Exam Details

  • Exam Code
    :CFA-LEVEL-1
  • Exam Name
    :CFA Level I - Chartered Financial Analyst
  • Certification
    :CFA Institute Certifications
  • Vendor
    :CFA Institute
  • Total Questions
    :3960 Q&As
  • Last Updated
    :Jul 07, 2025

CFA Institute CFA Institute Certifications CFA-LEVEL-1 Questions & Answers

  • Question 1971:

    A firm has a constant pre-depreciation income using assets that last 5 years. The straight-line method results in a rate of return that ________ over the life of the assets. The accelerated methods result in a rate of return that ________ over the life of the assets.

    A. increases, increases

    B. decreases, increases

    C. decreases, decreases

    D. increases, decreases

  • Question 1972:

    Which combination leads to the lowest income tax paid in earlier years of a firm?

    Inventory valuationDepreciation

    I.FIFOStraight-line II.LIFOStraight-line III.FIFODouble Declining IV.LIFODouble Declining

    A. IV.

    B. II.

    C. I.

    D. III.

  • Question 1973:

    Which of the following would not be a limitation of the balance sheet?

    A. Long-lived assets may not reflect their market value because they are stated at historical cost.

    B. Significant assets and liabilities may be omitted because GAAP does not require their inclusion.

    C. GAAP permits companies to delay recognition of value changes, such as employee benefit plans.

    D. Some assets and liabilities are carried at historical cost bearing little relationship to their real market value.

    E. The firm's market value would not be able to be estimated due to historical costing.

  • Question 1974:

    At December 31, 1996, Eaton Corp. reported $1,750,000 of appropriated retained earnings for the construction of a new office building, which was completed in 1997 at a cost of $1,500,000. In 1997, Eaton appropriated $1,200,000 of retained earnings for the construction of a new plant. Also, $2,000,000 of cash was restricted for the retirement of bonds due in 1998. In its 1997 balance sheet, what amount should Eaton report as appropriated retained earnings?

    A. $2,950,000

    B. $3,200,000

    C. $1,450,000

    D. $1,750,000

    E. $1,200,000

  • Question 1975:

    Under an inflationary environment with a constant inventory quantity, the LIFO Reserve tends to ________.

    A. increase over time.

    B. decrease over time.

    C. stays constant over time.

    D. fluctuate with COGS.

  • Question 1976:

    The amount by which a plant asset depreciated is classified as

    A. a liability

    B. an asset

    C. an expense

    D. revenue

  • Question 1977:

    In practice, companies who use the direct method in presenting cash flows from operations:

    A. must also disclose cash flows from operations using the indirect method.

    B. must classify interest paid as an investing activity.

    C. must be privately held or closely held corporations.

    D. are not required to report cash flows not incurred during the ordinary course of business.

  • Question 1978:

    When a plant asset is sold for more than its book value

    A. book value of the asset minus gain on disposal equals cash received

    B. cash received plus accumulated depreciation plus gain on disposal equals the original cost

    C. original cost minus accumulated depreciation equals cash received plus gain on disposal

    D. cash received plus accumulated depreciation minus gain on disposal equals the original cost

  • Question 1979:

    When an auditor finds that the audit is insufficient in scope to render an opinion, he will issue ________.

    A. an unqualified opinion

    B. an adverse opinion

    C. a qualified opinion

    D. a disclaimer of opinion

  • Question 1980:

    Which of the following is NOT a measure of a firm's liquidity?

    A. interest coverage

    B. inventory turnover

    C. quick ratio

    D. receivables turnover

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