CERTIFIED MANAGEMENT ACCOUNTANT (CMA) EXAMINATION
NEWEST 2025 – 2026 QUESTIONS FROM ACTUAL EXAMS COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND NEW!!
Exam Board Content Coverage
1. External Financial Reporting Decisions
2. Planning, Budgeting, and Forecasting
3. Performance Management
4. Cost Management
5. Internal Controls
6. Technology and Analytics
Answer all questions
1. Which of the following financial statements reports a company’s financial position at a
specific point in time?
A. Income statement
B. Statement of cash flows
C. Statement of retained earnings
D. Balance sheet
Answer: D. Balance sheet
The balance sheet shows assets, liabilities, and equity at a specific date.
2. Which budget is typically prepared first in the budgeting process?
A. Cash budget
B. Production budget
C. Sales budget
D. Capital budget
Answer: C. Sales budget
The sales budget drives all other budgets because it forecasts revenue.
3. A flexible budget adjusts for changes in:
A. Fixed costs
B. Production volume
C. Historical data
, D. Accounting policies
Answer: B. Production volume
A flexible budget recalculates costs based on actual activity levels.
4. Which variance measures the efficiency of labor usage?
A. Labor rate variance
B. Labor efficiency variance
C. Material price variance
D. Sales variance
Answer: B. Labor efficiency variance
It compares actual hours worked to standard hours allowed.
5. Contribution margin is defined as:
A. Sales minus fixed costs
B. Sales minus variable costs
C. Sales minus total expenses
D. Net income before taxes
Answer: B. Sales minus variable costs
Contribution margin shows how much revenue contributes to covering fixed costs.
6. Which costing method assigns overhead based on activities?
A. Job costing
B. Process costing
C. Activity-based costing
D. Standard costing
Answer: C. Activity-based costing
ABC allocates overhead based on cost drivers.
7. Break-even point occurs when:
A. Revenue exceeds expenses
B. Profit is maximized
C. Total revenue equals total cost
D. Variable costs are zero
Answer: C. Total revenue equals total cost
At break-even, there is no profit or loss.
8. Which internal control principle separates responsibilities?
A. Authorization
, B. Segregation of duties
C. Documentation
D. Monitoring
Answer: B. Segregation of duties
It reduces fraud risk by dividing responsibilities.
9. A favorable variance means:
A. Costs are higher than expected
B. Revenues are lower than expected
C. Performance exceeded expectations
D. Budget was incorrect
Answer: C. Performance exceeded expectations
A favorable variance improves profit.
10. Which method values inventory at most recent cost?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
Answer: B. LIFO
Last-in, first-out uses the most recent costs first.
11. Operating income equals:
A. Revenue minus cost of goods sold
B. Revenue minus operating expenses
C. Gross profit minus operating expenses
D. Net income plus taxes
Answer: C. Gross profit minus operating expenses
Operating income excludes non-operating items.
12. Which ratio measures liquidity?
A. Debt-to-equity
B. Current ratio
C. Return on equity
D. Asset turnover
Answer: B. Current ratio
It measures ability to meet short-term obligations.
NEWEST 2025 – 2026 QUESTIONS FROM ACTUAL EXAMS COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND NEW!!
Exam Board Content Coverage
1. External Financial Reporting Decisions
2. Planning, Budgeting, and Forecasting
3. Performance Management
4. Cost Management
5. Internal Controls
6. Technology and Analytics
Answer all questions
1. Which of the following financial statements reports a company’s financial position at a
specific point in time?
A. Income statement
B. Statement of cash flows
C. Statement of retained earnings
D. Balance sheet
Answer: D. Balance sheet
The balance sheet shows assets, liabilities, and equity at a specific date.
2. Which budget is typically prepared first in the budgeting process?
A. Cash budget
B. Production budget
C. Sales budget
D. Capital budget
Answer: C. Sales budget
The sales budget drives all other budgets because it forecasts revenue.
3. A flexible budget adjusts for changes in:
A. Fixed costs
B. Production volume
C. Historical data
, D. Accounting policies
Answer: B. Production volume
A flexible budget recalculates costs based on actual activity levels.
4. Which variance measures the efficiency of labor usage?
A. Labor rate variance
B. Labor efficiency variance
C. Material price variance
D. Sales variance
Answer: B. Labor efficiency variance
It compares actual hours worked to standard hours allowed.
5. Contribution margin is defined as:
A. Sales minus fixed costs
B. Sales minus variable costs
C. Sales minus total expenses
D. Net income before taxes
Answer: B. Sales minus variable costs
Contribution margin shows how much revenue contributes to covering fixed costs.
6. Which costing method assigns overhead based on activities?
A. Job costing
B. Process costing
C. Activity-based costing
D. Standard costing
Answer: C. Activity-based costing
ABC allocates overhead based on cost drivers.
7. Break-even point occurs when:
A. Revenue exceeds expenses
B. Profit is maximized
C. Total revenue equals total cost
D. Variable costs are zero
Answer: C. Total revenue equals total cost
At break-even, there is no profit or loss.
8. Which internal control principle separates responsibilities?
A. Authorization
, B. Segregation of duties
C. Documentation
D. Monitoring
Answer: B. Segregation of duties
It reduces fraud risk by dividing responsibilities.
9. A favorable variance means:
A. Costs are higher than expected
B. Revenues are lower than expected
C. Performance exceeded expectations
D. Budget was incorrect
Answer: C. Performance exceeded expectations
A favorable variance improves profit.
10. Which method values inventory at most recent cost?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
Answer: B. LIFO
Last-in, first-out uses the most recent costs first.
11. Operating income equals:
A. Revenue minus cost of goods sold
B. Revenue minus operating expenses
C. Gross profit minus operating expenses
D. Net income plus taxes
Answer: C. Gross profit minus operating expenses
Operating income excludes non-operating items.
12. Which ratio measures liquidity?
A. Debt-to-equity
B. Current ratio
C. Return on equity
D. Asset turnover
Answer: B. Current ratio
It measures ability to meet short-term obligations.
