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CIMA Fundamentals of management accounting Sample Questions:

1. Which of the following definitions best describes Zero based budgeting?

A) A method of budgeting where the sum of revenues and expenditures in each budget centre must equal zero
B) A method of budgeting whereby every item of expenditure does not have to be justified before its inclusion in the budget
C) A method of budgeting where an attempt is made to make the expenditure under each cost heading as close to zero as possible
D) A method of budgeting whereby all activities are re-evaluated each time a budget is formulated

2. Refer to the exhibit.

The Solo Company makes only one type of product. The budgeted profit statement for the next year, when output is budgeted to be 50,000 units is:
The margin of safety is:

3. Overhead apportionment is best described as:

A) The identification of overhead cost variances
B) The process of sharing costs amongst two or more cost centers
C) The identification of costs specifically attributable to a particular cost centre
D) The charging of overheads to cost units produced

4. Which THREE of the following are parts of the master budget? (Choose three.)

A) Budgeted statement of financial position.
B) Finished goods inventory budget.
C) Cash flow budget.
D) Administration overhead budget.
E) Budgeted statement of profit or loss.
F) Sales budget.

5. The managing director of a small expanding company has made a number of statements about CIMA's role in relation to its members and to worldwide organizations.
Which ONE of the following statements is NOT correct?

A) CIMA is a member of IFAC (International Federation of Accountants)
B) CIMA's members work primarily in the private sector
C) CIMA provides its members and students with ethical guidance
D) CIMA's continuing professional development scheme is applicable to all members

Solutions: