - correct-answer -Timely
Where would you most likely find information regarding the hierarchical or flat
structure of the organization? Select the best answer. - correct-answer -
Management and Operations
What is a benefit of having a small number of suppliers for a company's products?
- correct-answer -Better relationship which can result in better repayment terms
