CIMA Official Exam Practice Kit Fundamentals of Management Accounting, Third Edition: CIMA Certificate in Business Accounting

259 Pages·2010·5.59 MB·English

by  Walter Allan

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CIMA Exam Practice Kit
CIMA Certificate in Business
Accounting
Fundamentals of
Management
Accounting
Walter Allan
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First edition 2008
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Contents
About the Author viii
Syllabus Guidance, Learning Objectives and Verbs ix
Examination Techniques xvii
1 Cost Behaviour 1
Concepts and definitions questions 3
Concepts and definitions solutions 5
Multiple choice questions 7
Multiple choice solutions 9
2 Accounting for the Value of Inventories 11
Concepts and definitions questions 13
Concepts and definitions solutions 14
Multiple choice questions 16
Multiple choice solutions 18
3 Overhead Costs: Allocation, Apportionment and Absorption 21
Concepts and definitions questions 23
Concepts and definitions solutions 25
Multiple choice questions 27
Multiple choice solutions 29
4 Cost–Volume–Profit Analysis 31
Concepts and definitions questions 33
Concepts and definitions solutions 35
Multiple choice questions 37
Multiple choice solutions 40
5 Standard Costs 43
Concepts and definitions questions 45
Concepts and definitions solutions 47
Multiple choice questions 49
Multiple choice solutions 51
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vi Contents
6 Variance Analysis 53
Concepts and definitions questions 55
Concepts and definitions solutions 57
Multiple choice questions 59
Multiple choice solutions 61
7 Cost Book-keeping 63
Concepts and definitions questions 65
Concepts and definitions solutions 68
Multiple choice questions 73
Multiple choice solutions 76
8 Job and Batch Costing 79
Concepts and definitions questions 81
Concepts and definitions solutions 83
Multiple choice questions 85
Multiple choice solutions 88
9 Contract Costing 91
Concepts and definitions questions 93
Concepts and definitions solutions 95
Multiple choice questions 98
Multiple choice solutions 100
10 Process Costing 103
Concepts and definitions questions 105
Concepts and definitions solutions 107
Multiple choice questions 110
Multiple choice solutions 113
11 Managerial Reports in a Service Organisation 117
Concepts and definitions questions 119
Concepts and definitions solutions 121
Multiple choice questions 123
Multiple choice solutions 126
12 Functional Budgets 129
Concepts and definitions questions 131
Concepts and definitions solutions 133
Multiple choice questions 135
Multiple choice solutions 137
13 Cash Budgets 139
Concepts and definitions questions 141
Concepts and definitions solutions 143
Multiple choice questions 145
Multiple choice solutions 148
Contents vii
14 Flexible Budgets 151
Concepts and definitions questions 153
Concepts and definitions solutions 154
Multiple choice questions 155
Multiple choice solutions 157
Mock Assessments 1, 2 and 3 159
vii
About the Author
Walter Allan has lectured, written, examined and published in the fields of Management
andAccounting for the past 25 years. He has lectured on CIMAcourses for a number of UK
private colleges and is a former CIMAexaminer. He is chief executive of Galashiels Economic
Consultancy, a company which specialises in professional Accountancy training.
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Syllabus Guidance,
Learning Objectives
and Verbs
A The Certificate in Business Accounting
The Certificate introduces you to management accounting and gives you the basics of
accounting and business. There are five subject areas, which are all tested by computer-
based assessment (CBA). The five papers are:
• Fundamentals of Management Accounting
• Fundamentals of Financial Accounting
• Fundamentals of Business Mathematics
• Fundamentals of Business Economics
• Fundamentals of Ethics, Corporate Governance and Business Law
The Certificate is both a qualification in its own right and an entry route to the next stage in
CIMA’s examination structure.
The examination structure after the Certificate comprises:
• Managerial Level
• Strategic Level
• Test of Professional Competence in Management Accounting (an exam based on a case
study).
This examination structure includes more advanced papers in Management Accounting. It is
therefore very important that you work hard at Fundamentals of Management Accounting,
not only because it is part of the Certificate, but also as a platform for more advanced studies.
It is thus an important step in becoming a qualified member of the Chartered Institute of
Management Accountants.
B Aims of the syllabus
The aims of the syllabus are
• to provide for the Institute, together with the practical experience requirements, an
adequate basis for assuring society that those admitted to membership are competent
to act as management accountants for entities, whether in manufacturing, commercial
or service organisations, in the public or private sectors of the economy;
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