CFP Financial Analysis & Reporting 3

Question 1

A crypto exchange must mark its digital asset inventory to market daily. This accounting treatment is best described as:

Accepted Answer

Fair value accounting through profit or loss

Answer

Digital assets held as inventory are typically measured at fair value through profit or loss, reflecting real-time market prices.

Question 2

A Buy Now Pay Later (BNPL) provider classifies merchant discount revenue separately from consumer late fees. This practice reflects which reporting principle?

Accepted Answer

Disaggregation of revenue streams under ASC 606

Answer

ASC 606 requires companies to disaggregate revenue into categories that depict how the nature, amount, and timing of revenue differ.

Question 3

When analyzing a fintech's burn rate, an investor calculates the company has $12M in cash and burns $800K per month. What is the runway?

Accepted Answer

15 months

Answer

$12M ÷ $800K/month = 15 months of runway before the company exhausts its cash reserves.

Question 4

In a peer-to-peer lending platform's financial statements, provisions for loan losses are recorded to account for:

Accepted Answer

Estimated credit losses on the current loan portfolio

Answer

Loan loss provisions estimate the expected credit losses on the outstanding portfolio under CECL or similar frameworks.

Question 5

A digital bank's net interest margin (NIM) declined from 4.2% to 3.6% year-over-year. Which scenario most likely explains this?

Accepted Answer

Funding costs rose faster than the yield on earning assets

Answer

NIM compresses when the cost of liabilities (deposits, borrowings) rises more quickly than the yield earned on loans and investments.

(CFP) Certified Fintech Practitioner Practice Test

(CFP) Certified Fintech Practitioner Practice Test

CFP Financial Analysis & Reporting 3