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CMA (Certified Management Accountant) -
Practice Test
Which of the following budgeting methods is often associated with
participative budgeting where input is collected from lower-level managers? -
-Correct Answer-Incremental budgeting
What is the primary purpose of managerial accounting information? - -Correct
Answer-To help managers make decisions
Which of the following is a disadvantage of a centralized organizational
structure? - -Correct Answer-Slower response to local market conditions
What does the term "contribution margin" represent in cost-volume-profit
analysis? - -Correct Answer-The amount of revenue available to cover fixed
costs and contribute to profits
What is the formula to calculate the current ratio? - -Correct Answer-Current
assets divided by current liabilities
Which inventory costing method typically results in the lowest reported net
income during a period of rising prices? - -Correct Answer-LIFO (Last-In,
First-Out)
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, 2
What is the formula for calculating the earnings per share (EPS) ratio? - -
Correct Answer-Net income divided by average number of shares
outstanding
Which variance measures the difference between the actual cost of materials
used and the standard cost of materials for the actual production level? - -
Correct Answer-Materials price variance
What type of cost changes with changes in the level of activity within the
relevant range? - -Correct Answer-Variable cost
Which financial statement reports the financial position of a company as of a
specific date? - -Correct Answer-Balance sheet
What is the formula for calculating return on investment (ROI)? - -Correct
Answer-Net income divided by average total assets
Which type of cost changes in total with changes in the level of activity but
remains constant per unit? - -Correct Answer-Fixed cost
What is the formula for calculating the payback period? - -Correct Answer-
Initial investment divided by annual net cash inflow
Which budgeting approach uses zero-based budgeting where every item
must be justified for each new period? - -Correct Answer-Zero-based
budgeting
2
CMA (Certified Management Accountant) -
Practice Test
Which of the following budgeting methods is often associated with
participative budgeting where input is collected from lower-level managers? -
-Correct Answer-Incremental budgeting
What is the primary purpose of managerial accounting information? - -Correct
Answer-To help managers make decisions
Which of the following is a disadvantage of a centralized organizational
structure? - -Correct Answer-Slower response to local market conditions
What does the term "contribution margin" represent in cost-volume-profit
analysis? - -Correct Answer-The amount of revenue available to cover fixed
costs and contribute to profits
What is the formula to calculate the current ratio? - -Correct Answer-Current
assets divided by current liabilities
Which inventory costing method typically results in the lowest reported net
income during a period of rising prices? - -Correct Answer-LIFO (Last-In,
First-Out)
1
, 2
What is the formula for calculating the earnings per share (EPS) ratio? - -
Correct Answer-Net income divided by average number of shares
outstanding
Which variance measures the difference between the actual cost of materials
used and the standard cost of materials for the actual production level? - -
Correct Answer-Materials price variance
What type of cost changes with changes in the level of activity within the
relevant range? - -Correct Answer-Variable cost
Which financial statement reports the financial position of a company as of a
specific date? - -Correct Answer-Balance sheet
What is the formula for calculating return on investment (ROI)? - -Correct
Answer-Net income divided by average total assets
Which type of cost changes in total with changes in the level of activity but
remains constant per unit? - -Correct Answer-Fixed cost
What is the formula for calculating the payback period? - -Correct Answer-
Initial investment divided by annual net cash inflow
Which budgeting approach uses zero-based budgeting where every item
must be justified for each new period? - -Correct Answer-Zero-based
budgeting
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