Question 1
Which of the following is an example of secondary data?
Correct Answer:
Data from a system
Explanation:
Secondary data consists of information that has already been collected by someone else for a purpose other than the current analysis and is reused. Data from a system is secondary because it is generated by routine operations and stored in the organization’s information systems, ready to be pulled for analysis without new data collection. In contrast, focus groups, questionnaires, and experiments involve collecting new information directly from people or observing new trials, which makes them primary data collection methods. Therefore, data from a system is the example of secondary data.
Question 2
Which of the following is a finance-supported activity for the Production (Operations) Team?
Correct Answer:
Cost measurement, allocation and absorption
Explanation:
Finance supports Production by providing costing information that helps plan, control, and evaluate how a product is produced. Cost measurement, allocation and absorption is the process of determining the cost of producing goods, assigning overheads (both fixed and variable) to products, and absorbing those costs into product costs. This directly informs production decisions, helps set standard costs, monitors efficiency, and evaluates profitability across different products or production runs. Market research and advertising are marketing activities focused on demand and promotion, not on production cost control. Customer invoicing belongs to revenue and cash processes, not production operations. So the activity that best reflects finance supporting the Production team is cost measurement, allocation and absorption.
Question 3
Which term describes the Finance Function as the subject matter expert contributing to strategic decision making and developing the business model?
Correct Answer:
Stewardship
Explanation:
Stewardship captures the finance function’s role as custodian of the organization’s resources, providing governance, risk management, and strategic input. When finance acts as the subject matter expert contributing to strategic decision making and helping develop the business model, it’s guiding how value is created and sustained across the enterprise. This means offering authoritative financial insight, challenging assumptions, and shaping decisions that affect capital allocation, long-term plans, and the overall model of how the business creates and captures value. Value enabling would focus more on enabling value through information and support, but it doesn’t inherently emphasize governance and strategic shaping. Data integrity centers on the quality and reliability of data, not on strategic influence. Value analysis is about evaluating specific options or benefits, rather than guiding broad strategy and resource stewardship.
Question 4
Which statement best describes a hierarchical structure?
Correct Answer:
Big at the bottom, narrow at the top
Explanation:
Hierarchy means authority is arranged in levels with a clear chain of command from top to bottom. A tall, formal structure is often depicted as a pyramid: many people at the bottom, progressively fewer at higher levels, ending with a small number of senior managers. The description “Big at the bottom, narrow at the top” captures this idea because it shows a large base of employees reporting upward to a small apex of decision-makers, which is the essence of a hierarchical organization. In contrast, a flat structure would have few levels and a broad base, indicating less layering of authority; decentralization spreads decision rights, reducing centralized control; and an informal structure lacks formal reporting lines, so it isn’t truly hierarchical.
Question 5
Which of the following is a basic digital literacy skill?
Correct Answer:
Create Digital Content
Explanation:
Digital literacy centers on using digital tools to access, evaluate, create, and share information. The best choice shows the ability to produce digital content—like documents, presentations, or multimedia—using common software and devices. Creating content is a foundational skill because it demonstrates practical, everyday use of technology to generate outputs and communicate ideas. The other tasks require deeper technical expertise: coding from scratch involves programming, explaining cloud architecture touches on system design, and configuring network hardware deals with setting up physical networking equipment. These are important skills, but they go beyond basic digital literacy.
Question 1
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Prepare with the CIMA Managing Finance in a Digital World (E1) Practice Exam practice quiz. This question bank includes 10 questions covering describes, described, secondary, cima, and managing. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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CIMA Managing Finance in a Digital World (E1) Practice Exam

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