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Free CDFM Practice Questions

10 free, exam-style Certified Defense Financial Manager (CDFM) practice questions with answers and explanations. No signup required. Work through them below, then take the full free CDFM practice test to study every exam domain.

Question 1

A base commander wants to use O&M funds to purchase a $500,000 generator. The financial advisor should advise that:

  1. O&M funds are appropriate for equipment purchases when the unit cost exceeds the expense/investment threshold
  2. The generator exceeds the expense/investment threshold and should be funded with procurement appropriations
  3. O&M funds can be used for any equipment purchase under $1 million regardless of the expense threshold
  4. The commander should use military construction appropriations since generators are considered infrastructure improvements
Show answer & explanation

Correct answer: B - The generator exceeds the expense/investment threshold and should be funded with procurement appropriations

Question 2

Which of the following scenarios represents a segregation of duties violation?

  1. One person initiates purchase requests while another approves them
  2. Separate employees handle receiving and accounts payable
  3. A supervisor reviews and approves subordinate expense reports
  4. The same individual who approves vendor invoices also signs disbursement checks
Show answer & explanation

Correct answer: D - The same individual who approves vendor invoices also signs disbursement checks

Question 3

A project has PV = $400K, EV = $450K, AC = $430K. This project is:

  1. Over budget and behind schedule
  2. Under budget and ahead of schedule
  3. Over budget but ahead of schedule
  4. Under budget but behind schedule
Show answer & explanation

Correct answer: B - Under budget and ahead of schedule

Question 4

The correct hierarchical order of strategic documents in the PPBE Planning phase is:

  1. DPG → NDS → NSS → NMS
  2. NSS → NDS → NMS → DPG
  3. NMS → NSS → DPG → NDS
  4. DPG → NSS → NMS → NDS
Show answer & explanation

Correct answer: B - NSS → NDS → NMS → DPG

Question 5

A program office has FY2025 O&M funds and wants to purchase office supplies that will be delivered and used in FY2026. Under the Bona Fide Needs Rule, this purchase:

  1. Is problematic because the need arises in FY2026, not FY2025, and O&M is a one-year appropriation
  2. Is permissible because the supplies support ongoing operations regardless of delivery date
  3. Is permissible if the contract includes a clause specifying the funds' fiscal year limitation
  4. Requires advance approval from the contracting officer and documentation of operational necessity
Show answer & explanation

Correct answer: A - Is problematic because the need arises in FY2026, not FY2025, and O&M is a one-year appropriation

Question 6

A civilian financial manager approves an obligation that exceeds the sub-allotment. The manager claims ignorance of the sub-allotment limit. This:

  1. Excuses the violation since intent was not present
  2. Means no violation occurred
  3. Does not excuse the administrative violation but criminal penalties require intent
  4. Results in automatic criminal prosecution
Show answer & explanation

Correct answer: C - Does not excuse the administrative violation but criminal penalties require intent

Question 7

A program manager receives an EVM report showing CPI = 0.75 at 30% project completion. Based on the DoD 10% rule, the MOST LIKELY outcome is:

  1. CPI will remain near 0.75 for the remainder of the project
  2. CPI will significantly improve to above 1.0 by project completion
  3. CPI will decline further to approximately 0.50
  4. CPI data at 30% completion is not reliable for forecasting
Show answer & explanation

Correct answer: A - CPI will remain near 0.75 for the remainder of the project

Question 8

An auditor identifies a single material error in the cash account but all other accounts are fairly stated. The MOST appropriate opinion is:

  1. Disclaimer of opinion
  2. Adverse opinion
  3. Qualified opinion
  4. Unmodified opinion
Show answer & explanation

Correct answer: C - Qualified opinion

Question 9

An agency receives free legal services from the Department of Justice. Under SFFAS 4, the receiving agency should:

  1. Ignore the cost since no payment was made
  2. Report the cost only if it exceeds $100,000
  3. Record the cost as revenue
  4. Recognize the imputed cost as an inter-entity cost
Show answer & explanation

Correct answer: D - Recognize the imputed cost as an inter-entity cost

Question 10

A finance office pays a vendor 35 days after receipt of a proper invoice for a standard supply order. Under the Prompt Payment Act:

  1. Interest penalties accrue for the 5 days beyond the 30-day requirement
  2. The vendor must request interest penalties in writing
  3. The payment is considered early
  4. No penalty applies because 35 days is within the 45-day window
Show answer & explanation

Correct answer: A - Interest penalties accrue for the 5 days beyond the 30-day requirement

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