TheoryFree CMA Accounting Practice Test
Take a free CMA Accounting practice test for 2026 with questions, answers, explanations, PDF download and timed mock exam links.
CMA Accounting Questions
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Q1Which budget is the starting point and foundation for nearly all other operating budgets in a manufacturing firm?
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✓ Correct answer: The sales budget
The sales forecast drives production, materials, labor, and overhead budgets, so the sales budget is prepared first and underpins the entire master budget.
Q2A master budget is best described as:
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✓ Correct answer: A comprehensive set of interrelated budgets covering all operations for a period
The master budget is the overall financial plan, integrating operating budgets and financial budgets into pro forma statements for the organization.
Q3Under zero-based budgeting, each budgeting period a manager must:
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✓ Correct answer: Justify all expenditures from a zero base rather than from the prior year's level
Zero-based budgeting requires every activity and cost to be justified anew each cycle as if starting from zero, rather than carrying forward last year's amounts.
Q4A flexible budget differs from a static budget in that it:
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✓ Correct answer: Is adjusted to reflect the actual level of activity achieved
A flexible budget restates budgeted revenues and costs for the actual output level, isolating price/efficiency effects from volume effects.
Q5Budgeted sales are 50,000 units. Beginning finished-goods inventory is 6,000 units and desired ending inventory is 9,000 units. Budgeted production (units) equals:
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✓ Correct answer: 53,000
Production = Sales + Desired ending inventory - Beginning inventory = 50,000 + 9,000 - 6,000 = 53,000 units.
Q6A firm plans to produce 20,000 units, each requiring 3 lbs of material. Beginning material inventory is 5,000 lbs; desired ending is 8,000 lbs. Materials to be purchased (lbs) equal:
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✓ Correct answer: 63,000
Materials needed for production = 20,000 x 3 = 60,000 lbs. Purchases = 60,000 + 8,000 ending - 5,000 beginning = 63,000 lbs.
Q7Which item would appear as a cash disbursement in a cash budget but NOT reduce net income in the same period?
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✓ Correct answer: Purchase of equipment for cash
A capital asset purchase is a cash outflow but is expensed over time via depreciation, so it hits the cash budget immediately without an equal current-period expense.
Q8Credit sales are collected 60% in the month of sale and 40% the following month. Sales were $100,000 in May and $150,000 in June. June cash collections equal:
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✓ Correct answer: $130,000
June collections = 60% of June ($150,000 x 0.60 = $90,000) + 40% of May ($100,000 x 0.40 = $40,000) = $130,000.
Q9A continuous (rolling) budget is one that:
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✓ Correct answer: Adds a new period as each period elapses, always maintaining a set horizon
A rolling budget continually adds a future month or quarter as the current one ends, keeping a constant forward-looking horizon (e.g., always 12 months).
Q10A key behavioral risk of participative (bottom-up) budgeting is:
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✓ Correct answer: Budgetary slack created by managers padding estimates
When managers help set their own targets, they may build in slack (understating revenue or overstating costs) to make targets easier to achieve.
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