CERTIFIED MANAGEMENT ACCOUNTANT
(CMA) PRACTICE EXAMINATION
QUESTIONS WITH CORRECT ANSWERS AND
RATIONALES
Question 1. Which of the following best describes the primary
role of a management accountant?
A. Preparing financial statements exclusively for external
users
B. Providing information to support planning, decision-making,
and performance management
C. Auditing all transactions for compliance with tax law
D. Setting monetary policy for the organization
Correct Answer: B
,Rationale: Management accountants provide financial and
operational information that supports internal planning,
control, decision-making, and strategic management.
Question 2. Which budget is generally considered the starting
point for the master budgeting process in a manufacturing
company?
A. Cash budget
B. Production budget
C. Sales budget
D. Direct labor budget
Correct Answer: C
Rationale: The sales budget typically provides the foundation
for other operating budgets because expected sales drive
production, purchasing, staffing, and cash-flow estimates.
,Question 3. A company expects sales of 20,000 units.
Beginning finished goods inventory is 3,000 units, and desired
ending finished goods inventory is 4,500 units. How many units
should be produced?
A. 18,500
B. 20,000
C. 21,500
D. 27,500
Correct Answer: C
Rationale: Required production = Expected sales + Desired
ending inventory − Beginning inventory = 20,000 + 4,500 −
3,000 = 21,500 units.
Question 4. Which budget is most useful for estimating
whether a company will have sufficient cash to meet upcoming
obligations?
, A. Cash budget
B. Sales budget
C. Production budget
D. Capital expenditure budget only
Correct Answer: A
Rationale: The cash budget summarizes expected cash
receipts, cash disbursements, financing needs, and anticipated
cash balances.
Question 5. A flexible budget is designed to:
A. Remain unchanged regardless of activity
B. Adjust budgeted revenues and costs for the actual level of
activity
C. Eliminate all fixed costs
D. Replace the company’s strategic plan
(CMA) PRACTICE EXAMINATION
QUESTIONS WITH CORRECT ANSWERS AND
RATIONALES
Question 1. Which of the following best describes the primary
role of a management accountant?
A. Preparing financial statements exclusively for external
users
B. Providing information to support planning, decision-making,
and performance management
C. Auditing all transactions for compliance with tax law
D. Setting monetary policy for the organization
Correct Answer: B
,Rationale: Management accountants provide financial and
operational information that supports internal planning,
control, decision-making, and strategic management.
Question 2. Which budget is generally considered the starting
point for the master budgeting process in a manufacturing
company?
A. Cash budget
B. Production budget
C. Sales budget
D. Direct labor budget
Correct Answer: C
Rationale: The sales budget typically provides the foundation
for other operating budgets because expected sales drive
production, purchasing, staffing, and cash-flow estimates.
,Question 3. A company expects sales of 20,000 units.
Beginning finished goods inventory is 3,000 units, and desired
ending finished goods inventory is 4,500 units. How many units
should be produced?
A. 18,500
B. 20,000
C. 21,500
D. 27,500
Correct Answer: C
Rationale: Required production = Expected sales + Desired
ending inventory − Beginning inventory = 20,000 + 4,500 −
3,000 = 21,500 units.
Question 4. Which budget is most useful for estimating
whether a company will have sufficient cash to meet upcoming
obligations?
, A. Cash budget
B. Sales budget
C. Production budget
D. Capital expenditure budget only
Correct Answer: A
Rationale: The cash budget summarizes expected cash
receipts, cash disbursements, financing needs, and anticipated
cash balances.
Question 5. A flexible budget is designed to:
A. Remain unchanged regardless of activity
B. Adjust budgeted revenues and costs for the actual level of
activity
C. Eliminate all fixed costs
D. Replace the company’s strategic plan
