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**25 US CMA Part 1 MCQs on Financial Reporting Topics**<\/p>\n**25 US CMA Part 1 MCQs on Financial Reporting Topics**<\/p>\n
These multiple-choice questions focus on US CMA exam-style topics like income statements, dividends, stock events, cash flows, investments, ratios, accounting concepts, and more, drawing from US GAAP principles tested in Part 1 Section A.<\/p>\n
### Income Statement & Equity Events<\/p>\n
1. In a multi-step income statement, gross profit is calculated as:<\/p>\n
A. Net sales minus operating expenses<\/p>\n
B. Net sales minus cost of goods sold<\/p>\n
C. Operating income minus taxes<\/p>\n
D. Net income plus interest<\/p>\n
<\/p>\n
2. A small stock dividend (under 20-25%) is recorded by debiting retained earnings at:<\/p>\n
A. Par value of shares<\/p>\n
B. Fair market value of shares<\/p>\n
C. Book value per share<\/p>\n
D. Zero impact on equity<\/p>\n
<\/p>\n
3. For a 2-for-1 stock split on $80\/share stock paying $1 dividend, post-split price expectation if dividend stays $1:<\/p>\n
A. Exactly $40<\/p>\n
B. Above $40 if yield rises<\/p>\n
C. Below $40<\/p>\n
D. Unchanged at $80<\/p>\n
<\/p>\n
4. Preferred dividends are typically:<\/p>\n
A. Variable like common dividends<\/p>\n
B. Fixed percentage of par value<\/p>\n
C. Paid after common dividends<\/p>\n
D. Non-cumulative by default<\/p>\n
<\/p>\n
5. A property dividend declares asset with book value $50, fair value $75 at declaration:<\/p>\n
A. No gain\/loss recognized<\/p>\n
B. Gain of $25 recorded<\/p>\n
C. Loss of $25 recorded<\/p>\n
D. Fair value at distribution date<\/p>\n
<\/p>\n
### Cash Flow Statement<\/p>\n
6. A statement of cash flows helps evaluate a firm’s:<\/p>\n
A. Economic resources and obligations<\/p>\n
B. Liquidity, solvency, financial flexibility<\/p>\n
C. Insider stock trades<\/p>\n
D. Operating income components<\/p>\n
<\/p>\n
7. Gain on sale of available-for-sale (AFS) securities is:<\/p>\n
A. Added to net income in operating cash flows<\/p>\n
B. Subtracted from net income in operating section<\/p>\n
C. Included in investing inflows<\/p>\n
D. Ignored in cash flow statement<\/p>\n
<\/p>\n
8. Cash flows from financing activities include:<\/p>\n
A. Cash from customers<\/p>\n
B. Proceeds from issuing shares or loans<\/p>\n
C. Purchase of equipment<\/p>\n
D. Collections of receivables<\/p>\n
<\/p>\n
9. Decrease in accounts receivable is:<\/p>\n
A. Subtracted in operating cash flows (indirect)<\/p>\n
B. Added in operating cash flows<\/p>\n
C. Investing outflow<\/p>\n
D. Financing inflow<\/p>\n
<\/p>\n
10. Past period bad debt recovery in current year (direct method):<\/p>\n
A. Operating inflow<\/p>\n
B. Investing inflow<\/p>\n
C. Financing inflow<\/p>\n
D. Off the cash flow statement<\/p>\n
<\/p>\n
### Investments & Losses<\/p>\n
11. AFS investments are reported at:<\/p>\n
A. Amortized cost<\/p>\n
B. Fair value; unrealized gains\/losses in OCI<\/p>\n
C. Lower of cost or market<\/p>\n
D. Historical cost only<\/p>\n
<\/p>\n
12. Allowance for credit losses uses:<\/p>\n
A. Direct write-off only<\/p>\n
B. Percentage of sales or receivables aging<\/p>\n
C. Historical cost adjustment<\/p>\n
D. Cash basis estimation<\/p>\n
<\/p>\n
### Liquidity, Solvency, Leverage<\/p>\n
13. Current ratio formula:<\/p>\n
A. Cash \/ Current liabilities<\/p>\n
B. Current assets \/ Current liabilities<\/p>\n
C. (Current assets – Inventory) \/ Current liabilities<\/p>\n
D. Operating cash flow \/ Current liabilities<\/p>\n
<\/p>\n
14. Cash flow ratio assesses:<\/p>\n
A. Solvency via operating cash \/ current liabilities<\/p>\n
B. Leverage via debt\/equity<\/p>\n
C. Activity via inventory turns<\/p>\n
D. Profitability via ROE<\/p>\n
<\/p>\n
15. Solvency best represented by:<\/p>\n
A. Cash balance end of period<\/p>\n
B. Operating cash flows<\/p>\n
C. Investing cash flows<\/p>\n
D. Financing cash flows<\/p>\n
<\/p>\n
### Concepts & Components<\/p>\n
16. Accrual concept records expenses when:<\/p>\n
A. Cash paid<\/p>\n
B. Incurred, not necessarily paid<\/p>\n
C. Profit is high<\/p>\n
D. Tax due<\/p>\n
<\/p>\n
17. Going concern assumption justifies:<\/p>\n
A. Liquidation basis<\/p>\n
B. Depreciation and current\/noncurrent classification<\/p>\n
C. Fair value for all assets<\/p>\n
D. No asset impairments<\/p>\n
<\/p>\n
18. Historical cost concept uses:<\/p>\n
A. Fair value at reporting<\/p>\n
B. Original transaction cost<\/p>\n
C. Inflated replacement cost<\/p>\n
D. Future estimated value<\/p>\n
<\/p>\n
19. Cash equivalents include:<\/p>\n
A. Long-term investments<\/p>\n
B. Highly liquid investments maturing within 3 months<\/p>\n
C. Inventory<\/p>\n
D. Accounts receivable<\/p>\n
<\/p>\n
20. Capital maintenance (financial):<\/p>\n
A. Physical capacity preserved<\/p>\n
B. Nominal capital not reduced by distributions<\/p>\n
C. Real purchasing power maintained<\/p>\n
D. Residual equity focus<\/p>\n
<\/p>\n
### Advanced & Mixed<\/p>\n
21. Principal-agent problem in separate entity concept:<\/p>\n
A. Owners manage operations<\/p>\n
B. Managers (agents) act for owners (principals)<\/p>\n
C. No separation of firm and owners<\/p>\n
D. Consolidated reporting only<\/p>\n
<\/p>\n
22. Recovery of prior bad debt:<\/p>\n
A. Credit to allowance, debit cash; no P&L<\/p>\n
B. Income in current year<\/p>\n
C. Balance sheet only<\/p>\n
D. Off-balance sheet<\/p>\n
<\/p>\n
23. Components of cash & equivalents exclude:<\/p>\n
A. Treasury bills <90 days<\/p>\n
B. Commercial paper<\/p>\n
C. Equity investments<\/p>\n
D. Money market funds<\/p>\n
<\/p>\n
24. Leverage ratio example:<\/p>\n
A. Current ratio<\/p>\n
B. Debt-to-equity<\/p>\n
C. Inventory turnover<\/p>\n
D. Gross margin<\/p>\n
<\/p>\n
25. Residual capital maintenance:<\/p>\n
A. Physical assets at original cost<\/p>\n
B. Distributions from residual equity after maintenance<\/p>\n
C. Nominal dividends only<\/p>\n
D. No distributions allowed<\/p>\n
<\/p>\n
www.gmsisuccess.in<\/p>\n","protected":false},"excerpt":{"rendered":"
**25 US CMA Part 1 MCQs on Financial Reporting Topics** These multiple-choice questions focus on US CMA exam-style topics like income statements, dividends, stock events, cash flows, investments, ratios, accounting concepts, and more, drawing from US GAAP principles tested in Part 1 Section A. ### Income Statement & Equity Events 1. In a multi-step income […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[9,8,13,1,34],"tags":[42,41,40],"class_list":["post-2625","post","type-post","status-publish","format-standard","hentry","category-accountancy","category-banking-and-finance","category-financial-reporting","category-uncategorized","category-us-cma-mcq-questions","tag-available-for-sale-investment","tag-cashflow-from-operation","tag-equity-dividend"],"_links":{"self":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts\/2625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2625"}],"version-history":[{"count":1,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts\/2625\/revisions"}],"predecessor-version":[{"id":2627,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=\/wp\/v2\/posts\/2625\/revisions\/2627"}],"wp:attachment":[{"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gmsisuccess.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}