CIMA Certificate in Business Accounting Practice Questions — All Questions
19 questions
If demand for a product rises while supply is unchanged, the price tends to:
- a.Stay the same
- b.Fall
- c.Become zero
- d.Rise✓
Excess demand relative to supply pushes prices up.
A market where many firms sell identical products with free entry is:
- a.Monopoly
- b.Monopsony
- c.Oligopoly
- d.Perfect competition✓
Perfect competition features many firms, homogeneous products, and free entry.
A monopoly is characterized by:
- a.Many small firms
- b.A single dominant seller✓
- c.Perfectly elastic demand
- d.Identical products from many sellers
A monopoly has one dominant supplier of a product.
Price elasticity of demand measures how quantity demanded responds to a change in:
- a.Supply
- b.Advertising
- c.Income only
- d.Price✓
Price elasticity relates the change in quantity demanded to a change in price.
A cost that varies in direct proportion to output is a:
- a.Variable cost✓
- b.Sunk cost
- c.Step cost that never changes
- d.Fixed cost
Variable costs change proportionally with the level of activity.
Contribution per unit equals selling price per unit minus:
- a.Total cost
- b.Fixed cost per unit
- c.Tax per unit
- d.Variable cost per unit✓
Unit contribution = selling price - variable cost per unit.
A budget is best described as:
- a.A tax return
- b.A quantitative plan for a future period✓
- c.A record of past results
- d.An audit report
A budget is a financial/quantitative plan for the future.
Break-even output in units is fixed costs divided by:
- a.Variable cost
- b.Contribution per unit✓
- c.Selling price
- d.Total cost
Break-even units = fixed costs / contribution per unit.
In double-entry bookkeeping, an increase in an asset is recorded as a:
- a.Both equally
- b.Credit
- c.Neither
- d.Debit✓
Asset increases are recorded as debits.
The statement showing assets, liabilities, and equity at a point in time is the:
- a.Cash flow statement
- b.Income statement
- c.Statement of financial position (balance sheet)✓
- d.Trial balance
The statement of financial position (balance sheet) shows position at a date.
Profit for a period is broadly:
- a.Sales only
- b.Assets minus liabilities
- c.Cash received
- d.Income less expenses✓
Profit equals income less expenses for the period.
A liability is:
- a.Something the business owns
- b.Revenue earned
- c.A present obligation to transfer economic benefit✓
- d.Owner's investment
A liability is a present obligation arising from past events.
Which is one of CIMA's fundamental ethical principles?
- a.Integrity✓
- b.Aggressive selling
- c.Secrecy from regulators
- d.Maximizing fees
Integrity is a fundamental principle, alongside objectivity, competence, confidentiality, and professional behavior.
Objectivity as an ethical principle requires members to:
- a.Avoid all clients
- b.Maximize personal gain
- c.Always agree with the client
- d.Not let bias or conflicts of interest override professional judgment✓
Objectivity means not compromising judgment due to bias or conflict.
Corporate governance is primarily concerned with:
- a.Payroll processing
- b.How an organization is directed and controlled✓
- c.Marketing strategy
- d.Product design
Governance is the system by which organizations are directed and controlled.
Confidentiality requires that a member:
- a.Disclose to competitors
- b.Share client data freely
- c.Sell client information
- d.Not disclose client information without proper authority✓
Confidentiality restricts disclosure of client information without authority or legal duty.
20% of 250 is:
- a.75
- b.20
- c.50✓
- d.25
0.20 x 250 = 50.
Simple interest on 1,000 at 5% per year for 2 years is:
- a.100✓
- b.200
- c.150
- d.50
Simple interest = 1,000 x 0.05 x 2 = 100.
If a ratio of A to B is 3:2 and total is 200, then A equals:
- a.120✓
- b.100
- c.150
- d.80
A = 200 x 3/5 = 120.