CIMA Cheat Sheet 2026

The 30 highest-yield CIMA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which inventory valuation method is prohibited under IFRS? → Last-In, First-Out (LIFO)
2. What does 'limited liability' mean for shareholders of a corporation? → Shareholders' losses are limited to the amount they invested in the company
3. The PESTEL framework is used to analyze which type of business environment? → Macro-environmental external factors
4. What does 'tone at the top' refer to in corporate governance? → The ethical climate and culture set by senior management and the board
5. Which financial statement reports a company's assets, liabilities, and equity at a specific point in time? → Balance Sheet
6. A bond is trading at a discount. What does this indicate about the bond's coupon rate relative to current market interest rates? → The coupon rate is lower than current market rates
7. Which of the following best defines 'credit risk' for a business? → The risk that a counterparty will fail to meet its financial obligations
8. Normal loss in a process account is valued at: → Net realizable value (scrap value)
9. Which performance measurement framework uses a 'results and determinants' matrix, distinguishing between lagging and leading performance indicators? → Results and determinants framework (Fitzgerald and Moon)
10. What is 'working capital management' primarily concerned with? → Managing the day-to-day liquidity of current assets and current liabilities
11. What is 'residual risk'? → The risk that remains after controls and mitigation measures have been applied
12. In a job costing system, overhead is typically applied using: → A predetermined overhead absorption rate
13. Under US tax law, what is the 'matching principle' in the context of corporate taxation? → Income and related expenses should be recognized in the same period
14. What is 'financial leverage' in the context of corporate finance? → The use of debt financing to amplify returns on equity
15. Which term describes the level of risk an organization is willing to accept in pursuit of its objectives? → Risk appetite
16. The double-entry for recording a bad debt written off is: → Debit Bad Debt Expense, Credit Accounts Receivable
17. In the context of corporate governance, what does the term 'agency problem' refer to? → Conflict of interest between principals (shareholders) and agents (managers)
18. Under the perpetual inventory system, the cost of goods sold is recorded: → Each time a sale is made
19. In contract law, which element is described as 'something of value exchanged between parties to a contract'? → Consideration
20. Under IAS 36, an impairment loss is recognized when an asset's carrying amount exceeds its: → Recoverable amount
21. Which of the following best describes the purpose of an 'internal control system' in an organization? → To provide reasonable assurance that objectives are achieved and risks are managed
22. If opening inventory is $20,000, purchases are $80,000, and closing inventory is $15,000, what is the cost of goods sold? → $85,000
23. Which costing method is most appropriate for pricing decisions in the short run, where fixed costs are already committed? → Marginal costing
24. A flexible budget is a budget that is __________. → changed in response to changes in the level of activity
25. Ansoff's Matrix suggests that 'market development' involves which of the following strategies? → Selling existing products to new markets
26. A company uses activity-based costing (ABC). Which cost driver would most appropriately be used for the 'machine setup' activity pool? → Number of production runs
27. Which strategic option involves an organization withdrawing from a particular market or business area? → Retrenchment
28. Earnings per share (EPS) is calculated by dividing: → Net income by weighted average shares outstanding
29. Which risk management technique involves creating a reserve fund to cover potential future losses? → Self-insurance (risk retention fund)
30. In CIMA's strategic planning process, which analysis tool examines Strengths, Weaknesses, Opportunities, and Threats? → SWOT