CMA Exam Support Package – Study Guide, Practice Questions & Exam Review

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CMA Exam Support Package

Table of Contents

CMA Part 1 Examination Practice Questions page 2

CMA Part 2 Examination Practice Questions page 188

CMA Part 1 & 2 Practice Essays page 382

CMA Part 1 & 2 Practice Essay Answers page 437

Additional Part 1 Practice Questions page 514

Additional Part 1 Practice Question Answers page 542

Additional Part 2 Practice Questions page 543

Additional Part 2 Practice Question Answers page 568

Additional Part 1 & 2 Practice Essays page 569

Additional Part 1 & 2 Practice Essay Answers page 575

Suggested Reading List page 580

CMA Exam Ratio Definitions page 585

Exam Test Taking Strategies page 589

Candidate Resources page 591




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CMA Part 1 – Financial Planning,

Performance, and Control

Examination Practice Questions




© Copyright 2019 Institute of Certified Management Accountants




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CMA Part 1 – Financial Planning, Performance and Control
Examination Practice Questions
Section A: External Financial Reporting Decisions

1. CSO: 1A1a LOS: 1A1a
The financial statements included in the annual report to the shareholders are least useful to which
one of the following?

a. Stockbrokers.
b. Bankers preparing to lend money.
c. Competing businesses.
d. Managers in charge of operating activities.


2. CSO: 1A1a LOS: 1A1e
When a fixed asset is sold for less than book value, which one of the following will decrease?

a. Total current assets.
b. Current ratio.
c. Net profit.
d. Net working capital.


3. CSO: 1A1a LOS: 1A1e
On July 15, a company entered into a three-month agreement to rent a machine the company needed
to complete a special order. The machine would be delivered on August 1, and rental payments are
due on the first day of each rental month. The effect this event would have on the company’s July 31
financial statements would be to

a. cause no change in assets, liabilities, or income.
b. increase both assets and income.
c. increase both assets and liabilities.
d. increase liabilities and decrease income.


4. CSO: 1A1a LOS: 1A1d
All of the following are limitations to the information provided on the statement of financial position
except the

a. quality of the earnings reported for the enterprise.
b. judgments and estimates used regarding the collectability, salability, and longevity of assets.
c. omission of items that are of financial value to the business such as the worth of the employees.
d. lack of current valuation for most assets and liabilities.




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5. CSO: 1A1a LOS: 1A1b
A statement of financial position provides a basis for all of the following except

a. computing rates of return.
b. evaluating capital structure.
c. assessing liquidity and financial flexibility.
d. determining profitability and assessing past performance.


6. CSO: 1A1b LOS: 1A1b
An income statement could be used by an external investor for all of the following purposes except
to

a. analyze the company’s performance compared to the budget.
b. compare the company’s results to those of its competitors.
c. assess the risk of the company achieving future profitability.
d. predict the company’s future revenues.


7. CSO: 1A1b LOS: 1A1b
The financial statement that provides a summary of the firm’s operations for a period of time is the

a. income statement.
b. statement of financial position.
c. statement of shareholders’ equity.
d. statement of retained earnings.


8. CSO: 1A1b LOS: 1A1e
Bertram Company had a balance of $100,000 in Retained Earnings at the beginning of the year and
$125,000 at the end of the year. Net income for this time period was $40,000. Bertram’s Statement
of Financial Position indicated that Dividends Payable had decreased by $5,000 throughout the year,
despite the fact that both cash dividends and a stock dividend were declared. The amount of the
stock dividend was $8,000. When preparing its Statement of Cash Flows for the year, Bertram
should show Cash Paid for Dividends as

a. $20,000.
b. $15,000.
c. $12,000.
d. $5,000.




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