Certified Management Accountant Trivia 5

Question 1

Which of the following is an example of a non-financial performance measure that might appear on a balanced scorecard?

Accepted Answer

Customer satisfaction score

Answer

Customer satisfaction scores are non-financial metrics used in the customer perspective of the balanced scorecard to track performance beyond accounting numbers.

Question 2

The Sarbanes-Oxley Act of 2002 was primarily enacted in response to:

Accepted Answer

Major corporate accounting scandals such as Enron and WorldCom

Answer

SOX was passed in 2002 following major accounting fraud scandals at Enron, WorldCom, and others, to strengthen corporate governance and financial reporting.

Question 3

Net present value (NPV) is defined as:

Accepted Answer

The present value of future cash inflows minus the initial investment

Answer

NPV equals the sum of discounted future cash inflows less the initial investment outlay; a positive NPV indicates value creation.

Question 4

Which pricing strategy sets price based on the target cost derived from a competitive market price minus a desired profit margin?

Accepted Answer

Target costing

Answer

Target costing starts with the market price and subtracts the desired profit to determine the maximum allowable cost, driving cost reduction efforts.

Question 5

Return on Investment (ROI) for a business segment is calculated as:

Accepted Answer

Operating income divided by average invested assets

Answer

Segment ROI = Operating income ÷ Average invested assets, measuring how effectively a division uses its asset base to generate profit.

Certified Management Accountant Practice Test

Certified Management Accountant Practice Test

Certified Management Accountant Trivia 5