Free IMANET FMAA Exam Questions

Become IMANET Certified with updated FMAA exam questions and correct answers

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Total 162 Questions | Updated On: Sep 24, 2026

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Question 1

A company has net sales of $4,000,000, operating income of $1,200,000, and net income of $1,000,000. Average total assets are $9,000,000 and average total equity is $7,000,000. What is the company’s return on equity (ROE) and return on assets (ROA)?

A : ROE is greater than 12%, and ROA is less than 12%.

B : ROE is less than 12%, and ROA is greater than 12%.

C : ROE and ROA are both greater than 12%.

D : ROE and ROA are both less than 12%.

Answer: A

Question 2

Which one of the following is the best reason for using variable costing?

A : Variable costing is acceptable for income tax reporting purposes.

B : All costs are variable in the long term.

C : Fixed factory overhead is more closely related to the capacity to produce than to the production of specific units.

D : Variable costing usually results in higher operating income than if a company uses absorption costing.

Answer: C

Question 3

Life-cycle costing

A : Is sometimes used as a basis for cost planning and product pricing.

B : Includes only manufacturing costs incurred over the life of the product.

C : Includes only manufacturing cost, selling expense, and distribution expense.

D : Emphasizes cost savings opportunities during the manufacturing cycle.

Answer: A

Question 4

Which one of the following is the best reason for using variable costing?

A : Variable costing is acceptable for income tax reporting purposes.

B : All costs are variable in the long term.

C : Fixed factory overhead is more closely related to the capacity to produce than to the production of specific units.

D : Variable costing usually results in higher operating income than if a company uses absorption costing.

Answer: C

Question 5

Dividends paid to company shareholders would be shown on the statement of cash flows as

A : operating cash inflows

B : operating cash outflows

C : cash flows from financing activities

D : cash flows from investing activities

Answer: B

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Total 162 Questions | Updated On: Sep 24, 2026

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