Certified Management Accountant (CMA)

Question 1

A flexible budget differs from a static budget in that a flexible budget:

Is prepared only once per year and never revised Adjusts revenues and costs based on actual activity levels Uses only fixed costs and ignores variable costs Is approved by senior management before the fiscal year begins

Correct Answer:

Adjusts revenues and costs based on actual activity levels

Question 2

Under zero-based budgeting (ZBB), each budget period requires managers to:

Increase the prior year's budget by an inflation factor Justify all expenditures from scratch, regardless of prior spending Match budgeted spending to the previous year's actual spending Allocate costs based solely on activity drivers

Correct Answer:

Justify all expenditures from scratch, regardless of prior spending

Question 3

A rolling (continuous) budget is best described as one that:

Covers only the current calendar year and is replaced annually Adds a new period as the most recent period expires, maintaining a constant planning horizon Consolidates multiple departmental budgets into a single master budget Is prepared using regression analysis to project future sales

Correct Answer:

Adds a new period as the most recent period expires, maintaining a constant planning horizon

Question 4

Which budget is typically prepared first when constructing a master budget for a manufacturing company?

Cash budget Production budget Sales budget Direct materials budget

Correct Answer:

Sales budget

Question 5

A cash budget is primarily used by management to:

Determine the optimal product mix for the upcoming year Forecast periods of cash surplus or shortage to plan financing needs Set selling prices based on full cost absorption Allocate overhead costs to individual product lines

Correct Answer:

Forecast periods of cash surplus or shortage to plan financing needs

Question 1

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About this Exam

Prepare with the Certified Management Accountant (CMA) practice quiz. This question bank includes 100 questions covering management, accountant, professional, approach, and budget. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Certified Management Accountant (CMA)

This practice set contains 100 questions from the matching question bank and focuses on management, accountant, professional, approach, and budget. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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Certified Management Accountant (CMA)

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