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CMA Exam Essay Questions: Complete Guide to Ace the CMA Essays

• By Stephanie Ng
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Many aspiring CMAs with an international background dread the CMA exam essay questions. The writing aspect of the exam can be daunting for many people. This is especially true if English is not your first language. However, some CMA preparation for the essays can help you reduce your anxiety about the written section.

Don’t get thrown off by the CMA essay questions. You can review the CMA essays and prepare yourself for this part of the exam once you know what to expect. What exactly are the examiners testing, how are the essays graded, and how can you get a good score?

CMA Exam Structure

You have 4 hours to complete each part of the CMA exam. If you complete the multiple-choice questions (MCQs) in less than 3 hours, then you have the remaining time to work on the essay portion. If you use the full 3 hours for the multiple-choice questions, you will have to stop and move on to essay questions.

For candidates whose first language isn’t English, I strongly encourage you to practice going through CMA exam MCQs quickly, so you can allot more time for the essay portion of the exam.

However, keep in mind that there is a chance you won’t see any essay questions on your exam if you do poorly on the MCQs. In fact, you can only move on to the essays if you get at least 50% of the multiple-choice questions correct. If you do not score 50% or higher on the MCQs, your exam will end, and you will need to sign up to sit for the exam again.

The CMA exam has two parts:

• Part 1: Financial Planning, Performance, and Analytics
• Part 2: Strategic Financial Management

Each part contains 100 multiple-choice questions (MCQs) and two essay scenarios. Each scenario has several short-answer questions that accompany it.

CMA Exam Format for Essays

There are two possible essay topics or scenarios, each consisting of several questions. You may be asked to complete a business memo or to work on quantitative analysis.

You’ll add your answers to the essay questions using a simple word processor that is similar to Notepad. For essays that require a computational response, you should create simple tables and show calculations within the word processor space provided. It is a good idea to get familiar with the testing program before your exam day so you can gain confidence in using the essay section’s word processor.

The most accurate exam-mimicking practice can be found in Gleim CMA Review . Their platform allows for complete immersion in the Prometric virtual environment, so there are no surprises on exam day. CMA candidates email me daily about acing the essays, and you’ll be well on your way to completing the essay questions if you use the Gleim Premium CMA Review System . Likewise, Becker CMA also replicates the real testing environment that you’ll encounter at Prometric. Therefore, if you study with Becker, make sure you take advantage of the unlimited practice tests so that you become used to interacting with the exam software.

CMA Essay Example

CMA Essay Scenario Screen

When you reach the essay section of each part of the CMA exam, you may open the essay scenario. The essay scenario includes all the information you need to answer the questions correctly. Consequently, you’ll find that the essay scenario window will open to the left of the window that is displaying the answer box. I highly recommend keeping your essay scenario window open at all times so you don’t miss any critical information as you answer the questions.

Most exam prep courses will show you screenshots and possibly videos of this so that you know what to expect. To repeat, the essay scenario window looks like Notepad or a similar word processing program, and it will have several features to make it easier to complete your essays.

The CMA essay scenario screen functions include the following:

• Zoom – Using the “+” and “-” buttons, you can make the text bigger or smaller as needed
• Navigate – You can use “>”  or “<“ to help you navigate through the pages of the essay scenario
• Scroll – The gray scrollbar on the right side of the screen will help you scroll up and down the page
• Grab – To “grab” the page, click and hold the left mouse button, and then drag the page in any direction
• View page thumbnails – Use the green button with the double rectangle icon (top left) to see all pages as thumbnails
• View table of contents – Use the green button with the “bookshelf” icon (top right) to view the essay scenario as a table of contents

Because you don’t want to waste precious time trying to learn how to use the various CMA exam functions, your actual exam day is the worst possible time to become acclimated to them. Thus, be sure to use my advice from the prior section about finding a CMA review course that emulates the actual exam.

How to Answer CMA Essay Questions

To answer the CMA exam essay questions, you must write a response or complete a calculation related to the scenario that the exam provides you. You must read the question very carefully so you can understand the requirements and adhere to them properly. If you’re doing a calculation, it’s essential you show your work. You can get partial credit for the information you provide related to the topic, but only if you show your work!

When providing a written response, you must be as detailed as possible. You want to be concise and avoid flowery language, but you also need to be comprehensive and accurate. Therefore, mention anything that might be relevant to the topic you are writing about to help you score more points. Brainstorm and then work through your first draft so that your answer is complete; then, you can go back and proofread your answer as time allows.

Because this process could take a while, especially if English is not your first language, it’s essential to get through the MCQs efficiently. Remember, if you finish up the MCQs early, you can bank that extra time for use in the essay portion of the exam.

Example of how to format a quantitative answer in the CMA essay section

CMA Essay Grading System

Cma essay points vs. mc.

The two types of CMA exam questions account for the following percentage of your overall score:

• Essays : 25%

The essays are graded by trained subject matter experts using an approved scoring rubric to ensure objectivity and consistency. In contrast, the MCQs are graded by a computer.

Why does the CMA exam contain essay questions?

This part of the exam is meant to test your:

• Knowledge of the exam content
• Ability to apply concepts in real business situations
• Ability to write clearly and logically

1. Knowledge of Exam Content

Obviously, becoming proficient with the CMA exam content is a critical step to passing both the multiple-choice questions and the essay part of the exam. In addition to reading and watching video lectures, you should spend sufficient time answering practice questions and essays. Unlike reading and watching lectures, answering practice questions helps you apply the concepts you learned. Answering practice questions is about more than just memorizing facts. Therefore, it is most important that you learn the material in such a way that you can apply it to practical scenarios that you might face on the job.

For example,  NINJA CMA Review has over 40 sample essays that come with answers. Similarly, the Gleim CMA Course includes hundreds of essay scenarios with detailed answer explanations. Plus, you’ll have a chance to practice typing in the answers in a simulated exam environment on your computer. This is a great way to familiarize yourself firsthand with what it will be like on the actual exam.

2. Ability to Apply Concepts in Real Business Situations

Knowing the CMA content-specific facts does not mean you know when and how to apply them. However, the essay questions help ensure that CMAs in the workforce understand the CMA content at an application level. When you are faced with an essay question, you should:

• Read each word in the question carefully to understand what the examiner is asking
• Identify the major concepts being tested
• Identify keywords to use in your responses

I like to use a mind map to brainstorm as many relevant keywords as possible because the inclusion of the correct keywords helps you score points.

3. Ability to Write Clearly and Logically

The CMA exam does not test your vocabulary skills. Therefore, you should focus on simple and clear writing; this is not the time to show off how many SAT words you remember.

Instead, the ICMA is looking for your ability to express yourself clearly and logically as it relates to the CMA material tested in the essay questions. You can find the three general principles of effective business writing below. This will help you know how to best answer CMA essay questions on exam day.

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Subscribe to our newsletter and get instant access, how to best answer cma exam essay questions, use of standard english.

Knowing how to use proper, standard English will be essential. It’s the same style you’d use for any American academic or business writing. Use this breakdown to learn what that means for the US CMA essay questions.

(i) Correct Spelling

All words should be properly checked to avoid spelling errors and typos. You shouldn’t use colloquial sayings, slang, and text-message words or abbreviations.

Acronyms should be fully spelled out when they are first introduced in the essay. For example, ABC should be spelled out as “Activity-Based Costing (ABC)” first, and then the term ABC can be used in the rest of your response. The graders want to know that you understand what these acronyms stand for.

An example of how you can format your CMA exam answers for qualitative questions.

(ii) Proper Punctuation

Avoid writing words in all caps (LIKE THIS) and exclamation marks. This rule applies to most business writing anyway, so the same goes for your essay answers. Show emphasis, if necessary, by using your words, not your punctuation.

Organization

Your CMA essay response should have a clear beginning, middle, and end.

(i) Beginning Paragraph

The beginning should be introductory in nature and directly address the question. You can simply rewrite the question and include a summary of what you’ll discuss throughout your answer. Don’t copy directly from the question, though, because copying and pasting is generally not a good idea. Here’s an example:

Question : “Explain why there is a difference in net income between variable costing and absorption costing.”

Answer : “There is a difference in net income between variable costing and absorption costing because…”

(ii) Middle (Main) Paragraph

The middle paragraph is where you present CMA content-specific facts and ideas. You can choose to add a couple more paragraphs if you need to expand the ideas, such as adding examples to support your rationale.

Please note that the essays are graded positively, and partial credit can be given. That is, you get a point if the idea matches (or partially matches) with the one on the scoring rubric. This means that you should include as many points as possible as long as they are relevant.

 (iii) Ending Paragraph

The last paragraph should be a short conclusion, typically with a couple of sentences summarizing the ideas presented in the middle paragraph.

While you should spend time writing all the related points you can possibly think of, present your response clearly and logically. It is essential to:

• Read the question carefully to make sure you understand what is being asked
• Double-check that your ideas do not contradict themselves

How to Practice for the CMA Essay Questions

If you want to do your best on these essay questions, it’s essential you study and practice. We’ve talked about the study portion and about what to expect on the essay portion of the exam, but let’s talk about how you can practice for it when you don’t know exactly what your essay questions will be. First, a great CMA review study course is a good place to start. I’ll give you my recommendations for that in a bit.

Another great way to practice for the CMA essay questions is to practice writing mini-essays on the CMA exam material. You can turn MCQs into essay questions by writing out your answers and checking them against the written explanations. Try answering and writing just the way you would if you were taking the exam.

Practice using exam-mimicking software. Here’s an example where multiple windows within the essay section are open at the same time.

Readers’ CMA Exam Essay Questions

Let’s take a look at some questions from readers that might help you.

Question #1

If a question asks about a calculation, do I need to be formal and write it out as words, or can you type out the numbers?  For example, if I ask for depreciation expense for one month of an asset with a 1,200 dollar cost and a 12-month life, can I just write “$100” or “you divide 1,200 by 12 months to get 100 dollars per month which is your depreciation expense”?

Answer: You do need to show your work, but rather than saying, “you divide 1,200 by 12 months to get 100 dollars per month,” you could show “$1,200/12 months = $100 per month in depreciation”. This way, you will more likely get partial credit in case you use the right formula but just miss a number.

Question #2

I am practicing the essay questions, but there are no Excel capabilities or even a table creation function that make tabular presentations possible. Do you have any suggestions on how to address this? Even underlining the numbers to indicate summation is not possible.

Answer : The examiners have taken away the spreadsheet function in recent years. Since the reader is a Gleim customer, I’ve asked the Gleim Team , who has kindly provided the following answer:

There are no Excel or table formatting tools in the essays on the exam or in the Gleim materials. I have a few suggestions. First, practice with the Gleim essays because it will get [you] use[d] to that. Second, we have a video in the first study unit of our course in the supplemental videos section. This video is a how to on the essays. It could be very useful as it discusses formatting and how to answer them. Third and final, the key is to make sure that the answers are clear and organized and labeled well, but it doesn’t need to be formatted any special way as long as the grader can determine what you are answering and what your answer is.”

Question #3

How realistic are the Gleim CMA essay questions? I’m asking because some are really long and have tons of calculations. Are the Gleim CMA questions harder than what I’ll see on the actual CMA exam?

Answer : In my experience, yes. Gleim CMA makes sure that you can actually apply the concepts that you’ve learned. Therefore, the Gleim essays for CMA review may be more complex because they have to ensure you know how to answer questions on all the topics and subtopics. I actually appreciate that the Gleim questions are pretty tricky. If you’re like me, you may feel proud and well-prepared when you do well on the Gleim CMA exam simulation. That’s almost a sure sign that you understand the concept and can nail those questions on the real exam.

Learning Tools

Becker cma review advantage and cma review pro.

Becker CMA has become a popular course for CMA study, especially since the company completely revamped its CMA courses in 2021. After all, Becker has built a reputation for helping accounting professionals pass their exams (like the CMA and CPA exams) with flying colors.

Becker’s CMA courses have several strengths. First of all, the Becker platform uses adaptive learning called Adapt2U Technology, which creates a personalized learning experience. And although Becker’s test bank isn’t quite as large as Gleim’s, Becker gives you access to simulated exams that closely mimic the real CMA exam you’ll take at Prometric. Furthermore, the Becker Pro course even comes with virtual classroom instruction, one-on-one tutoring, and a CPE subscription.

Gleim CMA Review Mega Test Bank & Complete Course

Gleim CMA includes an online CMA test bank and provides sample CMA essay questions for every topic. They also show you how to format your answers (e.g., how to write out the calculations) in the answer explanations. You can get it through the integrated review product – Gleim CMA Review System – or purchase it separately.

If you can’t decide between these two, you can use our Gleim CMA vs. Wiley CMA analysis to help inform your decision.

CMA Exam Sample Essay Questions

The following essay questions examples come from the Institute of Management Accounting itself. You can find a PDF containing these questions as well as more CMA sample questions here .

The sample CMA essay question for part 1 gives an example scenario of a month’s worth of figures for a family-owned business called Brown Printing. There are then six questions for you to answer in your essay.

A sample essay question for Part 1 of the CMA exam

Similarly, the sample CMA Part 2 essay question gives you the scenario of four projects under consideration by a fictitious company called Grandeur Industries. You will then need to answer five questions about these projects.

A sample essay question for Part 2 of the CMA exam

Fortunately, the same document also provides CMA essay examples that fully and correctly answer the questions. Download the PDF to see what good answers looks like. Note the length of the answers, the standard English phrasing, and the shown work for the calculations

CMA Essay Tips

Here are some general tips to help you get through the essay questions.

Know your formulas . Use them to calculate what you need to do before you begin to write.

Read the entire question before answering . Get an idea of the scope of what the question is asking you.

Pay attention to verbs . The questions will give you a hint on how to answer based on what verb begins the sentence. Here are some common verbs: define, compare/contrast, calculate, examine, analyze, interpret, or apply. Make sure your answer fulfills the specific verb. That is, don’t spend time calculating if you’re supposed to be analyzing .

Show your work . I repeat this to emphasize it – even if you get the final answer wrong, you may be able to get some points if you show how you arrived at that answer.

Use your scratch paper . Don’t try to do everything in your head. Do, however, try to keep your handwritten notes somewhat neat, as you will need to type up your calculations to show your work. Refer back to the PDF of sample answers.

If you begin to run out of time, use an outline or bullet points . Remember, your goal is to include as many relevant points as possible. Never leave a question completely blank.

Don’t waste time formatting . As long as your writing itself is clear, it doesn’t have to look pretty to score points.

Frequently Asked Questions

Here are answers to some more general CMA essay questions.

What should I study for the CMA essays?

Studying for the essay portion is less about specific topics than it is about applying your knowledge of those topics. Make sure you know how to perform important calculations. Also, know how and why those calculations are used.

What are typical essay questions on the CMA exam?

Unfortunately, there’s really no such thing as a typical essay question, as they’re all different. However, familiarize yourself with the actions that the questions will ask you to complete: define, compare/contrast, calculate, examine, analyze, interpret, or apply.

If you get to the CMA essays, does that mean you will pass?

If you get to the CMA exam essay questions, all that means is you have scored at least 50% on the MCQs. However, if you don’t get to the essays, that means you haven’t passed.

For the CMA, can I fail multiple choice and go on to the essay anyway?

No. If you don’t pass the MCQ portion of the test, you will not even be able to look at the essay questions. Your test ends there.

Can you pass the CMA exam without doing well on the essays?

Yes, it is possible to do so well on the MCQs that you don’t need to pass the essay portion to pass the whole thing. However, it is never a good idea to make this your test-taking strategy! Since the essays don’t penalize you for wrong answers, only award you with points for the right answers, think of them as opportunities to increase your MCQ score.

Save on the Gleim CMA Premium Package.

For Your Further Reading

Don’t miss my mega-post on the ultimate CMA exam prep guide , with 50 actionable tips to help you nail the exam!

Also, you’ll want to sign up and receive my 10-day e-course with study planning strategies and test-taking tips for the CMA exam!

About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley) and the publisher of this and several accounting professional exam prep sites.

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CMA Exam Questions

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CMA exam multiple-choice questions

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• How to answer CMA essay questions

Where can I find free CMA exam questions?

Right here! You’ll get access to CMA exam questions for Part 1 and Part 2 when you sign up for a free account.

Our free questions are not simply a random test bank—they’ve been selected by our editors to follow the topic weighting of the CMA exam and are representative of the kinds of questions you may actually see on your CMA exam.

Just like in our courses, every question comes with explanations for the right and wrong answer choices.

When you’re done, you’ll get a score breakdown by topic area.

Click below to get started!

START NOW Start now part 1 financial planning, performance, and analytics

START NOW Start now part 2 strategic financial management

Our question library contains some retired exam questions released by the ICMA. Not all of the questions you receive will be retired questions.

The different types of CMA exam questions

The CMA exam is comprehensive and robust, and will challenge your understanding of the material and test-taking skills.

There are two main components of the CMA exam, both of which measure your understanding of financial planning, performance, and analytics as well as strategic financial management.

• Multiple-Choice

When you’re considering CMA exam questions and what could be thrown at you on the day of the test, knowing the tips, tricks, and best practices becomes essential. Keep reading to get all the information you need to prepare yourself for any and all CMA exam questions.

Access more CMA exam questions and resources in our course.

We’ve been preparing CMAs for over 40 years with a 99% satisfaction rate!

Passing the CMA exam requires you to be very familiar with multiple-choice questions (MCQs). You’ll need to focus much of your study and testing time on MCQs, so we’ve provided you with all the information, examples, and advice you need to prepare for them.

The CMA exam consists of two parts:

• Part 1: Financial Planning, Performance, and Analytics
• Part 2: Financial Decision Making

Each part of the exam consists of 100 MCQs and two essay questions. The MCQs are worth 75% of your total score for each exam part, and you must answer 50% of the MCQs correctly in order to progress to the essays.

The exam will present the MCQs in a random order; the order of the questions won’t reflect the order in which the Content Specification Outlines (CSOs) present the exam topics.

You’ll have 4 hours to complete the entire exam (3 hours for MCQs and 1 hour for essays). If you finish your MCQs early, you’re allowed to carry over any time remaining to the essays.

The ideal way to break down your time is:

• 2.5 hours to answer all of the MCQs
• 15 minutes to review your answers
• 1 hour and 15 minutes to respond to the essay questions

Multiple-choice question anatomy

The first obstacle you’re going to face on the CMA exam is the multiple-choice section. Knowing how to answer multiple-choice questions will be key to your CMA exam-day success.

To start, it’s important to understand the anatomy of a multiple-choice question.

• Question This is the question or scenario you’ll be responding to. The question stem includes the question and information. The information in multiple-choice questions can be classified as one of two types—important information and distracting information. Important information is the information you’ll need to know to answer the question. Distracting information is everything else. Distracting or extraneous information is all of the information within the question that has nothing to do with answering the question. Questions may provide a variety of distracting information. Most questions are straightforward and do not contain any extraneous information, so if you come across a “trick question,” read it again to make sure you’re not just overthinking things.
• Correct answer choice Questions sometimes have multiple answer choices that seem correct, but only one of the answer choices is the best answer.
• Incorrect answer choices Incorrect answer choices often seem correct at first glance or are the result of common calculation errors. These try to distract you from selecting the correct answer, just like the distracting information in the question, so it’s important to carefully eliminate each incorrect choice as you work through a problem. Incorrect choices are sometimes called “distractors” as they are designed to distract you from the correct answer choice.

CMA exam multiple-choice question examples

There are several different types of MCQs . Most CMA exam multiple-choice questions just feature four single-statement answer choices and look like the example to the right. 

Questions with negative stems

Some of these standard MCQs have a negative stem, which means that the question stem contains words like except , not , false , least , etc. Some examples of negative stem MCQs can be found below.

Which of the following is not a method of financing international trade?

All of the following statements in regard to working capital are true except…

The ICMA will most likely print the negative words in bold , as we did above, but you should always read the question carefully and completely. Answering these questions will be counterintuitive because your goal will be to select the wrong answer choice, and the remaining answer choices will all be correct. Giving the question stem all of your attention will help you detect when the exam’s expectations have switched in this way.

How to answer CMA exam multiple-choice questions

When it comes to taking the CMA exam, there are some tips that can help maximize your CMA exam score. Learn how to avoid common mistakes on multiple-choice questions and what to expect on exam day.

To give yourself the best chance at success with the multiple-choice sections, follow these tips:

Multiple-choice question answering tips

Work through the MCQ parts systematically Start the process of answering by reading the actual question, which is usually the last sentence of the stem. Use the question to determine what amount of information in the stem is important and what is non-essential. Write down the important information so it is easier to separate it from everything else in the stem.

Apply your exam time-management strategy when you answer practice MCQs If you allot 1.5 minutes per question to complete all 100 MCQs on each exam part, you’ll have 30 minutes that you can either spend reviewing your MCQ answers or carry over into the essay portion of the exam. On the exam, you should use as much of this time to review as you need and then move on to the essays. During your study sessions, you should simply stick to answering each MCQ in 1.5 minutes.

Learn from your mistakes You need to answer a lot of practice questions to prepare for the 200 total multiple-choice questions on the CMA exam, and each question you get wrong gives you the opportunity to avoid making the same mistake when it counts. You learn more from your mistakes than you do from getting everything right, so you should review answer explanations as you complete practice questions. Whether you answered correctly or incorrectly, review the answer explanations for all of the answers. The detailed answer explanations included in Gleim CMA Review will help you understand why the original answer you chose is wrong and why the correct answer indicated is right.

Focus on what the question is asking Read the question stem first, then go back and read the rest of the information provided to pull out what is needed. Don’t focus on all of the data that a question may provide until after you determined what the actual question is. This will help you filter out misleading information and save you valuable test-taking time.

Be on the look out for questions that ask for an exception. These questions will usually use words such as not , except , false , least , etc. These words will usually be bold on the CMA exam, but do not assume they all will be.

Predict the answer Right after you’ve read the question, your mind will be the most focused. Make a prediction about what the right answer should be before you read the answer choices. Once you have an answer in mind, scan the answer options to see if your answer is present. Even if your predicted answer is present, it’s a good idea to read the other options to ensure none of them are better.

Read all of the answer choices carefully Sometimes a question will have multiple answers that could be argued to be correct. Remember, you’re always looking for the answer choice that best answers the question.

In addition, sometimes reading the answer choices can clue you into what the question is asking. If all of the answer choices seem wrong based on your understanding of the question, you should probably reread the question to make sure you’re not missing something.

Watch for qualifying words like “always” or “never.” These words leave no room for exceptions and can often make an otherwise good answer incorrect because exceptions usually exist.

Answer every question on your first pass You don’t lose points for answering questions wrong on the CMA exam, so never leave any question blank. Even if you don’t know the answer, select one of the possible answers. This will at least give you a 25% chance of answering correctly, and if you’re able to first eliminate two answer choices through educated guessing, you can increase your odds to 50%.

If you don’t know the answer, use your educated guessing skills and mark the question for later review. If you have time remaining in your 3 hours, you can go back and review questions you’ve marked to see whether you’re able to determine the answer. If you still aren’t sure, stick with your first choice and don’t spend a lot of time worrying about it.

Don’t be afraid of making an educated guess The CMA exam covers a large amount of information, and even a well-prepared CMA candidate is likely to encounter some questions they don’t know the answer to. In these cases, an educated guess can make all the difference.

Follow these steps to improve your educated guessing technique:

• Rule out answers you think are incorrect right away. Many questions, including calculation questions, will have one or two answers that are easy to eliminate if you’re familiar with the material.
• Ask yourself whether one of the remaining answers more completely addresses the question than the others. You can usually narrow it down to two choices. Pick the best one of the two.
• Once you’ve narrowed your options down, trust your instincts. Unless you realize you read the question incorrectly or made a calculation error, your gut is usually correct. Talking oneself out of a correct answer is a common reason for selecting the wrong answer, so select the one that makes the most sense and move on. Use that time you would have spent deliberating where it can make a difference.

Find out how you’ll do on the exam with our free CMA Questions. Learn where you stand on each topic and review our answer explanations for every question!

Try Part 1 Questions | Try Part 2 Questions

CMA exam essays

Whether you’re an accounting professional or an accounting student, you probably prefer working with numbers over words. However, as a CMA candidate, you will need to be a proficient essay writer. Nowadays, CMAs are expected to have written communication among their on-the-job skills , and so the CMA exam requires you to write essays. Don’t worry though, we have everything you need to know about the essay portions of the CMA exam.

Why does the CMA exam include essays?

The CMA exam uses essays to test your ability to:

• Evaluate a given set of data
• Make a judgment when given alternative solutions
• Justify a selected course of action

Essays allow you to demonstrate these abilities and skills in a situation that more closely reflects the real world than multiple-choice questions can. Furthermore, CMAs are called upon to provide analyses and recommendations based on the numbers, and fulfilling these responsibilities requires strong written communication skills. As an accountant or accounting student, you’ve already learned how to effectively communicate. Therefore, you should focus on learning the topics and practicing in a realistic exam environment.

How many essays are on the CMA exam?

On top of the 100 multiple-choice questions (MCQs) covering these topics, there are two essay scenarios for each exam part. The essay section contains 8 to 14 written response or calculation questions based on two scenarios describing a typical business situation. There are typically 5 to 7 questions per scenario.

How much time do you have to complete the essays?

As a reminder, the total testing time allocated for each of the two CMA exam parts is 4 hours. You have 3 hours to answer all 100 MCQs. Spending the entire 3 hours answering the MCQs gives you a maximum of 1 hour total to finish the essays for both parts of the exam. When you finish the MCQ section in less than 3 hours, your remaining time from the MCQs will carry over and extend the one-hour time allocation for essays.

After you finish answering and reviewing the MCQs, you’ll have the option to move on to the essays if you’ve answered at least 50% of the MCQs correctly. If you don’t answer at least 50% correctly, you will not be allowed to move on to the essay section.

We recommend that you aim to answer each MCQ in 90 seconds to give yourself either 30 extra minutes to review your MCQ answers or to respond to the essays. You can also divide this time between the two activities however you see fit. Keep in mind, you cannot return to the MCQ section once you’ve entered the essay section, so you’ll need to complete your review of your MCQ answers before you move on to the essay section.

What are the essays like?

Refer to the images and descriptions below to learn about how a CMA exam essay question looks and operates.

Essay question sample

The following graphic is an example of how the essay question will look on the day of your test. Keep reading and cross reference the numbers on the page with their description below!

Essay question screen description

1. Question and Section Number Indicates which question you are answering and the section of the exam you currently have on-screen.

2. Time Remaining Displays the time you have remaining in the current section. Clicking it will display the total exam time remaining.

3. Progress Tracks the percentage of questions complete in the current section.

4. Finish Don’t click this button until you have responded to or flagged all of the essays. Clicking it will take you to a review showing questions unanswered or flagged, and from there you can move on to the voluntary survey section of the exam.

5. Navigation Menu A visual representation of where you are on the current section of the exam. You may use this menu to quickly move between questions. The numbered buttons change appearance according to their status (see below for more details).

6. Essay Scenario Displays a new screen with all of the information you will need to answer the questions. It will open as a PDF (see below for more details).

7. Answer Box Where you type your response to the current question.

8. Word Processing Tools These icons, when selected, enable you to select headings, bold, italicize, underline, left align, center, right align, undo, redo, and/or save your progress (much like a standard word processing program).

9. Question Displays the content of the current question.

10. Calculator A basic tool for simple computations. It’s similar to calculators used in common software programs.

11. Time Value Tables This gives you access to Time Value Tables for questions that require them. It will open as a PDF.

12. Preferences The gear icon leads to a preference menu with options for adjusting the text and background colors of the exam screens. If you experience discomfort or difficulty reading the exam screens due to the default color scheme, this menu is helpful for finding a more visually accessible palette.

13. Help Contains explanations of exam functionality, but you’ll be familiar with everything if you prepare with Gleim’s exam-emulating Review System.

14. Flag Mark a question for later review.

15. Back Move to the previous question.

16. Next Move to the following question.

Essay navigation menu buttons

As you’re taking the test, you will also run into essay navigation buttons. These buttons exist to help you navigate through the test—it’s helpful to know how they work and what they look like!

Current: This button is green and arrow shaped, and indicates the question you’re currently viewing. It becomes gray once you select an answer choice.

Complete : A dark gray rectangle indicates that you have selected an answer.

Incomplete : A green rectangle indicates that you have not selected an answer. It becomes arrow shaped when it is the question you are currently viewing.

Flagged : A green rectangle with a flag icon next to the question number indicates this a question you have not answered, and have marked for review.

Essay scenario screen

The following graphic demonstrates a practical scenario in which you write your actual essay. Before anything else happens, the answer box will open onto a separate screen, as seen below.

Essay scenario screen description

1. Zoom Using the “+” and “-” buttons (top left) you may manually zoom in or out, adjusting how large or small the essay text appears. You may also click on “Automatic Zoom” and quickly jump to a preset zoom distance.

2. Navigate In order to move to the next page of the essay scenario, simply click the “>” button (top right); to move to a previous page, click “<“. Similarly, to quickly jump to the final page, click “>|”, and to jump to the first page, click “|<“.

3. Scroll The gray scroll bar (right edge of the screen) allows you to scroll up and down the page. If you are zoomed in, and essay texts runs off-screen to the right, you are also able to scroll horizontally using the gray scroll bar at the bottom edge of the screen.

4. Grab Clicking on the green button with the hand icon (top left) will activate the ability to “grab” and move the essay page using the mouse. To “grab” the page, click and hold the left mouse button, then drag the page in any direction you wish.

5. View Page Thumbnails By clicking the green button with the double rectangle icon (top left), you are able to see thumbnail images of all pages of the essay scenario in a gray panel that appears to the left of the essay scenario screen. Opening this panel enables you to click on a thumbnail image of any page of the essay scenario to quickly open it in the main viewing area.

6. View Table of Contents By clicking the green button with the “bookshelf” icon (top right), you are able to view and open links to the Essay Scenario as well as all of the Time Value Tables.

How are the essays graded?

As a reminder, the breakdown for the two types of CMA exam questions count toward the following percentage of your total score:

• Essays: 25%

MCQs are automatically graded online, but essays are not. Instead, subject matter experts grade the essays, and you can receive partial credit for your answers. For example, if an essay asks for three reasons why a selected alternative action is good for a business, and you provide only two correct responses, you will receive partial credit for those two responses. Likewise, you will receive partial credit for having the correct formula for a calculated response question even if your answer contains a mathematical error resulting in the incorrect answer. The possibility of receiving partial credit is the reason why it’s important to show your work on the calculation questions on the CMA exam.

The ICMA grades essays on both the correctness of your answer, your knowledge of the subject matter, and writing quality (communication skills). The subject matter experts will only grade responses relevant to the question asked.

The specific criteria for grading the essays is:

• Use of standard English Text includes proper grammar, punctuation, and spelling.
• Organization Response is arranged logically and coherently.
• Clarity Analysis is clearly communicated with well-constructed sentences and appropriate vocabulary.

How should you answer essay questions?

Each question within the CMA exam essay section requires you either to write a response or complete a calculation pertaining to the scenario provided. Read the question carefully so you can identify the requirements. Then, outline the grading concepts and any related information on a piece of scratch paper.

When submitting a calculation, show your work! The more on-topic information you provide, the more partial credit you can receive. To create a table, use the spacebar to separate the columns, and label all columns and rows. Include all supporting calculations, but focus more on getting the question correct than perfecting the formatting.

When crafting a written response, be as detailed as possible and mention anything you can on the topic to maximize your score. Proofread and edit your answer once you finish your first draft, but only expand on it if time permits. You want to make sure you can address each question before the total testing time expires. So, you should hold off on improving your answers until you’ve responded to every question and started your review.

How can you practice writing essays?

When you prepare with the most-widely used CMA review course on the market, you’ll have everything you need to excel at the CMA exam essays. Gleim CMA Review covers the ICMA’s Content Specification Outlines and Learning Outcome Statements better than any other provider. We do this so you can be completely confident in your knowledge of the exam content.

Our course also includes the largest test bank and most realistic MCQs and essay questions on the market. Such a high-quality test bank affords plenty of practice and familiarity with the exam questions. See how well Gleim prepares you to pass by learning more about the exam from our free CMA exam guide .

Essay question tips for the CMA exam

Each part of the CMA exam has two essay scenarios. The CMA essays describe a scenario and ask several questions that require a written response, a calculation, or both. CMA essays are not graded by a computer. Your CMA essay will be graded by a subject matter expert, and partial credit may be given, so be sure to show your work!

While the CMA essays can seem daunting, they can be conquered with a good study plan and by employing these CMA essay tips:

Essay question answering tips

Skim the essay scenario before you read the questions By skimming the scenario, you’ll have context to help you understand the questions. Then you can read the questions to determine which areas of the scenario need your focus (this will help you avoid extraneous information).

Read the question to determine the requirements for the answer Focusing on the requirements of the question will let you identify the important information in the scenario. You will only get full credit if you answer all of the components of the question, so checking off requirements as you work through the essay can ensure you don’t miss anything.

Answer the easiest questions first Within any essay scenario, some questions will be easier than others. Getting a few easy questions solved before you tackle a tougher one can help you build your confidence and get your essay started. You can pick up a lot of points quickly. If you have to spend a lot of time on the other questions in the scenario, you won’t lose the opportunity to earn the easy points if you begin running out of time later.

Make sure your solution answers the question being asked It’s easy to get caught up in writing an explanation, and this can cause your essay to go off topic. Be sure to rein in any off-topic explanations and focus on answering the question that is being asked. Off-topic information won’t earn you any credit.

Show as much of your work as possible in your essay solution You can receive partial credit for any part of your CMA essay, so including all of your work allows graders to follow your analysis and assign all of the points you deserve. Even if your final answer is wrong, you could receive the majority of the credit for it if the bulk of your work is correct. For example, if your final answer is wrong because of a calculation error, but you showed your work and the grader was able to determine you used the correct formula and chose the correct numbers, you can get partial credit. Graders will not penalize you for a mistake multiple times. Even if the mistake you made appears throughout your response, you’ll only be marked off for it once.

Organize your reasoning so the graders can understand it easily Writing in an organized manner will ensure the graders can follow along with your process and thoughts. If a grader has to reread a section multiple times to understand what you’re trying to explain, that will probably cost you some points. Remember, the reason there are essay questions is to ensure candidates can effectively communicate the reason behind the numbers and make recommendations based on their calculations to management. Your communication skills are just as important as your ability to calculate the answer. This really boils down to writing short sentences, staying on topic, and organizing your essay in a logical manner.

Go above and beyond the question requirements when time allows Adding additional, on-topic content can be a great way to earn points on a CMA essay. If you have time and your essay’s organization allows it, adding more detail to a topic demonstrates that you understand the topic and might help improve the grader’s understanding of your essay. However, it’s easy to go too far, so be sure you have a plan for what additional detail you’d like to add. If you just start adding random or off-topic sentences to an otherwise well-organized essay, it could cost you.

Quickly proofread your responses to verify that they make sense Spending a few minutes rereading your responses will help you catch obvious errors that can cost you points. In addition, it’s a great opportunity to notice if anything is introduced out of order or doesn’t make sense.

CMA Part 1 Practice Test

Prepare for your test with realistic questions.

The Certified Management Accountant (CMA) certification exam is designed to assess the knowledge and skills of accountants. This page covers all of the information you need to know about Part 1 of the exam: Financial Planning, Performance, and Analytics.

Click “Start Test” above to take a free CMA Part 1 practice test, and check out our premium-quality CMA test prep resources by clicking the links below!

What’s on the CMA Exam Part 1?

The first part of the CMA exam contains 100 multiple-choice questions and two essays, and you will be given a time limit of 4 hours.

The CMA exam Part 1 topics are as follows:

• Financial statements
• Recognition
• Measurement
• Strategic planning
• Budgeting concepts
• Forecasting techniques
• Budgeting methodologies
• Annual profit plan and supporting schedules
• Top-level planning and analysis
• Cost and variance measures
• Responsibility centers and reporting segments
• Performance measures
• Measurement concepts
• Costing systems
• Overhead costs
• Supply chain management
• Business process improvement
• Governance, risk, and compliance
• System controls and security measures
• Information systems
• Data governance
• Technology-enabled finance transformation
• Data analytics

How many questions are on the CMA exam Part 1?

There are 100 multiple-choice questions and two essays on this part of the exam.

How long is the CMA exam Part 1?

The time limit for this part of the exam is 4 hours.

What is the passing score for the CMA exam Part 1?

To pass this part of the exam, you must achieve a minimum scaled score of 360.

By Peter Rench

Peter Rench joined Mometrix in 2009 and serves as Vice President of Product Development, responsible for overseeing all new product development and quality improvements. Mr. Rench, a National Merit Scholar, graduated magna cum laude with a Bachelor of Science in Mechanical Engineering and a minor in mathematics from Texas A&M University.

CMA Practice Exam

by Mometrix Test Preparation | This Page Last Updated: December 6, 2023

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CMA Exam Part 1: Financial Planning, Performance, and Analytics

Although you don’t have to take the CMA Part 1 first, passing both parts of the CMA exam is the first and most crucial step to becoming a CMA .

Since each part covers different topics, it’s important that you study for each part separately. If you decide to start with CMA Part 2 , study and pass the exam before starting on Part 1 content. I recommend using a solid CMA exam study guide and spending at least 16 weeks preparing for each part.

This article will give you a crash course on what to expect on CMA Part 1, starting with syllabus and exam topics. You’ll also find a simple study plan to get started.

Read on for everything you need to know to start preparing for the CMA Exam Part 1 and pass it on your first attempt .

Originally published in 2012, this article was updated and republished on March 13, 2024.

CMA Part 1 Syllabus

This comprehensive CMA Part 1 course outline covers all six exam topics, including external financial reporting decisions, planning and budgeting, performance management, cost management, internal controls, and technology and analytics.

The CMA exam is difficult, no doubt about it. The sheer quantity of content spanning both parts can be a little overwhelming. It is definitely a benefit that it is broken up the way it is.

The CMA syllabus for Part 1 covers the following:

• External Financial Reporting Decisions (15% of your score)
• Planning, Budgeting and Forecasting (20% of your score)
• Performance Management (20% of your score)
• Cost Management (15% of your score)
• Internal Controls (15% of your score)
• Technology and Analytics (15% of your score)

In order to do well, you’ll need to exercise the following skills:

• Comprehension
• Application

Keep in mind that the CMA exam requires a higher level of thinking than just reciting facts or working with basic equations. You’ll need to demonstrate the skills listed above in each knowledge area on the test.

Pro tip: Our expert-designed study guides help you master the core CMA subject matter, like financial statements, performance measures, and internal controls.

Let’s dive deeper into what you need to learn for those topics.

CMA Exam Part 1 Topics: Financial Planning, Performance and Analytics

Some of these topics may be familiar to you if you’ve completed an accounting degree before going after the CMA . Since there’s also a CMA experience requirement , some candidates already have practical knowledge of a few of these topics.

Even so, you’ll need to spend time reviewing everything and make sure you not only know the material, but can apply your knowledge under pressure.

Here is a further breakdown of each topic area, with a reminder of their percentage for relative weight range:

A. External Financial Reporting Decisions – 15%

This section of the CMA largely deals with financial statements for accounting information. External financial reports are viewed by people outside an organization, so they have to align with specific requirements.

Pro tip: Our comprehensive study modules allow you to dive deep into external financial reporting decisions, which make up a crucial 15% of the CMA Exam Part 1.

They may be prepared by accountants within a reporting entity and are usually some type of disclosure, statement, or summary. You’ll need a fairly thorough knowledge of external financial reporting and financial statements for this section of the CMA exam.

Financial Statements

For the balance sheet, income statement, statement of changes in equity, and the statement of cash flows, you should be able to:

• Identify the users of these financial statements and their needs
• Demonstrate an understanding of the purposes and uses of each statement
• Identify the major components and classifications of each statement
• Identify the limitations of each financial statement
• Identify how various financial transactions affect the elements of each of the financial statements and determine the proper classification of a given transaction
• Demonstrate an understanding of the relationship among the financial statements
• Demonstrate an understanding of how a balance sheet, an income statement, a statement of changes in equity, and a statement of cash flows (indirect method) are prepared

With respect to consolidated financial statements prepared under U.S. GAAP, the candidate should be able to:

• Define consolidated financial statements
• Define the two types of consolidation models: variable interest entity model and voting interest model
• Demonstrate an understanding of the three types of consolidation accounting: full consolidation, proportionate consolidation, and equity consolidation
• Demonstrate an understanding of intracompany balances and transactions that should be eliminated in consolidation

With respect to integrated reporting, the candidate should be able to:

• Define integrated reporting, integrated thinking, and the integrated report, and demonstrate an understanding of the relationship among them
• Identify the primary purpose of integrated reporting
• Explain the fundamental concepts of value creation, the six capitals, and the value creation process
• Identify elements of an integrated report (i.e., organizational overview and external environment, governance, business model, risks and opportunities, strategy and resource allocation, performance, outlook, and basis of preparation and presentation)
• Identify and explain the benefits and challenges of adopting integrated reporting

Recognition, Measurement, and Valuation

You should feel comfortable with:

Asset Valuation

• Identify issues related to the valuation of accounts receivable, including timing of recognition and estimation of the allowance for credit losses
• Distinguish between receivables sold (factoring) on a with-recourse basis and those sold on a without-recourse basis, and determine the effect on the balance sheet
• Identify issues in inventory valuation, including which goods to include, what costs to include, and which cost assumption to use
• Identify and compare cost flow assumptions used in accounting for inventories
• Demonstrate an understanding of the lower of cost or market rule for LIFO and the retail inventory method, and the lower of cost and net realizable value rule for all other inventory methods
• Calculate the effect on income and on assets of using different inventory methods
• Analyze the effects of inventory errors
• Identify advantages and disadvantages of the different inventory methods
• Recommend the inventory method and cost flow assumption that should be used for a company given a set of facts
• Demonstrate an understanding of the following debt security types: trading, available-for-sale, and held-to-maturity
• Demonstrate an understanding of the valuation of debt and equity securities
• Determine the effect on the financial statements of using different depreciation methods
• Recommend a depreciation method for a given set of data
• Demonstrate an understanding of the accounting for impairment of long-term assets and intangible assets, including goodwill

Valuation of Liabilities

• Identify the classification issues of short-term debt expected to be refinanced
• Compare the effect on financial statements when using either the assurance warranty approach or the service warranty approach for accounting for warranties

Income taxes (applies to Assets and Liabilities subtopics)

• Demonstrate an understanding of interperiod tax allocation/deferred income taxes
• Distinguish between deferred tax liabilities and deferred tax assets
• Differentiate between temporary differences and permanent differences, and identify examples of each

Leases (applies to Assets and Liabilities subtopics)

• Distinguish between operating and finance leases
• Recognize the correct financial statement presentation of operating and finance leases

Equity transactions

• Identify transactions that affect paid-in capital and those that affect retained earnings
• Determine the effect on shareholders’ equity of large and small stock dividends, and stock splits

Revenue recognition

• Apply revenue recognition principles to various types of transactions
• Demonstrate an understanding of revenue recognition for contracts with customers using the steps required to recognize revenue
• Demonstrate an understanding of the matching principle with respect to revenues and expenses, and be able to apply it to a specific situation

Income measurement

• Define gains and losses, and indicate the proper financial statement presentation for gains and losses
• Demonstrate an understanding of the treatment of gain or loss on the disposal of fixed assets
• Demonstrate an understanding of expense recognition practices
• Define and calculate comprehensive income
• Identify the correct treatment of discontinued operations

GAAP – IFRS differences

Major differences in reported financial results when using GAAP vs. IFRS and the impact on analysis:

• Identify and describe the following differences between U.S. GAAP and IFRS: expense recognition, with respect to share-based payments and employee benefits; intangible assets, with respect to development costs and revaluation; inventories, with respect to costing methods, valuation, and write-downs (e.g., LIFO); leases, with respect to lessee operating and finance leases; long-lived assets, with respect to revaluation, depreciation, and capitalization of borrowing costs; and impairment of assets, with respect to determination, calculation, and reversal of loss

B. Planning, Budgeting and Forecasting – 20%

This section of the CMA will test your ability to blend accounting concepts with practical skills in finance. This is where you will demonstrate the high-level strategy skills Certified Management Accountants are known for in planning, budgeting, and forecasting.

A lot of the study you will do for this section will require you to work through financial scenarios using sound budgeting and accounting principles.

This section makes up 20% of CMA Part 1 and covers six areas of competency.

Strategic Planning

In this section, you will need to understand everything that goes into strategic planning, such as:

• Discussing how strategic planning determines the path an organization chooses for attaining its long-term goals, vision, and mission, and distinguish between vision and mission
• Identifying the time frame appropriate for a strategic plan
• Identifying the external factors that should be analyzed during the strategic planning process and understanding how this analysis leads to the recognition of organizational opportunities, limitations, and threats
• Identifying the internal factors that should be analyzed during the strategic planning process and explaining how this analysis leads to the recognition of organizational strengths, weaknesses, and competitive advantages
• Demonstrating an understanding of how an organization’s mission leads to the formulation of long-term business objectives, such as business diversification, the addition or deletion of product lines, or the penetration of new markets
• Explaining why short-term objectives, tactics for achieving these objectives, and operational planning (master budget) must be congruent with the strategic plan and contribute to the achievement of long-term strategic goals
• Identifying the characteristics of successful strategic plans
• Describing Porter’s generic strategies, including cost leadership, differentiation, and focus
• Demonstrating an understanding of the following planning tools and techniques: SWOT analysis, Porter’s Five forces, situational analysis, PEST analysis, scenario planning, competitive analysis, contingency planning, and the BCG Growth-Share Matrix

Budgeting Concepts

Not to be confused with budgeting methodologies, the budgeting concepts included are:

• The role that budgeting plays in the overall planning and performance evaluation process of an organization
• The interrelationships between economic conditions, industry situation,
• and an organization’s plans and budgets
• The role that budgeting plays in formulating short-term objectives and in planning and controlling operations to meet those objectives
• The role that budgets play in measuring performance against established goals
• The characteristics that define successful budgeting processes
• The budgeting process facilitates communication among
• organizational units and enhances coordination of organizational activities
• The concept of a controllable cost as it relates to both budgeting and performance evaluation
• The efficient allocation of organizational resources is planned during the budgeting process
• The appropriate time frame for various types of budgets
• Who should participate in the budgeting process for optimum success
• The role of top management in successful budgeting
• The use of cost standards in budgeting
• Differentiate between ideal (theoretical) standards and currently attainable (practical) standards
• Differentiate between authoritative standards and participative standards
• The steps to be taken in developing standards for both direct material and direct labor
• The techniques that are used to develop standards, such as activity analysis and the use of historical data
• The importance of a policy that allows budget revisions that accommodate the impact of significant changes in budget assumptions
• The role of budgets in monitoring and controlling expenditures to meet strategic objectives
• The role of budgetary slack and its impact on goal congruence

Forecasting Techniques

Make sure you brush up on the following to tackle this section:

• Demonstrate an understanding of a simple regression equation
• Define a multiple regression equation
• Calculate the result of a simple regression equation
• Demonstrate an understanding of learning curve analysis
• Calculate the results under a cumulative average-time learning model
• Identify the benefits and shortcomings of regression analysis and learning curve analysis
• Calculate the expected value of random variables
• Identify the benefits and shortcomings of the expected value technique
• Use probability values to estimate future cash flows

Budgeting Methodologies

There are many different ways to budget. Make sure you understand the difference between:

Annual business plans (master budgets) Project budgeting Activity-based budgeting Zero-based budgeting Continuous (rolling) budgets Flexible budgeting

You will be tested on the following competencies related to budgeting methods:

• Define its purpose, appropriate use, and time frame
• Identify the budget components and explain the interrelationships among the components
• Demonstrate an understanding of how the budget is developed
• Compare the benefits and limitations of the budget system
• Evaluate a business situation and recommend an appropriate budget solution
• Prepare budgets on the basis of information presented
• Calculate the impact of incremental changes to budgets

Annual Profit Plan and Supporting Schedules

Planning is essential, and this concept covers the following types of budgets:

Operational Budgets Financial Budgets Capital Budgets

You should expect questions around the following:

• Explain the role of the sales budget in the development of an annual profit plan
• Identify the factors that should be considered when preparing a sales forecast
• Identify the components of a sales budget and prepare a sales budget
• Explain the relationship between the sales budget and the production budget
• Identify the role that inventory levels play in the preparation of a production
• budget and define other factors that should be considered when preparing a production budget
• Prepare a production budget
• Demonstrate an understanding of the relationship between the direct materials budget, the direct labor budget, and the production budget
• Explain how inventory levels and procurement policies affect the direct materials budget
• Prepare a direct materials budget and a direct labor budget based on relevant information and evaluate the feasibility of achieving production goals on the basis of these budgets
• Demonstrate an understanding of the relationship between the overhead budget and the production budget
• Separate costs into their fixed and variable components
• Prepare an overhead budget
• Identify the components of a cost of goods sold budget and prepare a cost of goods sold budget
• Demonstrate an understanding of contribution margin per unit and total contribution margin, identify the appropriate use of these concepts, and calculate both unit and total contribution margin
• Identify the components of a selling and administrative expense budget
• Explain how specific components of the selling and administrative expense budget may affect the contribution margin
• Prepare an operational (operating) budget
• Prepare a capital expenditure budget
• Demonstrate an understanding of the relationship between the capital expenditure budget, the cash budget, and the pro forma financial statements
• Define the purposes of a cash budget and describe the relationship between the cash budget and all other budgets
• Demonstrate an understanding of the relationship between credit policies and purchasing (payables) policies and the cash budget
• Prepare a cash budget

Top-Level Planning and Analysis

This section will dive into topics like:

Pro forma income Financial statement projects Cash flow projections

You should be prepared to tackle the following:

• Define the purpose of a pro forma income statement, a pro forma balance sheet, and a pro forma statement of cash flows, and demonstrate an understanding of the relationship among these statements and all other budgets
• Prepare pro forma income statements based on several revenue and cost assumptions
• Evaluate whether a company has achieved strategic objectives based on pro forma income statements
• Use financial projections to prepare a pro forma balance sheet and a pro forma statement of cash flows
• Identify the factors required to prepare medium- and long-term cash forecasts
• Use financial projections to determine required outside financing and dividend policy

Exam Secrets Handout

C. Performance Management – 20%

Topically, this section of the CMA exam will deal with flexible budgets, transfer pricing methods, a balanced scorecard, standard costing, variance analysis and more. Ideally, you’ll practice defining a standard cost system and identify the reasons why that system will work best.

There will be a lot of defining and developing as questions will address your ability to explain the relationships between metrics like KPIs and a strategic financial plan.

Making up 20% of your Part 1 exam, this section covers three main areas:

Cost and Variance Measures

• Analyze performance against operational goals using measures based on revenue, manufacturing costs, nonmanufacturing costs, and profit depending on the type of center or unit being measured
• Explain the reasons for variances within a performance monitoring system
• Prepare a performance analysis by comparing actual results to the master budget, calculate favorable and unfavorable variances from the budget, and provide explanations for variances
• Identify and describe the benefits and limitations of measuring performance by comparing actual results to the master budget
• Analyze a flexible budget based on actual sales (output) volume
• Calculate the sales-volume variance and the sales-price variance
• Calculate the flexible-budget variance by comparing actual results to the flexible budget
• Investigate the flexible-budget variance to determine individual differences between actual and budgeted input prices and input quantities
• Explain how budget variance reporting is utilized in a management-by-exception environment
• Define a standard costing system and identify the reasons for adopting a standard costing system
• Demonstrate an understanding of price (rate) variances and calculate the price variances related to direct material and direct labor inputs
• Demonstrate an understanding of efficiency (usage) variances and calculate the efficiency variances related to direct material and direct labor inputs
• Demonstrate an understanding of spending and efficiency variances as they relate to fixed and variable overhead
• Calculate a sales-mix variance and explain its impact on revenue and contribution margin
• Calculate and explain a mix variance
• Calculate and explain a yield variance
• Demonstrate how price, efficiency, spending, and mix variances can be applied in service companies as well as in manufacturing companies
• Analyze factory overhead variances by calculating variable overhead spending variance, variable overhead efficiency variance, fixed overhead spending variance, and production volume variance
• Analyze variances, identify causes, and recommend corrective actions

Responsibility Centers and Reporting Segments

• Identify and explain the different types of responsibility centers
• Recommend appropriate responsibility centers given a business scenario
• Calculate a contribution margin
• Analyze a contribution margin report and evaluate performance
• Identify segments that organizations evaluate, including product lines, geographical areas, or other meaningful segments
• Explain why the allocation of common costs among segments can be an issue in performance evaluation
• Identify methods for allocating common costs such as stand-alone cost allocation and incremental cost allocation
• Define transfer pricing and identify the objectives of transfer pricing
• Identify the methods for determining transfer prices, and list and explain the advantages and disadvantages of each method
• Calculate transfer prices using variable cost, full cost, market price, negotiated price, and dual-rate pricing
• Explain how transfer pricing is affected by business issues, such as the presence of outside suppliers and the opportunity costs associated with capacity usage
• Describe how special issues such as tariffs, exchange rates, taxes, currency restrictions, expropriation risk, and the availability of materials and skills affect performance evaluation in multinational companies

Performance Measures

• Explain why performance evaluation measures should be directly related to strategic and operational goals and objectives, why timely feedback is critical, and why performance measures should be related to the factors that drive the element being measured (e.g., cost drivers and revenue drivers)
• Explain the issues involved in determining product profitability, business unit profitability, and customer profitability, including cost measurement, cost allocation, investment measurement, and valuation
• Calculate product-line profitability, business unit profitability, and customer profitability
• Evaluate customers and products on the basis of controllable margin and recommend ways to improve profitability and/or drop unprofitable customers and products
• Define and calculate ROI
• Analyze and interpret ROI calculations
• Define and calculate residual income (RI)
• Analyze and interpret RI calculations
• Compare the benefits and limitations of ROI and RI as measures of performance and explain their appropriate usage
• Explain how revenue and expense recognition policies may affect the measurement of income and reduce comparability among business units
• Explain how inventory measurement policies, joint asset sharing, and overall asset measurement policies may affect the measurement of investment and reduce comparability among business units
• Define critical success factors (CSFs) and KPIs and discuss the importance of these measures in evaluating an organization
• Define the concept of a balanced scorecard and identify its components
• Identify and describe the perspectives of a balanced scorecard, including financial, customer, internal process, and learning and growth
• Identify and describe the characteristics of an effective balanced scorecard
• Demonstrate an understanding of a strategy map and the role it plays
• Analyze and interpret a balanced scorecard and evaluate performance based on the analysis
• Recommend performance measures and a periodic reporting methodology given operational goals and actual results

To nail this part, you should understand the ins and outs of actual vs. planned results, how to use flexible budgets to analyze performance, and be able to analyze cost expectations

Additionally, you will need to know the different types of responsibility centers and how to analyze profitability and return on investment using key performance indicators.

D. Cost Management – 15%

Cost management will deal with accounting and operational aspects of business, like costing, overhead, and supply chain. You will need to apply your understanding of how to use different methods to identify portions of mixed costs.

There will be a lot of analysis-oriented questions, including ones on process value, best practice and business reengineering.

The core concepts covered are:

Measurement Concepts

You should feel comfortable performing the following activities:

• Calculate fixed, variable, and mixed costs, and demonstrate an understanding of the behavior of each in the long and short term and how a change in assumptions regarding cost type or relevant range affects these costs
• Identify cost objects and cost pools, and assign costs to appropriate activities
• Demonstrate an understanding of the nature and types of cost drivers and the causal relationship that exists between cost drivers and costs incurred
• Demonstrate an understanding of the various methods for measuring costs and accumulating work-in-process and finished goods inventories
• Identify and define cost measurement techniques, such as actual costing, normal costing, and standard costing; calculate costs using each of these techniques; identify the appropriate use of each technique; and describe the benefits and limitations of each technique
• Demonstrate an understanding of variable (direct) costing and absorption (full) costing and the benefits and limitations of these measurement concepts
• Calculate inventory costs, cost of goods sold, and operating profit using both variable costing and absorption costing
• Demonstrate an understanding of how the use of variable costing or absorption costing affects the value of inventory, cost of goods sold, and operating income
• Prepare summary income statements using variable costing and absorption costing
• Determine the appropriate use of joint product and by-product costing
• Demonstrate an understanding of concepts such as split-off point and separable costs
• Determine the allocation of joint product and by-product costs using the physical measure method, the sales value at split-off method, constant gross profit (gross margin) method, and the net realizable value method, and describe the benefits and limitations of each method

Costing Systems

For job order costing and activity-based costing, the candidate should be able to:

• Define the nature of the system, understand the cost flows of the system, and identify its appropriate use
• Calculate inventory values and cost of goods sold
• Demonstrate an understanding of the proper accounting for normal and abnormal spoilage
• Discuss the strategic value of cost information regarding products and services, pricing, overhead allocations, and other issues
• Identify and describe the benefits and limitations of each cost accumulation system

For specific cost accumulation systems:

• Demonstrate an understanding of process costing and the concept of equivalent units (no calculations required)
• Define the elements of activity-based costing, such as cost pool, cost driver, resource driver, activity driver, and value-added activity
• Calculate product cost using an activity-based system, and compare and analyze the results with costs calculated using a traditional system
• Explain how activity-based costing can be utilized in service companies
• Demonstrate an understanding of the concept of life-cycle costing and the strategic value of including upstream costs, manufacturing costs, and downstream costs

Overhead Costs

To demonstrate your understanding of overhead costs, you should feel comfortable with the following:

• Distinguish between fixed and variable overhead expenses
• Determine the appropriate time frame for classifying both variable and fixed overhead expenses
• Demonstrate an understanding of the different methods of determining overhead rates (e.g., corporate-wide rates, departmental rates, and individual cost driver rates)
• Describe the benefits and limitations of each of the methods used to determine overhead rates
• Identify the components of variable overhead expense
• Determine the appropriate allocation base for variable overhead expenses
• Calculate the per-unit variable overhead expense
• Identify the components of fixed overhead expense
• Identify the appropriate allocation base for fixed overhead expense
• Calculate the fixed overhead application rate
• Describe how fixed overhead can be over- or under-applied and how this difference should be accounted for in the cost of goods sold, work-in-process, and finished goods accounts
• Compare traditional overhead allocation with activity-based overhead allocation
• Calculate overhead expense in an activity-based costing setting
• Identify and describe the benefits derived from activity-based overhead allocation
• Explain why companies allocate the cost of service departments such as human
• resources or information technology to divisions, departments, or activities
• Calculate service or support department cost allocations using the direct method, the reciprocal method, the step-down method, and the dual allocation method
• Demonstrate an understanding of how regression can be used to estimate fixed costs

Supply Chain Management

On the CMA exam part 1, you should be able to:

• Explain supply chain management
• Define lean resource management techniques
• Identify and describe the operational benefits of implementing lean resource management techniques
• Define material requirements planning (MRP)
• Identify and describe the operational benefits of implementing a just-in-time (JIT) system
• Identify and describe the operational benefits of ERP
• Explain the concept of outsourcing and identify the benefits and limitations of choosing this option
• Describe how capacity level affects product costing, capacity management, pricing decisions, and financial statements
• Explain how using practical capacity as the denominator for the fixed cost allocation rate enhances capacity management
• Calculate the financial impact of implementing the above-mentioned methods

Business Process Improvement

• Define value chain analysis
• Identify the steps in value chain analysis
• Explain how value chain analysis is used to better understand a company’s competitive advantage
• Define, identify, and provide examples of a value-added activity and explain how the value-added concept is related to improving performance
• Demonstrate an understanding of process analysis and business process reengineering, and calculate the resulting savings
• Define best practice analysis and discuss how it can be used by an organization to improve performance
• Demonstrate an understanding of benchmarking process performance
• Identify the benefits of benchmarking in creating a competitive advantage
• Explain the relationship between continuous improvement techniques and quality performance
• Explain the concept of continuous improvement and how it relates to implementing ideal standards and quality improvements
• Identify and describe the components of the costs of quality, commonly referred to as prevention costs, appraisal costs, internal failure costs, and external failure costs
• Calculate the financial impact of implementing the above-mentioned processes

E. Internal Controls – 15%

The procedures for internal controls are subject to legislation. This section will require you to know a lot of statutes and regulatory guidelines for things like governance, structures, policies, risk and audits.

Your CMA studies may provide text content or flashcards that help you memorize overarching rules, laws or acts. You will also need to have a firm grasp on how internal controls apply to different kinds of companies (private, public, etc.).

Governance, Risk, and Compliance

This topic covers risk control and policies for safeguarding assurances internally, as well as external audit requirements and corporate governance. Specifically:

• Demonstrate an understanding of internal control risk and the management of internal control risk
• Identify and describe internal control objectives
• Explain how a company’s organizational structure, policies, objectives, and goals, as well as its management philosophy and style, influence the scope and effectiveness of the control environment
• Identify the Board of Directors’ responsibilities with respect to ensuring that the company is operated in the best interest of shareholders
• Identify the hierarchy of corporate governance (i.e., articles of incorporation, bylaws, policies, and procedures)
• Demonstrate an understanding of corporate governance, including rights and responsibilities of the CEO, the CFO, the Board of Directors, the audit committee, managers, and other stakeholders; and the procedures for making corporate decisions
• Describe how internal controls are designed to provide reasonable (but not absolute) assurance regarding the achievement of an entity’s objectives involving (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting, and (iii) compliance with applicable laws and regulations
• Explain why personnel policies and procedures are integral to an efficient control environment
• Define and give examples of the segregation of duties
• Explain why the following four types of functional responsibilities should be performed by different departments or different people within the same function: (i) authority to execute transactions, (ii) recording transactions, (iii) custody of assets involved in the transactions, and (iv) periodic reconciliations of the existing assets to recorded amounts
• Demonstrate an understanding of the importance of independent checks and verification
• Identify examples of safeguarding controls
• Explain how the use of prenumbered forms, as well as specific policies and procedures detailing who is authorized to receive specific documents, is a means of control
• Define inherent risk, control risk, and detection risk
• Define and distinguish between preventive controls and detective controls
• Describe the major internal control provisions of the Sarbanes-Oxley Act
• Identify the role of the Public Company Accounting Oversight Board (PCAOB) in providing guidance on the auditing of internal controls
• Differentiate between a top-down (risk-based) approach and a bottom-up approach to auditing internal controls
• Identify the PCAOB preferred approach to auditing internal controls
• Identify and describe the major internal control provisions of the Foreign Corrupt Practices Act
• Identify and describe the five major components of COSO’s Internal Control-Integrated Framework
• Assess the level of internal control risk within an organization and recommend risk mitigation strategies
• Demonstrate an understanding of external auditor responsibilities, including the types of audit opinions that external auditors issue
• Identify and explain methods for testing the adequacy of internal controls, including inquiry, observation, inspection, and re-performance
• Explain how to remediate internal control deficiencies

Systems Controls and Security Measures

This section covers all sorts of controls, from network to backup controls, as well as business continuity planning. Here’s the full list:

• Describe how the segregation of accounting duties can enhance systems security
• Identify threats to information systems, including input manipulation, program alteration, direct file alteration, data theft, sabotage, viruses, Trojan horses, theft, and phishing
• Demonstrate an understanding of how system development controls are used to enhance the accuracy, validity, safety, security, and adaptability of systems input, processing, output, and storage functions
• Identify procedures to limit access to physical hardware
• Identify means by which management can protect programs and databases from unauthorized use
• Identify input controls, processing controls, and output controls and describe why each of these controls is necessary
• Identify and describe the types of storage controls and demonstrate an understanding of when and why they are used
• Identify and describe the inherent risks of using the internet as compared to data transmissions over secured transmission lines
• Define data encryption and describe why there is a much greater need for data encryption methods when using the internet
• Identify a firewall and its uses
• Demonstrate an understanding of how flowcharts of activities are used to assess controls
• Explain the importance of backing up all program and data files regularly and storing the backups at a secure remote site
• Define business continuity planning
• Define the objective of a disaster recovery plan and identify the components of such a plan, including hot, warm, and cold sites

F. Technology and Analytics – 15%

This section of the CMA exam is the most recent addition. Other areas were reduced to fit it in. It was added to make the exam more relevant to accounting professionals, who use a lot of technology and integrated systems to do their work.

Obviously the exam material can’t get platform-specific, so it deals with high level topics like how to use information systems, how to manage data, and how to automate financial tasks. It’s also important that CMAs understand data analysis, all of which is likely to be collected and reported on in a digital format.

Information Systems

• Identify the role of the accounting information system (AIS) in the value chain
• Demonstrate an understanding of the accounting information system cycles, including revenue to cash, expenditures, production, human resources and payroll, financing, and property, plant, and equipment, as well as the general ledger and reporting system
• Identify and explain the challenges of having separate financial and nonfinancial systems
• Define ERP and identify and explain the advantages and disadvantages of ERP
• Explain how ERP helps overcome the challenges of separate financial and nonfinancial systems, integrating all aspects of an organization’s activities
• Define relational database and demonstrate an understanding of a database management system
• Define data warehouse and data mart
• Define enterprise performance management (EPM) (also known as corporate performance management (CPM) or business performance management (BPM))
• Discuss how EPM can facilitate business planning and performance management

Data Governance

• Define data governance and data management
• Demonstrate a general understanding of data governance frameworks, including COSO’s Internal Control-Integrated Framework
• Identify the stages of the data life cycle, i.e., data capture, data maintenance, data synthesis, data usage, data analytics, data publication, data archival, and data purging
• Demonstrate an understanding of data preprocessing and the steps to convert data for further analysis, including data consolidation, data cleaning (cleansing), data transformation, and data reduction
• Discuss the importance of having a documented record retention (or records management) policy
• Identify and explain controls and tools to detect and thwart cyberattacks, such as penetration and vulnerability testing, biometrics, advanced firewalls, and access controls

Technology-Enabled Finance Transformation

• Define the system development life cycle, including systems analysis, conceptual design, physical design, implementation and conversion, and operations and maintenance
• Explain the role of business process analysis in improving system performance
• Define robotic process automation (RPA) and its benefits
• Evaluate where technologies can improve the efficiency and effectiveness of processing accounting data and information (e.g., artificial intelligence (AI))
• Define cloud computing and describe how it can improve efficiency
• Define software-as-a-service (SaaS) and explain its advantages and disadvantages
• Recognize potential applications of blockchain, distributed ledger, and smart contracts

Data Analytics

Business intelligence.

• Define Big Data and explain the volume, velocity, variety, and veracity of Big Data; and describe the opportunities and challenges of leveraging insight from this data
• Explain how structured, semi-structured, and unstructured data is used by a business enterprise
• Describe the progression of data, from data to information to knowledge to insight to action
• Describe the opportunities and challenges of managing data analytics
• Explain why data and data science capability are strategic assets
• Define business intelligence (BI) (i.e., the collection of applications, tools, and best practices that transform data into actionable information in order to make better decisions and optimize performance)

Data mining

• Define data mining
• Describe the challenges of data mining
• Explain why data mining is an iterative process and both an art and a science
• Explain the purpose of Structured Query Language (SQL) and explain its purpose
• Describe how an analyst would mine large data sets to reveal patterns and provide insights

Types of data analytics

• Explain the challenge of fitting an analytics model to the data
• Define the different types of data analytics, including descriptive, diagnostic, predictive, and prescriptive
• Define clustering and classification, and determine when each of these analytic techniques would be the appropriate tool to use
• Demonstrate an understanding of multiple regression and logistic regression and recognize when these techniques are appropriate
• Calculate the result of multiple regression equations as applied to a specific situation
• Demonstrate an understanding of the coefficient of determination (R squared) and the correlation coefficient (R)
• Demonstrate an understanding of time series analyses, including trend, cyclical, seasonal, and irregular patterns
• Identify and explain the benefits and limitations of regression analysis and time series analysis
• Define standard error of the estimate, goodness of fit, and confidence interval
• Explain how to use predictive analytics techniques to draw insights and make recommendations
• Describe exploratory data analysis and how it is used to reveal patterns and discover insights
• Define sensitivity analysis and identify when it would be the appropriate tool to use
• Demonstrate an understanding of the uses of simulation models, including the Monte Carlo technique
• Identify the benefits and limitations of sensitivity analysis and simulation models
• Demonstrate an understanding of what-if (or goal-seeking) analysis
• Identify and explain the limitations of data analytics

Data visualization

• Utilize table and graph design best practices to avoid distortion in the communication of complex information
• Evaluate data visualization options and select the best presentation approach (e.g., histograms, box plots, scatterplots, dot plots, tables, dashboards, bar charts, pie charts, line charts, bubble charts) for a given scenario
• Understand the benefits and limitations of visualization techniques
• Communicate results, conclusions, and recommendations in an impactful manner using effective visualization techniques

CMA Exam Part 1 Format

In addition to knowing what will be on the test, it’s important to know how the test is set up and structured, and what type of CMA exam questions to prepare for.

Currently, the CMA exam pass rate for both parts is just 45%. That should tell you just how hard the CMA is .

Don’t let that stop you, though, just use it to motivate your study efforts. Putting in the time to prepare, using a quality CMA course, and practicing the format as much as you can will give you a huge advantage on exam day.

The CMA exam format contains two standard elements, which are a multiple-choice section and an essay section.

The raw score (how many points you get based on how many right answers) is used to create your final score, which is calculated based on a uniform scoring system. For the CMA, the uniform scoring system runs from 0-500. A passing score is 360.

The exam is entirely computer-based and completed at a Prometric Testing Center , which has locations all over the world.

Here are some more details about the format of each section on CMA Part 1:

1. 100 Multiple Choice Questions

These account for 75% of your exam score. You will be allowed three hours for this section.

Each question on the multiple choice part of the exam is equally weighted. There are no points deducted for wrong answers, only points given for correct answers. With this format, it makes sense to attempt as many MCQs as you can, even when you’re not sure of the answer.

Not every test-taker is getting the same questions or having the same experience. Some versions of the exam may be slightly more difficult than others.

Make sure your review course for CMA Part 1 includes a large and realistic test bank. This will make sure you’ve encountered the full range of difficulty, wording, and question format.

To advance to the essay questions, you need to get at least 50% of the multiple choice questions correct.

2. Two Essay Questions

The essay questions are only accessible if you have passed the multiple choice section by correctly answering at least half of the questions.

Coming in second, you will be presented with two essay questions, both of which you must answer. You will write your answers to essay questions into a very simple word processor on the computer.

Some essays will require you to solve equations or do calculations, which can also be done within the word processor. Many people find it useful to do simulations of this, so they can get familiar with how to use the interface before the day of the test.

This section accounts for 25% of your exam score. You will be allowed one hour to write both of your essays.

CMA Part 1 Study Plan

In order to pass the first part of the CMA exam, you need a plan. Like I said, you want to allocate at least 16 weeks per section of the CMA exam, but this is only the start of the planning you need to do.

Let’s talk about solidifying a study schedule, understanding and practicing for test content and finding the right online course.

Over the course of four months, you will want to schedule your CMA study time, just like you would a job or school. Set in advance which days and for how many hours a day you plan to study.

It’s essential that you have a plan like this going in. You’ll be amazed at how many opportunities you have to slack off or procrastinate. Create a study plan and stick to it.

Question Types

Part of your CMA exam studies has to be preparing for the different question types. Many people benefit from using CMA test question banks, flashcards, and CMA textbooks to study. All of these should have extensive detail and give you plenty of opportunity to practice CMA question types.

I recommend using certified management accountant practice tests throughout your studies. Take one at the beginning to find out where you stand. As you progress and learn the content, keep taking practice exams periodically. This will help you track progress and improve your speed for the timed exam.

Online CMA Courses

The best way to put a framework in place is to sign up for a CMA online course. There are several to choose from.

The best CMA study programs include video instruction from experts, CMA practice questions, exam simulators, textbooks, and a variety of study materials. Many people also upgrade to include a CMA coach as this can provide one-on-one assistance that accelerates your progress.

Check out our comparison of CMA review courses to find your best option. CMA Exam Academy’s CMA study materials provide in-depth coverage of each of Part 1’s subjects, ensuring you’re prepared for every exam topic.

For a video walkthrough on how to set up your own CMA study plan, click play below.

CMA Part 1 FAQ

Here are some answers to frequently asked questions about the first part of the CMA exam.

How Many Units Are in CMA Part 1?

There are 100 multiple choice questions and two essay questions in part one of the CMA exam.

What is the CMA Part 1 Exam Test Time?

Part 1 of the CMA exam takes four hours to complete.

How Do I Study For CMA Part 1?

Studying for part 1 of the CMA exam should take about 16 weeks. Most people invest in a CMA study course, which will provide instructor-led sessions, textbooks, practice materials and more.

Do I Have to Pass the Question and Essay Part Simultaneously?

In the CMA exam, you will first tackle 100 multiple-choice questions. Only when you have passed those (50% or more) can you progress to the two essay questions.

Have more questions? Drop them below and I’ll provide answers!

73 Comments on “CMA Exam Part 1: Financial Planning, Performance, and Analytics”

I am very interesting to start CMA but I am working. How can I start and guide me on Online, Email and Soft copies are delivery to UAE.

We’re glad to hear you’re interested in pursuing the CMA!

We ship textbooks worldwide including the UAE. Our 16-Week Accelerator program includes everything you’ll need to study for the exams.

For all the details you’re welcome to click on the following link: 16-week Accelerator Program .

I am intending to appear for CMA Part 1 in 2024 (Q1). I am quite confused about which Study Material (for subject knowledge) to buy and then which question bank (for practice) to follow. I want a Study Text that should have detailed explanations of all areas of subject either in one book or several.

Our 16-week Accelerator Program per part includes all the study material you will need.

It includes digital textbooks and in paperback, test bank, formula guides, pre-recorded video and audio lectures, coaching support, and weekly coaching calls inside our private group.

To learn more about our 16-week Accelerator program, click on this link to direct you to our website: 16-week Accelerator Program .

How are you,,

I need to know is it important to have an accountant background to pass CMA exam? I am really interested in it.

Accounting knowledge is fundamental. Without it, it’s practically impossible to pass the CMA exams. Learn the fundamentals of accounting before attempting at the CMA exam. My program includes a textbook to help professionals like you transition into the accounting field and pass the CMA exam. For all the details you’re welcome to click on the following link: https://cmaexamacademy.com/product/premium-cma-coaching-combo-part-1-part-2/ref/nathan/ Reply back if you have any questions. Happy to help. Thanks

Hi Nathan, could you please describe the difference between CMA and CIMA? and which country I can use CMA Certification? is it possible to have only 4 months preparation for Part 1?

The CIMA is mostly recognized in the UK and the commonwealth countries. The US CMA, however, is a global designation recognized worldwide. I compare the two certifications in my blog post here .

As for your second question – yes, it is absolutely possible to for one part of the exam in 4 months or less. I actually offer a 16-week study plan per part in my coaching course at the Academy. Check it out here 🙂

If you have any other questions, just hit reply.

Thanks, Nathan

This Nazik Iam intersting to get CMA part 1 in Sept 2020 need your advice and from where can I start and need material CMA part1 2020 and exam

The first step is to enroll in CMA review course. If you’d like to study with me, you can enroll in my flagship course here .

If you have any other questions, don’t hesitate to hit Reply 🙂

Can I get Your CMA study guide

Sure thing. Click here to get your study guide for free.

This Sunny here I am going to attempt this exam in next year of Jan 2020 and I am not getting time due to job. I want to know that should I am able to clear the exam in first attempt. If I study for a month and than give exam .

I want to clear the exam the exam in first attempt. So please sir guide me regarding this.

And i am using the willey reference book is it okay for me or not

I recommend studying for at least 4 months (15 hrs/week) before taking the CMA exam for one part.

It’s not an easy exam and to increase your chances of passing on your first attempt you’ll need to devote more time to learning the material and practicing on exam simulations in a test bank.

As for your CMA textbooks, make sure that you have the latest edition that covers the 2020 exam changes . The exam is changing next year so it’s important to study form the most up-to-date materials.

Do you have a test bank, too? It’s a critical study tool as well.

Thank you, Nathan

Dear Mr Lathan Liao Iam working in KSA Ihave master degree in financial accounting Iwant to obtain CMA certification. but I have no time How can u pelp me to prepare for the exam Is it possible to send the overall course via my email with my best regard MUZZAMIIL

Hi Muzzamil,

My coaching course and the step-by-step study plan will slash your study time in half. If you’d like to enroll, please click here .

Hello Nathan,

In today’s competitive world just doing a course won’t get you a job unless you have experience. After doing CMA what about experience?

Regards, Deepti

In order to obtain the CMA certification, candidates are also required to submit the experience requirement to the IMA. Click here to read more about it.

You can fulfill the experience requirement either prior to, or within 7 years of passing the CMA exam.

For candidates who passed both parts but don’t have much or any work experience yet, informing the employer about the passed exam gives them a competitive edge over their peers, as it confirms that they’ve mastered the CMA material and are knowledgeable enough to take on a management accounting role.

Here’s another blog post on how to promote your CMA designation .

Let me know if this answers your question, Deepti, and also if you have any others 🙂

The link is not working. Could you please help?

I’m sorry about that! Could you please try accessing the links again?

Sir I want to know that it is very hard to crack CMA exam. I wanted to apply for this exam. Please tell me in which institute I must prefer for CMA entrance exam.

The exam is definitely not easy. To compare the best courses available and to assess which one is the best for you, please check out my Best CMA Review Course comparison chart . Thanks, Nathan

I am interested in the knowledge and its application rather than the exam itself. How can you help?

Since you’re only interested in the knowledge and its application, my suggestion is to purchase textbooks and a test bank to learn the material. The textbooks will provide you with the knowledge, and the test bank will help you apply that knowledge in various scenarios and test your level of comprehension.

Hi, I am Prakhar

how much time on a average it takes to clear CMA.

Hi Prakhar,

It takes around 200 hours of studying to prepare for one part of the exam.

Click here to learn more about the CMA certification and how to obtain it.

Let me know if you have any other questions 🙂

i want to study cma

Hi Suliman,

I can help you prepare for the CMA exam via my coaching course, check it here .

Let me know if you have any other questions.

I have been studying CMA for a couple months, but the materials from the Wiley CMA doesn’t really helpful, because it does not contain specific details. Can anyone suggest me the other materials to study?

I suggest you to supplement your current study materials with this coaching course . It includes in-depth video lectures on all topics tested on the CMA exam and unlimited 1-on-1 coaching so you can ask as many questions as you need to fully understand the material.

sir i have done mba in finance and has experience in differnt field . i want to do cma. please advise

You are eligible for the exam, however to become certified you’ll need to fulfill the experience requirement within 7 years of passing the CMA exam.

For more information, check the CMA roadmap here .

I am a b.com graduate..am planning to take up CMA course as my career.I am an average student..not that much sharp in accounting and finance field..do you feel it as a right move..?in which all fields should I be more careful regarding taking up CMA?reply me asap.

The process of preparing for the exam will help you sharpen your skills in management accounting, so you don’t need to worry about that, especially if you choose to study with a coach who will be by your side throughout your journey to answer all the questions you have and help you grasp the material faster and easier.

For more information, check the roadmap to becoming a CMA here .

Best wishes!

Im Vignesh Ravi, an IT graduate. Due to some issues I couldnt take up Commerce as my High-School Major but now I want to move to the Finance & Accounting field and I was adviced to take up CMA. Do you its a right move to make by taking up CMA exam now. If not, can you suggest any possible carrier that could take me to the Finance stream.

Looking forward to you speedy reply.

Hi Vignesh,

If you have a bachelor’s degree in any area, then the CMA will be the fastest track to get you into accounting and even position you to obtain a management accounting job in the future. You can learn more here .

I’m happy to answer any further questions you may have.

i am Abdiwahab , I am really interested to do the CMA .I am already having B.com . Since last 4 years i’m working as an accountant in a contracting company. really confused on this. but i would like to starta professional qualification. please advice me which one to start?

Hi Abdiwahab. If management positions are appealing to you, then go for the CMA, you won’t regret it. Wish you best of luck in your journey and if you need any help, don’t hesitate to reach out!

Will there be any questions in CMA Part 1 regarding significant differences between IFRS & U.S. GAAP.

Based on IMA’s LOS, there’s always chance that the question you mentioned will be tested but to a very limited extent.

Hi sir , I am really interested to do the CMA .I am already having M.com . Since 8 years i’m working as an accountant in a contracting company … is CMA is only related to cost accounting?? really confused on this. but i would like to get a professional qualification also.

To know about the CMA certification, please check the CMA Roadmap link here .

Dear Nathan,

I’m a finance guy with 4 years of experience in a Treasury Dept. I’m actually debating between CMA or CTP.

So my question is, what should I go for and why?

Hi Haitham,

If you are planning to specifically target Treasury as a long-term career, then, I would suggest pursuing CTP. But if you would like to expand your competitive reach in the corporate world, it would be best to take the CMA. Treasury is only one aspect of management accounting. Management accounting covers a lot of disciplines from accounting to economics to corporate finance. The CMA exam is a broader than CTP. It covers financial planning, analysis and decision-making (recently, the CMA expanded on external financial reporting). Regardless of what you choose, an investment in knowledge pays the best interest. Keep learning and improving, Haitham!

Cheers, Nathan

Hi Rajesh Here,

When can I complete the exam if I purchase the course in this month?

Thanks in advance

Regards, Rajesh

If you purchase the course this month, we can advise you to take the exam either on the last week of February or more preferably, in May.

Thanks and Regards, Nathan

Hi sir , First of all thank you for give good clarification about to CMA what exactly I needed.I am really interested to do the CMA .I am already having M.com . currently I am not working and house wife too …so I didn’t have working experience too ….is working experience required for doing CMA?

Hi Sherinaz,

The two-year working experience requirement can be fulfilled prior to or within seven years after passing the exam. You can take the CMA exam and attain the “CMA Passer” status until you complied with the CMA experience requirement.

Hi Nathan, Let me first congratulate you for the work you are doing,It is highly appreciable.Your help made me boost my confidence to do CMA. As you know CMA is uncommon as compared to CPA,so I always get confused to which course to do. Also just like you I have a full time job with household work,and I find very difficult to take out some time to study,So can you please help me as to how to approach to CMA. Also what % we need to pass each part(MCQ and Essay Individually) I am planning to part 1 first because it is comparatively difficult and I like to chase for that first.

Please check our CMA Courses using this link .

MCQ is 75% and Essay is 25% of your final score. You have to get 50% (or at least 50 correct MCQ items) of the 100 item MCQs in order to get to the essay portion. But that 50% should have a scaled score of at least 235 and have a perfect essay equivalent score of 125 to get a total of 360. The best way is to have at least 282 (75% x 375) scaled from your multiple choice questions or more and a decent score from your essay of 78-94 (62% to 75% of 125) to pass the exam.

I have appeared twice for part 1 and failed to succeed both the times. Can you recommend any possible solution so that I can complete my certification since my membership is expiring by the end of December-2016. Kindly suggest any study material in particular so that I can focus better.

Thanks, Regards,

We can help you through our CMA courses. Please check this link .

hi, can you please let me know whether we can use same 2015 study materials for coming years CMA preparation.

Yes, Ancy. The 2015 study materials can still be used for the coming years as there is no announced curriculum change from IMA yet.

Hello Mr. Nathan,

I am really interested to do the CMA. I am already having MBA finance. Currently I am working in Saudi Arabia. Could you please brief what should I do for getting the CMA.

Hi Renjeev,

You may check my blog post about how to become a CMA using this link .

thank you for your efforts

You’re welcome Badawy!

I want know is this totally correspondence course and how many parts are there to complete a CMA.

Thank you, Ibrar

The complete Part 1 syllabus is listed here. There’s also part 2 though.

I have taken CPA exams several times and have failed by couple of points, I’m at the point of giving up it’s been on and off trying to pass, I was wondering if maybe I should be getting my CMA instead and if it is an easier exam than the CPA?

Hi Maryelin,

It depends on what you are interested in doing long-term. I wrote an article comparing both designations . If you have any questions after reading it, let me know.

please note that cma exam isn’t available in my country sudan cause of sanction program so if I ready to take it will cost me a lot, your advice is much more important 😮

alsalm 3lykom. hello dear I hold an MBA degree in finance and banking specialization and I want to attain CMA please advice me and provide an appropriate strategy to start. thank you:)

I need to start, I am Egyptian guy and living in KSA, let me know how to start if you find time to help.

Thanks for your help in this

Hi this ayeda

I want to know if aim going to purchase the CMA study guide and coach when it’s the possibility to be deliver as my exam after 1 month part one and aim from UAE

thanks really and appreciated your achievements

Regards Ayeda

My study guide is delivered via email so you’ll get it within a few minutes after purchasing it 🙂

really I want to pass the exam and know more of accounting

Study diligently, memorize formulas, and take mock exams until you are scoring at least 80%. Best of luck!

I went 2 time for the CMA part 1 exam and did not pass , It the only part for me to get my cma I have chance till June 2014 , otherwise I had to take the 2 part . It seem my problem is the easy question . as I finish the MSQs and the essay opened for me .

I am planing to go in Janurary 2014 .

I really appreciate your support to help me pass this time

Hi Hindoia,

You are very close to achieving your CMA credential!! If your weakness area is the essay section, take a moment to read my latest blog post . I wrote all about the essay section of the exam. Let me know if you have any questions after reading it. I’m here to help 🙂

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CMA Exam Essay Questions – Everything You Should Know

Does thinking of the CMA exam essay questions stress you out?

This is the case for many candidates. It sure was for me.

Just thinking about being faced with such a daunting unknown had my heart beating a little faster and sweat forming on my brow.

But while the CMA exam is difficult , I’m here to tell you that you’re not alone, and not without assistance.

To help remove some of the stress from CMA exam essay questions, I’m going to cover what you can expect on exam day, how you’ll be scored, and everything else you should know.

I’ll explore some actionable strategies that you can employ to gain the most points possible during this section of the exam.

Let’s dive in.

In this article:

The Two Sections of the CMA Exam Format

Setting realistic expectations for exam day, how to answer cma exam essay questions to score the most points possible, some rock solid essay prep tips you need to try, the most successful strategy, 12 of my best cma essay hacks, cma essay faqs, additional resources to help you with the cma exam essay questions.

Originally published in 2016, this article was updated and republished on March 14, 2024.

Let’s start with a little refresher on the CMA exam format.

Each part of the CMA exam is accomplished in two sections.

The first section consists of multiple choice questions which you’ll have three hours to complete. If you finish early, your time rolls over into the remaining section, which is where you’ll tackle two essay questions.

CMA exam essay questions are graded by human graders using a grading guide. The evaluator’s goal is not to deduct points from your essay answers but to award points. This means that even partial answers are worthwhile, because they add points to your final grade.

CMA Part 1 Essay Questions

Part one of the CMA exam covers six areas:

• External Financial Reporting Decisions
• Planning, Budgeting, and Forecasting
• Performance Management
• Cost Management
• Internal Controls
• Technology and Analytics

The IMA sample question handout includes examples of essay questions. Based on these examples, you can expect scenario-based questions that require critical thinking and analysis.

For instance, the first question involves a family-owned printing business and provides you with a few basic details about the business and financial statements.

Some of the expected tasks include:

• Defining and explaining costing structures
• Calculating unit cost of goods sold
• Preparing income statements
• Identifying and describing the advantages of various costing structures
• And defining and explaining related financial principles.

Example Essay Question from Part 1

Let’s look at a specific example essay question from the IMA covering Part One of the exam – financial reporting, planning, performance, and analytics.

You’re presented with a detailed scenario like the one below.

Brown Printing: 

Brown Printing, a small family-owned business, began operations on March 1, manufacturing premium quality books. The owners have expertise in printing but no accounting knowledge or experience. The company’s independent accountant compiled the following data for the month of March. They have also requested an income statement.

• Sales price: $90 per book
• Number of units produced: 15,000 books
• Number of units sold: 10,000 books
• Direct materials cost: $15 per book
• Direct labor cost: $6 per book
• Variable manufacturing overhead: $4 per book
• Fixed manufacturing overhead: $240,000 per month
• Selling cost: $3 per book
• Administrative expenses: $160,000 per month

The owners want to understand these numbers and how they can use the information to run the business.

You are then presented with several points to consider and explain using the information given:

• Define and explain absorption costing and variable costing.
• Calculate the unit cost of goods sold and prepare the income statement for March using variable costing.
• Calculate the unit cost of goods sold and prepare the income statement for March using absorption costing.
• Identify and describe two advantages of using variable costing and two limitations of using absorption costing.
• Explain why there is a difference in net income between variable costing and absorption costing. Show your calculations.
• Define and explain throughput costing.

CMA Part 2 Essay Questions

Part two of the CMA exam covers:

• Financial Statement Analysis
• Corporate Finance
• Business Decision Analysis
• Capital Investment Decisions
• Enterprise Risk Management
• Professional Ethics

You can be asked to write an essay that falls within these topics, likely on a scenario with a few different variables involved.

For instance, a company that is reviewing capital budget submissions. You may be given projects, project beta value, and internal rate of return.

You would then be asked to calculate the required return for various projects (showing your works), define and explain terms, and identify additional approaches or recommendations.

Regardless of the framing, essay questions are going to address the conceptual building blocks behind decision-making, reporting, regulatory compliance, and more.

Exam Secrets Cheat Sheet

The IMA expects that your answers will convey the following cognitive skills:

• Comprehension
• Application

You will be expected to be thoughtful, concise, pithy, and make substantial statements that prove in-depth understanding of the topics.

Example Essay Questions from Part 2

In Part 2, you will be given a similar scenario and set of expectations to demonstrate your understanding of strategic financial management.

Here’s a specific example from the IMA.

Grandeur Industries:

Grandeur Industries is currently in the process of reviewing capital budget submissions from its various divisions. Grandeur uses the Capital Asset Pricing Model (CAPM) for a variety of purposes, including the determination of benchmark investment returns. The company’s overall cost of capital is 16% and its beta value is 1.2. The risk-free rate is 4% and the expected return on the market is 14%. The following projects from different divisions are under consideration and there is no capital rationing in effect.

You’re then presented with several points to consider and explain using the information given:

• Calculate the required return for all four projects. Show your calculations.
• Identify which of the four projects under consideration should Grandeur accept. Support your decision.
• Define and explain beta.
• Describe four factors that would impact the beta value that is chosen for use in evaluating a project.
• Identify alternative approaches to dealing with risk in capital budgeting.

Back to table of contents

In addition to knowing how the CMA exam will be formatted, it’s important to plan for and have realistic expectations around exam day.

Writing an essay is a high-concentration exercise. To add to the pressure, it comes after your multiple choice question section, which could mean you are more mentally fatigued.

Managing this cognitive demand, in addition to dedicating enough time to studying , is something you should expect and be prepared for.

There are a number of ways you can plan for it ahead of time.

Firstly, make sure you get a great night’s sleep the night before the exam. On the day of the exam, eat a nutritious meal and plan time buffers to alleviate all unnecessary stress or strain on exam day.

Finally, pace yourself.

At this point, you should have spent plenty of time studying and worked through a number of practice essays. While you would have never seen the exact content before, this will ensure that you are completely familiar with and prepped to tackle the questions they throw at you.

On the face of it, answering a CMA exam essay question is fairly straightforward:

You assess the presented scenario, respond by completing a calculation and then explain your work and reasoning.

But there are some strategies you can employ within this basic framework to achieve the highest possible score.

• First, learn to slow down and read and understand every single word of the question. The test isn’t trying to trick you, but the essay questions can be quite complex. You don’t want to miss a key component that will negatively impact your logic or work.
• Second, complete as much as you can and show your work. Remember that you are awarded points for partial answers, so you don’t want to give up early or simply gloss over the details. Make your work as comprehensive as possible, because even if you can’t finish, you can demonstrate that you were on the right track and had the correct lines of critical thought.

There are additional essay strategies that we teach to our students inside CMA Exam Academy, but wanted to share a couple of them with you in this article.

The time crunch for CMA exam essay questions can be daunting, but with the right strategies, you’ll be well-equipped to score as high as you can:

• Practice, practice, practice — understand the content and practice answering. Don’t go off on tangents. Learn how to study for the CMA exam , and practice staying focused.
• Calculate what is actually asked of you , not what you think is asked of you.
• Know your formulas . You may need to calculate figures before you can answer the question at hand. The best way to memorize formulas is to write them down repeatedly and remain aware of them.
• Make use of practice essay questions.
• Hire a CMA tutor . A tutor can help clarify concepts and review your essay practice answers.

Each CMA exam essay question has clues to guide you to the correct answer.

By paying attention to these clues and keeping an eye open for the following terms, you can determine what the essay is asking:

Use the above verbs in your essay response. Fully understanding and following the directives contained in those words is a foremost strategy – you can’t succeed without it.

Preparation and tuning into MVP phrases are absolutely key. Pair those with these 12 essay hacks and you’ll be well-prepared to master CMA exam essay questions:

• Stay positive and stop fearing the essay section.
• Write down your calculations, work, and assumptions to earn partial credit. Keep in mind, this all must be done on the computer’s exam simulation. Scratch paper used during your exam will get thrown out after you leave the testing center.
• Expect 3-6 questions for each essay scenario.
• Scroll between questions and scenarios within the essay section before you start answering. This will help you manage time.
• Play close attention to verbs (like I mentioned above).
• Read the entire question to understand all of the requirements.
• Focus on organization, clarity, and the use of standard English.
• Be aware that graders look for effective writing skills.
• Be concise and to the point. Bullet points are okay.
• Don’t leave questions blank. Even if you’re running out of time, write an outline of your main points.
• Make it easy for graders to give you points by showing you work.
• Use all of the time available and use it well.

I want to answer some of the most common questions we hear about the essay questions on the CMA exam.

What types of essay questions are on the CMA exam?

The essay questions follow the same general format. You’ll be presented with a brief scenario and then asked between three and six questions. You’ll use the information presented in the scenario to answer the questions by applying financial concepts and principles. Any exam prep courses you choose should have specific examples of essay questions so you will feel comfortable with them on test day.

How are CMA exam essay questions graded?

The human graders want to give you points in this section. They’re looking for straightforward English in your answers—no need to break out your creative writing skills. You can earn partial credit, so you want to show your work so they can award as many points as possible. This means it’s better to at least answer part of the question or jot down a few thoughts because points will not be deducted for incorrect answers.

What are the best strategies for preparing for CMA exam essay questions?

There are a few steps you can take to feel prepared for the essay questions. First, you’ll want to have a study schedule in place to ensure you understand each of the subjects you’ll be presented with on the test. You should also choose a review course that has practice questions included so you are familiar with the format and feel comfortable with how best to tackle the answer.

Can you pass the CMA without answering the essays?

No. No one can pass the CMA exam without answering the essay questions – even getting a perfect score on the multiple-choice questions will not give you a pass. As stated earlier, you don’t lose points for incorrect answers, so it’s worth it to use all of your exam time to answer as many essay questions as possible.

At the CMA Exam Academy, we have a ton of great resources that can help you with the CMA exam essay questions:

• Our 16-week Accelerator Course
• Online Test Bank
• Textbooks in paperback

Have specific questions about CMA exam essay questions? Drop them below and we’ll talk in the comments.

Hi, I’m Nathan Liao (aka the CMA Coach)! For the last 10 years, over 82,000 accounting and finance pros came knocking at my door seeking guidance and help. If you’re also aiming to conquer the CMA exam on your very first try—without wasting away time or money—you’ve found your ultimate guide. Dive in deeper to discover more about me and the dedicated team that powers CMA Exam Academy.  Click here and let’s embark on this journey together!

Found it helpful? Share it with others

14 Comments on “CMA Exam Essay Questions – Everything You Should Know”

Dear mr: nathan

What the waight of essay questions is it .25 of total score of it is have an equal to MCQ .50 ?

Your respectful Abdalla Altayeb

Hi Abdalla,

75% of your overall score will come from the MCQ section and 25% from the essay section.

You can read more about passing scores in the following article: Understanding the CMA Exam Passing Score

Hi Nathan, I just wanted to know that the eligibility to reach essay questions in exams is to score 50% of 375 (mcq) or 50% of total score of 500.

Thanks & Regards Suyash Madkaikar

You would need to answer 50 MCQs correctly to reach the essay section of the exam.

Thanks, Nathan

Can I get any specific essay material for both the parts (ie,part 1 and 2) prepared by you?

Hi Ganpathy, we have essays in our test bank that you can use to practice with. Please click here to check it out. Thanks, Nathan

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Dear Sir, I want the CMA Part 2 book as well which is prepared by Mr.Nathan. Is there a way that I can get the Part 2.

Kindly assist me.

Please check this link for the CMA Part 2 book:

https://cmaexamacademy.com/product/cma-part-two-textbook-full-color/

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CMA USA EXAM ESSAY QUESTIONS, A COMPREHENSIVE GUIDE

Are you worried about the CMA USA exam essay questions? You're not by yourself. This resource will cover all you need to know about these difficult CMA USA exam components, from what to anticipate on exam day to scoring methods that can help you pass.

Understanding the CMA USA Exam Format

The CMA USA exam consists of two sections for each part. The first section contains multiple-choice questions, while the second contains two essay questions. Understanding the format is essential for effective planning.

CMA USA Part 1 Essay Questions

CMA USA Part 1: Areas of Focus

1. External Financial Reporting Decisions:

This section assesses your knowledge of financial reporting principles and practices. Candidates may be asked questions about financial statement preparation and analysis, disclosure requirements, and the impact of accounting principles on reported financial information.

2. Planning, Budgeting, and Forecasting:

Candidates are evaluated on their ability to create detailed plans, budgets, and forecasts. Understanding the budgeting process, forecasting techniques, and integrating these processes into overall strategic planning are all part of this.

3. Performance Management:

Performance management is concerned with assessing and improving organizational performance. Variance analysis, key performance indicators, and the use of performance data to make informed managerial decisions are examples of questions in this category.

4. Cost Management:

This section delves into cost accounting principles. Questions on cost classifications, cost behavior, cost-volume-profit analysis, and various costing methodologies can be expected.

5. Internal Controls:

Internal controls are essential for ensuring the accuracy and dependability of financial data. Internal control systems, risk assessment, and the design and evaluation of control procedures are examples of questions that may be asked.

6. Technology and Analytics:

Because technology is becoming more important in modern business, this section assesses candidates on their knowledge of information systems, data analytics, and the use of technology in managerial decision-making.

Example Essay Question:

Brown Printing Scenario:

Brown Printing, a small family-owned business, has only recently begun operations in the production of high-quality books. The scenario presents key financial data for March, such as sales price, units produced and sold, direct materials and labor costs, variable and fixed manufacturing overhead, and various other expenses.

Candidates are required to:

Define and explain absorption costing and variable costing.

Calculate the unit cost of goods sold and prepare the income statement for March using variable costing.

Calculate the unit cost of goods sold and prepare the income statement for March using absorption costing.

Identify and describe two advantages of using variable costing and two limitations of using absorption costing.

Explain why there is a difference in net income between variable costing and absorption costing, supported by calculations.

Define and explain throughput costing.

This example shows the difficulty of CMA USA Part 1 essay questions, which require candidates to integrate knowledge from multiple areas and apply it to real-world scenarios.

CMA USA Part 2 Essay Questions

CMA USA Part 2: Areas of Focus

1.Corporate Finance:

Focus:  Understanding financial management within organizations.

Topics:  Capital structure, financing options, dividend policy, working capital management, and mergers/acquisitions.

2. Financial Statements:

Focus:  Analyzing and interpreting financial statements.

Topics:  Income statements, balance sheets, statement of changes in equity, and cash flow statements. Emphasis on financial performance and position analysis.

3. Decision Analysis:

Focus:  Applying decision-making tools and techniques.

Topics:  Cost-volume-profit analysis, pricing strategies, risk assessment, and decision models. Evaluating alternatives and making informed decisions.

4. Investment Decision:

Focus:  Evaluating investment opportunities and strategies.

Topics:  Capital budgeting, time value of money, risk analysis, and project evaluation. Assessing the financial viability of investment projects.

5. Risk Management:

Focus:  Identifying and managing financial risks.

Topics:  Financial derivatives, hedging strategies, and risk assessment. Addressing uncertainties and mitigating potential financial losses.

6. Professional Ethics:

Focus:  Understanding ethical considerations in financial management.

Topics:  IMA's Statement of Ethical Professional Practice, ethical decision-making, and responsibilities to stakeholders. Upholding ethical standards in the financial profession.

Example Question Details - Grandeur Industries:

Grandeur Industries is a scenario-based essay question in which candidates must demonstrate expertise in the following areas:

1. Calculate the Required Return:

Candidates must use the Capital Asset Pricing Model (CAPM) to calculate the required return for the various projects presented in the scenario.

2. Explain Beta:

Candidates must provide a thorough explanation of the concept of beta in the context of assessing project risks.

3. Address Risk in Capital Budgeting:

Candidates must discuss and provide insights into addressing risks associated with capital budgeting decisions in the essay question.

Cognitive Skills Assessed:

The essay questions in Part 2 aim to assess candidates' cognitive skills at various levels, including:

Knowledge:  Understanding key concepts and principles.

Comprehension:  Grasping the meaning and implications of financial information.

Application:  Applying financial tools and techniques to real-world scenarios.

Analysis:  Breaking down complex financial situations to extract relevant information.

Synthesis:  Integrating information to make informed financial decisions.

Evaluation:  Assessing the effectiveness and viability of financial strategies.

Part 2 requires a deep understanding of financial principles as well as the ability to apply them in a variety of scenarios, demonstrating a candidate's proficiency in strategic financial management.

Setting Realistic Expectations for Exam Day

Essay writing requires a lot of concentration, especially after answering multiple-choice questions. Adequate preparation is required, including a good night's sleep and a nutritious meal on exam day.

Strategies for Answering CMA USA Exam Essay Questions

Read this carefully: Every word of the question should be understood.

Display Your Work: Partial answers earn points, so be thorough.

Use Verbs in Directives:  Incorporate terms like calculate, analyze, and interpret into your responses when responding to directives.

Rock Solid Essay Prep Tips

Practice Regularly:  Understand the content and stay focused.

Calculate What's Asked:  Address the specific requirements of each question.

Memorize Formulas:  Ensure you're familiar with necessary formulas.

Use Practice Essay Questions:  Familiarize yourself with the exam format.

Consider a CMA USA Tutor:  Get personalized guidance for better understanding.

The Most Successful Strategy

To guide your response, pay attention to clues in each essay question and focus on keywords such as calculate, analyze, and apply.

12 CMA USA Essay Hacks

Stay Positive:  Approach the essay section with confidence.

Document Your Work:  Earn partial credit by showcasing calculations.

Expect Multiple Questions:  Each essay scenario may have 3-6 questions.

Scroll Before Answering:  Manage your time efficiently by reviewing all questions.

Focus on Verbs:  Pay close attention to directive verbs.

Read Entire Questions:  Understand all requirements before answering.

Prioritize Clarity:  Organize your response with effective writing skills.

Be Concise:  Stick to the main points and consider using bullet points.

Avoid Leaving Questions Blank:  Even an outline can earn points.

Facilitate Grading:  Make it easy for graders to award points by showing your work.

Use All Available Time:  Utilize your time wisely during the exam.

Mastering CMA USA exam essay questions necessitates careful planning and confidence. By following these suggestions, you will be well-prepared to tackle this difficult section and maximize your chances of success.

Top 5 Recommended CMA USA Books and Study Materials for 2024

To assist you in selecting the best study materials for your CMA USA exam preparation in 2024, iProledge recommends the following options:

Becker US CMA Review System.

Wiley US CMA Review System.

Hock US CMA Study Material.

Surgent US CMA Review System.

Gleim USA CMA Study Material.

Click here to know more:

1. What are the key areas covered in Part 1 of the CMA USA exam essay questions?

External Financial Reporting Decisions, Planning, Budgeting, and Forecasting, Performance Management, Cost Management, Internal Controls, and Technology and Analytics are the six topics covered in Part 1.

2. How are CMA USA exam essay questions scored, and what is the grading approach?

Human examiners grade essay questions using a grading guide. The goal is to award points for correct answers rather than deduct marks for incorrect answers, which makes partial answers useful for scoring.

3. How can candidates effectively prepare for the CMA USA essay section?

Regular practice, understanding the content, memorizing necessary formulas, and using practice essay questions all contribute to effective preparation. Consider hiring a CMA USA tutor for more personalized instruction and comprehension.

4. What is the significance of directive verbs in CMA USA essay questions?

Directive verbs like calculate, analyze, and interpret provide hints to help guide responses. Understanding and adhering to these guidelines is critical for meeting the specific requirements of each essay question.

5. How can candidates optimize their performance on exam day for the essay section?

To maximize performance, candidates should get a good night's sleep the night before the exam, eat a nutritious meal on the day of the exam, and manage their time effectively. Concentration is essential for success during the high-demand essay section that follows the multiple-choice questions.

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CMA Part 1 Exam

Certified Management Accounts play an important role in business operations. Not only do they have the necessary accounting skills, but they also show they have the management acumen to make business decisions. These professionals have attained the Certified Management Accountant (CMA) Certification from the Institute of Management Accountants. The exam contains two parts — Part I and Part II — and candidates are required to pass both. This guide provides a test overview of Part I and offers excellent study materials to help you prepare.

What are the eligibility requirements to take the Certified Management Accountant exam?

Candidates must hold a bachelor’s degree from an accredited institution. If the college or university is not accredited, candidates must have their qualifications reviewed by an independent agency. Candidates in the United States must have received certification as a financial analyst (CFA), internal auditor (CIA), fraud examiner (CFE), or treasury professional (CTP). Candidates also must meet certain work requirements. Please consult the Institute of Management account’s website for all the stipulations.

What are the fees associated with the exam?

Candidates pay a $245 to join the Institute of Management Accounts, a $250 CMA Entrance fee, and a $415 exam fee.

How many questions are on the exam?

There are 100 multiple-choice and two essay questions on the test.

What’s the exam’s test time?

Candidates have three hours to finish the multiple-choice portion of the exam. Candidates have 30 minutes for each essay, for a total of one hour. That makes the entire test time four hours.

What’s the multiple-choice section’s minimum passing score?

Candidates must get at least half of the questions right (50%) in order to proceed to the essay portion of the test.

Do I have to pass both the multiple-choice and essay portion of the Certified Management Accountant exam?

No. The total score from both sections determines whether a candidate passes the test.

What is the exam’s passing score?

The exam has a scaled score of 0 to 500. The passing score is 360.

When can I take the test?

Candidates can take the test during one of three testing windows, in January/February, May/June, and September/October.

Where can I take the test?

A third-party, independent testing center delivers the CMA exam. There are hundreds of test centers across the country.

What’s on Part I of the Certified Management Accountant exam?

Part I contains five areas:

• External Financial Reporting Decisions topics include financial statements like balance sheets; assets valuation;, and income measurement.
• Planning, Budgeting, and Forecasting includes strategic planning issues like long-term goals; budgeting and forecasting; operational, financial and Capital budgets; zero-based budgeting; and cash flow projections.
• Performance Management includes standard cost systems; organizational segment reporting; and product, business unit, and customer profitability analysis.
• Cost Controls includes actual, normal, and standard costs; job order, process, activity-based, and life-cycle costing; overhead; management of the supply chain; improvement of business processes; constraints and throughput costing theories; and bests practice and cost of quality analysis.
• Internal Controls includes structure, policies, and risk; internal auditing; and network and backup controls.
• Technology and Analytics includes information systems, data governance, technology-enabled finance transformation, and data analytics.

Will I need to show identification at the test center?

Yes. Candidates must show a government-issued ID, like a driver’s license. Candidates without a government ID must show two forms of ID, both with a signature and one with a photo.

Can I bring my own calculator on test day?

Yes. Please consult the rules on calculator types candidates may bring into the test center.

When should I arrive at the test center?

You should arrive at the test center at least 30 minutes before your exam time. Anyone who arrives more than 15 minutes late will not be allowed to take the exam and will lose their exam fees.

When will I receive my score report for the Certified Management Accountant exam?

Candidates will receive the test results about two weeks from the end of the testing window.

What are the best study materials I can get for this exam?

Mometrix has the best study materials you can buy. We use professionals in the education field to put together a comprehensive study guide . Our guide reviews important areas including budgeting, performance measurement, material and sales price variances, earning power, and much more. Our outstanding flashcards are the perfect study tool. You can take them anywhere and grab a few minutes to study. These are the materials that can help you prepare for the Certified Management Account.

CMA Part 1 Study Guide and Flashcards

Get practice questions, detailed study lessons, and complex subjects broken down into easily understandable concepts.

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CMA Program Essay Questions For Practice Parts 1 and 2

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3. The basic concepts implicit in internal accounting controls include the following.

• The cost of the system should not exceed the benefits expected to be attained.
• The overall impact of the control procedure should not hinder operating efficiency.

Which one of the following recognizes these two factors?

a. Limitations. b. Management responsibility. c. Methods of data processing. d. Reasonable assurance. Correct answer d. The benefits of internal controls must always exceed the costs of implementing them. Implementing a system of absolute assurance is overly costly; thus, only reasonable assurance can be obtained. CMA Exam Part 2: 4. Which one of the following would have the least impact on a firm’s beta value? a. Debt-to-equity ratio. b. Industry characteristics. c. Operating leverage. d. Payout ratio. Correct answer d. Beta is an index of systematic risk and measures the sensitivity of a stock’s returns to changes in returns on the market portfolio. A firm’s beta is determined by the risk characteristics of the firm. Of the options given, the payout ratio has the least impact on the firm’s riskiness and therefore its beta value. 5. A company that prides itself on its innovation revised an existing popular brand without conducting sufficient market research. By taking this action, the company exposed itself to what types of risk? a. Credit risk and strategic risk. b. Hazard risk and credit risk. c. Operational risk and hazard risk. d. Strategic risk and operational risk. Correct answer d. Strategic risk includes brand risk and changing customer needs; operational risk includes customer satisfaction and change integration. Hazard risk deals with insurable events, and financial risk includes items such as credit risk. The last two are not applicable in the situation given.

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