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CIMA BA2 – Fundamentals of Management Accounting Question Tutorial Sample Questions:

1. In responsibility accounting, costs and revenues are grouped according to:

A) the service provided.
B) their function.
C) their behaviour.
D) the budget holder.

2. A company's policy is to hold closing inventory each month equal to 10% of the next month's budgeted sales volume. The budgeted sales volumes of product Q for months 1 and 2 are 1,660 units and 2,300 units respectively.
The production budget for product Q for month 1 is:

A) 1,494 units
B) 1,890 units
C) 1,596 units
D) 1,724 units

3. The concept of the time value of money:

A) recognises the fact that a cash flow received today will always be worth more than a larger cash flow received in the future.
B) is used for making short term decisions.
C) determines the higher interest rates that must be paid on longer term loans.
D) recognises the fact that earlier cash flows are worth more because they can be reinvested.

4. In a company that manufactures many different products on the same production line, which TWO of the following would NOT be classified as indirect production costs? (Choose two.)

A) Royalties paid to the designers of the products.
B) Commissions paid to the sales team.
C) Factory rent.
D) Salary paid to the factory manager.
E) Maintenance costs for the company's only production line.

5. Which type of budget would be the most suitable for a cash budget?

A) Rolling budget
B) Flexible budget
C) Fixed budget
D) Incremental budget

Solutions: