CERTIFIED MANAGEMENT ACCOUNTANT (CMA)
EXAMINATION QUESTIONS AND CORRECT ANSWER
&EXPLANATION|STUDY GUIDE GRADED A+SOUTHERN
NEW HAMPSHIRE UNIVERSITY
1. Management accounting primarily assists:
A. Government regulators
B. Internal management decision-making
C. Customers only
D. External auditors only
Answer: B
Rationale: Management accounting supports internal planning and control.
2. Financial accounting differs from management accounting because financial accounting is
mainly for:
A. Internal employees
B. External users
C. Production workers
D. Marketing teams
Answer: B
Rationale: Financial accounting serves investors, creditors, and regulators.
3. The accounting equation is:
Assets = Liabilities + Owner's\ Equity
A. Assets = Revenue − Expenses
B. Assets = Liabilities + Owner’s Equity
C. Revenue = Assets + Expenses
D. Equity = Revenue − Liabilities
Answer: B
Rationale: Fundamental accounting relationship.
,4. Budgeting is primarily used for:
A. Tax avoidance
B. Planning and control
C. Eliminating expenses
D. Auditing only
Answer: B
Rationale: Budgets guide organizational performance.
5. A master budget combines:
A. Sales only
B. All departmental budgets
C. Payroll only
D. Tax reports only
Answer: B
Rationale: Comprehensive financial planning.
6. A flexible budget adjusts based on:
A. Tax rates
B. Actual activity levels
C. Stock prices
D. Interest rates
Answer: B
Rationale: Flexible budgets adapt to operational changes.
7. Standard costs are:
A. Historical costs only
B. Predetermined expected costs
C. Market values only
D. Tax calculations
Answer: B
Rationale: Used for planning and variance analysis.
, 8. Variance analysis compares:
A. Revenue and taxes
B. Actual results with standards
C. Inventory and liabilities
D. Assets and equity
Answer: B
Rationale: Evaluates performance differences.
9. A favorable variance occurs when:
A. Costs exceed expectations
B. Actual results improve profit
C. Revenue declines
D. Expenses increase unexpectedly
Answer: B
Rationale: Positive financial outcome.
10. An unfavorable variance means:
A. Better-than-expected results
B. Worse-than-expected results
C. No financial impact
D. Tax reduction only
Answer: B
Rationale: Indicates lower performance.
11. Contribution margin equals:
\text{Contribution Margin} = \text{Sales Revenue} - \text{Variable Costs}
A. Revenue − Fixed Costs
B. Sales Revenue − Variable Costs
C. Assets − Liabilities
D. Gross Profit − Taxes
Answer: B
Rationale: Amount available for fixed costs and profit.
EXAMINATION QUESTIONS AND CORRECT ANSWER
&EXPLANATION|STUDY GUIDE GRADED A+SOUTHERN
NEW HAMPSHIRE UNIVERSITY
1. Management accounting primarily assists:
A. Government regulators
B. Internal management decision-making
C. Customers only
D. External auditors only
Answer: B
Rationale: Management accounting supports internal planning and control.
2. Financial accounting differs from management accounting because financial accounting is
mainly for:
A. Internal employees
B. External users
C. Production workers
D. Marketing teams
Answer: B
Rationale: Financial accounting serves investors, creditors, and regulators.
3. The accounting equation is:
Assets = Liabilities + Owner's\ Equity
A. Assets = Revenue − Expenses
B. Assets = Liabilities + Owner’s Equity
C. Revenue = Assets + Expenses
D. Equity = Revenue − Liabilities
Answer: B
Rationale: Fundamental accounting relationship.
,4. Budgeting is primarily used for:
A. Tax avoidance
B. Planning and control
C. Eliminating expenses
D. Auditing only
Answer: B
Rationale: Budgets guide organizational performance.
5. A master budget combines:
A. Sales only
B. All departmental budgets
C. Payroll only
D. Tax reports only
Answer: B
Rationale: Comprehensive financial planning.
6. A flexible budget adjusts based on:
A. Tax rates
B. Actual activity levels
C. Stock prices
D. Interest rates
Answer: B
Rationale: Flexible budgets adapt to operational changes.
7. Standard costs are:
A. Historical costs only
B. Predetermined expected costs
C. Market values only
D. Tax calculations
Answer: B
Rationale: Used for planning and variance analysis.
, 8. Variance analysis compares:
A. Revenue and taxes
B. Actual results with standards
C. Inventory and liabilities
D. Assets and equity
Answer: B
Rationale: Evaluates performance differences.
9. A favorable variance occurs when:
A. Costs exceed expectations
B. Actual results improve profit
C. Revenue declines
D. Expenses increase unexpectedly
Answer: B
Rationale: Positive financial outcome.
10. An unfavorable variance means:
A. Better-than-expected results
B. Worse-than-expected results
C. No financial impact
D. Tax reduction only
Answer: B
Rationale: Indicates lower performance.
11. Contribution margin equals:
\text{Contribution Margin} = \text{Sales Revenue} - \text{Variable Costs}
A. Revenue − Fixed Costs
B. Sales Revenue − Variable Costs
C. Assets − Liabilities
D. Gross Profit − Taxes
Answer: B
Rationale: Amount available for fixed costs and profit.
