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

1. Which of the following would NOT require taking into account the time value of money?

A) Taking a long-term investment decision on the basis of the project's internal rate of return (IRR).
B) Deciding to make a long-term investment in a project on the basis of its payback period.
C) Selecting an investment project on the basis that it has a positive net present value (NPV).
D) Calculating the present value of a five-year annuity.


2. Which TWO of the following are characteristics of Management Accounts? (Choose two.)

A) Internally focused
B) Provide information needed by shareholders
C) Provide information to managers
D) Governed by rules and regulations
E) Statutory requirement


3. Which of the following is a valid definition of a cash budget?

A) A detailed budget of estimated cash inflows and outflows incorporating revenue items only.
B) A detailed budget of estimated cash outflows only, incorporating both depreciation and capital expenditure.
C) A detailed budget of estimated cash inflows only, incorporating receipts from cash sales as well as from credit customers.
D) A detailed budget of estimated cash inflows and outflows incorporating both revenue and capital items.


4. The possible returns and associated probabilities of two independent projects are as follows:

It has been decided that both projects are to be launched.
Which TWO of the following statements are correct? (Choose two.)

A) The probability of the total return being a gain is less than 1.00.
B) The probability of making a total return of exactly $5,000 gain is 0.02.
C) The probability of the total return being a loss is 0.10.
D) The expected value of the total return is $41,500 gain.
E) The expected value of the total return is $40,000 gain.


5. A company operates an integrated standard cost accounting system. The standard price of raw material A is
$20 per litre. At the start of period 1, the inventory of 500 litres of raw material A was valued at $20 per litre.
During period 1, 100 litres of raw material A were purchased at an actual price of $21 per litre. During period 2,
550 litres of raw material A were issued to Job 789.
In respect of the above events, which TWO of the following statements are correct? (Choose two.)

A) An adverse material price variance should be recorded in the statement of profit or loss for period 2.
B) The first 500 litres of raw material A issued should be debited to the Job 789 account at $20 per litre, and the remaining 50 litres at $21 per litre.
C) An adverse material price variance should be recorded in the statement of profit or loss for period 1.
D) The raw material inventory at the end of period 1 should include 100 litres valued at $21 per litre.
E) The raw material inventory at the end of period 2 should be valued at $20 per litre.


Solutions:

Question # 1
Answer: D
Question # 2
Answer: C,E
Question # 3
Answer: A
Question # 4
Answer: A,C
Question # 5
Answer: A,B

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