1
CMA EXAM PART 1: SECTION A Questions
Primary users of financial statements - Correct Answer-- Existing and
potential investors
- Existing and potential landers and creditors
Secondary users of financial statements - Correct Answer-- Customers
- Employees
- Gov. and Regulatory Agencies
- the general public
Statement of financial position (balance sheet) - Correct Answer-An
accounting statement that records the values of a business's *assets*,
*liabilities* and *shareholders' equity* at one point in time
Income Statement - Correct Answer-A financial statement that reports a
company's revenues and expenses and resulting net income or net loss
for a specific period of time.
Statement of Cash Flows - Correct Answer-Financial statement that
reports cash receipts and disbursements related to a firm's three major
activities: operations, investments, and financing.
Operating Cash Flow (OCF) - Correct Answer-the cash flow a firm
generates from normal operations—from the production and sale of its
goods and services.
1
, 2
investing cash flows - Correct Answer-cash transactions involving
purchase and sale of long-term assets
financing cash flows - Correct Answer-include cash transactions with
lenders, such as borrowing money and repaying debt, and with
stockholders, such as issuing stock and paying dividends
Statement of Comprehensive Income - Correct Answer-An income
statement in which a company also reports other comprehensive
income.
Including:
- foreign currency translation
- gains or losses prior service costs or credits related to a defined
pension plan
- unrealized holding gains or losses on available for sale securities
- the effective portion of the gain or loss on a derivative
statement of stockholders' equity - Correct Answer-Summarizes the
changes in the balance in each stockholders' equity account over a
period of time.
Including:
- capital stock
- APIC
- retained earnings
Assets - Correct Answer-Economic resources (things of value) owned by
a firm for future economic benefits.
2
, 3
Liabilities - Correct Answer-what a company owes
Equity - Correct Answer-the owner's claims to the assets of the business
after deducting liabilities.
Includes:
- issued capital (stock)
- APIC
- retained earnings
- treasury stock
- Accumulated other comprehensive income
current assets - Correct Answer-items that can or will be converted into
cash within one year
Include:
- cash and cash equivalents
- Trade or accounts receivable
- short-term notes receivable
- receivables from loans due
- inventories
- marketable securities
- prepaid expenses
Operating Cycle - Correct Answer-The average time required to
purchase inventory, sell it on account, and then collect cash from
customers—that is, go from cash to cash.
noncurrent assets - Correct Answer-assets that will be used or turned
into cash beyond one year
3
CMA EXAM PART 1: SECTION A Questions
Primary users of financial statements - Correct Answer-- Existing and
potential investors
- Existing and potential landers and creditors
Secondary users of financial statements - Correct Answer-- Customers
- Employees
- Gov. and Regulatory Agencies
- the general public
Statement of financial position (balance sheet) - Correct Answer-An
accounting statement that records the values of a business's *assets*,
*liabilities* and *shareholders' equity* at one point in time
Income Statement - Correct Answer-A financial statement that reports a
company's revenues and expenses and resulting net income or net loss
for a specific period of time.
Statement of Cash Flows - Correct Answer-Financial statement that
reports cash receipts and disbursements related to a firm's three major
activities: operations, investments, and financing.
Operating Cash Flow (OCF) - Correct Answer-the cash flow a firm
generates from normal operations—from the production and sale of its
goods and services.
1
, 2
investing cash flows - Correct Answer-cash transactions involving
purchase and sale of long-term assets
financing cash flows - Correct Answer-include cash transactions with
lenders, such as borrowing money and repaying debt, and with
stockholders, such as issuing stock and paying dividends
Statement of Comprehensive Income - Correct Answer-An income
statement in which a company also reports other comprehensive
income.
Including:
- foreign currency translation
- gains or losses prior service costs or credits related to a defined
pension plan
- unrealized holding gains or losses on available for sale securities
- the effective portion of the gain or loss on a derivative
statement of stockholders' equity - Correct Answer-Summarizes the
changes in the balance in each stockholders' equity account over a
period of time.
Including:
- capital stock
- APIC
- retained earnings
Assets - Correct Answer-Economic resources (things of value) owned by
a firm for future economic benefits.
2
, 3
Liabilities - Correct Answer-what a company owes
Equity - Correct Answer-the owner's claims to the assets of the business
after deducting liabilities.
Includes:
- issued capital (stock)
- APIC
- retained earnings
- treasury stock
- Accumulated other comprehensive income
current assets - Correct Answer-items that can or will be converted into
cash within one year
Include:
- cash and cash equivalents
- Trade or accounts receivable
- short-term notes receivable
- receivables from loans due
- inventories
- marketable securities
- prepaid expenses
Operating Cycle - Correct Answer-The average time required to
purchase inventory, sell it on account, and then collect cash from
customers—that is, go from cash to cash.
noncurrent assets - Correct Answer-assets that will be used or turned
into cash beyond one year
3
