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CIMA Fundamentals of management accounting Sample Questions:

1. In the process account, the accounting treatment of the value of the abnormal loss is:

A) Debit Process account Credit Normal Loss account
B) Credit Process account Debit Abnormal Loss account
C) Debit Process account Credit Abnormal Loss account
D) Credit Process account Debit Normal Loss account

2. What is the purpose of performing an NPV?

A) It is technique that calculates the present value of all company assets in case of liquidation.
B) It is a project appraisal technique that calculates a project's contribution to the wealth of the company.
C) It allows the company to decide which departments will benefit the most from investment.

3. Which of these descriptions most accurately describes a cost centre?

A) A cost centre is a location where all costs relating to certain activities and functions are stored.
B) A cost centre is an office where costs for a specific activity are stored.
C) A cost centre is a location where all costs across the company are consolidated into one account.

4. Refer to the exhibit.

SS Ltd. manufactures four products which require the same type of material. The following fixed cost and profit/(loss) per unit is available:

In a period in which materials are in short supply, which of the following options is the rank order of production?

A) Option D
B) Option A
C) Option C
D) Option B

5. In investment appraisal, the net present value (NPV) is

A) The difference between the present value of the project's cash inflows and the present value of the cash outflows.
B) The difference between the present value of the project's profit and the present value of the initial investment.
C) The present value of the project's cash inflow.
D) The discount rate at which the project's cash inflows are equal to the cash outflows.

Solutions: