CMA EXAM PART 1: SECTION A
2025 QUESTIONS AND ANSWERS
Primary users of financial statements - ANSWER✔✔-- Existing and potential investors
- Existing and potential landers and creditors
Secondary users of financial statements - ANSWER✔✔-- Customers
- Employees
- Gov. and Regulatory Agencies
- the general public
Statement of financial position (balance sheet) - ANSWER✔✔-An accounting statement that
records the values of a business's *assets*, *liabilities* and *shareholders' equity* at one point in
time
Income Statement - 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 - ANSWER✔✔-Financial statement that reports cash receipts and
disbursements related to a firm's three major activities: operations, investments, and financing.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Operating Cash Flow (OCF) - ANSWER✔✔-the cash flow a firm generates from normal
operations—from the production and sale of its goods and services.
investing cash flows - ANSWER✔✔-cash transactions involving purchase and sale of long-term
assets
financing cash flows - 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 - 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 - ANSWER✔✔-Summarizes the changes in the balance in each
stockholders' equity account over a period of time.
Including:
- capital stock
- APIC
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, - retained earnings
Assets - ANSWER✔✔-Economic resources (things of value) owned by a firm for future economic
benefits.
Liabilities - ANSWER✔✔-what a company owes
Equity - 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 - 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
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
2025 QUESTIONS AND ANSWERS
Primary users of financial statements - ANSWER✔✔-- Existing and potential investors
- Existing and potential landers and creditors
Secondary users of financial statements - ANSWER✔✔-- Customers
- Employees
- Gov. and Regulatory Agencies
- the general public
Statement of financial position (balance sheet) - ANSWER✔✔-An accounting statement that
records the values of a business's *assets*, *liabilities* and *shareholders' equity* at one point in
time
Income Statement - 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 - ANSWER✔✔-Financial statement that reports cash receipts and
disbursements related to a firm's three major activities: operations, investments, and financing.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Operating Cash Flow (OCF) - ANSWER✔✔-the cash flow a firm generates from normal
operations—from the production and sale of its goods and services.
investing cash flows - ANSWER✔✔-cash transactions involving purchase and sale of long-term
assets
financing cash flows - 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 - 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 - ANSWER✔✔-Summarizes the changes in the balance in each
stockholders' equity account over a period of time.
Including:
- capital stock
- APIC
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
, - retained earnings
Assets - ANSWER✔✔-Economic resources (things of value) owned by a firm for future economic
benefits.
Liabilities - ANSWER✔✔-what a company owes
Equity - 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 - 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
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
