To provide candidates with a brief view of some of the types of questions on the CMA® (Certified Management Accountant) exam, the following are five questions – with correct answers and explanations for each. 

You can also check out these additional practice multiple-choice and essay questions to test your CMA knowledge.

CMA Exam Part 1:

1. The financial statement that provides a summary of a 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.

Correct answer a.
The purpose of the income statement is to provide a summary of a firm’s operating activities for a period of time.

2. A company prepared a master budget based on 100 budgeted sales units with a $100 sales price per unit, a variable cost per unit of $50, and $2,000 in total fixed cost. The actual sales quantity was 70 units. When preparing a flexible budget, the operating income would be 

a. $1,500. 
b. $3,000. 
c. $3,500.  
d. $5,000.

Correct answer a.
This is the operating income in a flexible budget where the sale quantity is 70 units, calculated as:
Sales revenue (70 units*$100/unit) - variable cost (70 units*$50/unit) - fixed cost ($2,000) = $1,500.

3. The basic concepts implicit in internal accounting controls include the following.

  • The cost of the system should not exceed the benefits expected to be attained.
  • The overall impact of the control procedure should not hinder operating efficiency.

Which one of the following recognizes these two factors?

a. Limitations.
b. Management responsibility.
c. Methods of data processing.
d. Reasonable assurance.

Correct answer d.
The benefits of internal controls must always exceed the costs of implementing them. Implementing a system of absolute assurance is overly costly; thus, only reasonable assurance can be obtained.

CMA Exam Part 2:

4. Which one of the following would have the least impact on a firm’s beta value?

a. Debt-to-equity ratio.
b. Industry characteristics.
c. Operating leverage.
d. Payout ratio.

Correct answer d.
Beta is an index of systematic risk and measures the sensitivity of a stock’s returns to changes in returns on the market portfolio. A firm’s beta is determined by the risk characteristics of the firm. Of the options given, the payout ratio has the least impact on the firm’s riskiness and therefore its beta value.

5. A company that prides itself on its innovation revised an existing popular brand without conducting sufficient market research. By taking this action, the company exposed itself to what types of risk?

a. Credit risk and strategic risk.
b. Hazard risk and credit risk.
c. Operational risk and hazard risk.
d. Strategic risk and operational risk.

Correct answer d.
Strategic risk includes brand risk and changing customer needs; operational risk includes customer satisfaction and change integration. Hazard risk deals with insurable events, and financial risk includes items such as credit risk. The last two are not applicable in the situation given.