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CMA Foundation Fundamentals of Accounting Flashcards
52 question-and-answer cards covering Fundamentals of Accounting as it is examined in CMA Foundation. 24 of them are printed below, taken from across the deck — no signup, no paywall on the preview.
24 sample cards from the Fundamentals of Accounting deck
Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.
What is the Journal Proper used for?
To record transactions that cannot be entered in any other subsidiary book — e.g., opening/closing entries, adjustment and rectification entries, transfer entries, credit purchase/sale of assets, and other rare transactions.
What is a Bank Reconciliation Statement (BRS)?
A statement prepared periodically to reconcile and explain the difference between the bank balance shown by the cash book and that shown by the bank passbook/statement on a given date.
Why is a BRS prepared (its purpose)?
To identify and explain causes of difference between cash book and passbook balances, detect errors and omissions, locate delays or frauds, and ensure the accuracy of cash book records.
List four common causes of difference between cash book and passbook balances.
Cheques issued but not yet presented; cheques deposited but not yet cleared; bank charges/interest debited by bank; and direct deposits/collections or payments made by the bank not yet recorded in the cash book.
In a BRS starting from a favourable (debit) cash book balance, how are unpresented cheques and uncleared cheques treated?
Cheques issued but not presented are added (bank not yet reduced); cheques deposited but not yet credited are deducted (bank not yet increased).
What is depreciation?
The systematic and rational allocation of the cost (less residual value) of a tangible fixed asset over its estimated useful life, representing the loss in value due to wear and tear, usage, obsolescence or efflux of time.
State the formula for depreciation under the Straight Line Method (SLM).
Depreciation per year = (Cost of asset − Estimated scrap/residual value) ÷ Estimated useful life (years).
How is depreciation calculated under the Written Down Value (WDV) / Diminishing Balance Method?
A fixed percentage rate is applied each year to the reducing book value (opening WDV) of the asset, so the depreciation amount decreases every year.
Compare SLM and WDV methods of depreciation.
SLM charges a fixed equal amount each year on original cost and can reduce book value to zero; WDV charges a fixed % on reducing balance giving higher depreciation in early years that declines over time, never reaching exactly zero.
What journal entry records depreciation when a Provision for Depreciation account is maintained?
Depreciation A/c Dr. To Provision for Depreciation A/c; then Profit & Loss A/c Dr. To Depreciation A/c. The asset account stays at original cost.
Where is depreciation shown in final accounts?
It is charged (debited) to the Profit & Loss Account as an expense; the asset is shown in the Balance Sheet at cost less accumulated depreciation (or net of provision).
What is the Trading Account and what does its balance show?
An account prepared to ascertain Gross Profit or Gross Loss from buying and selling of goods; its balance (excess of net sales + closing stock over opening stock + purchases + direct expenses) is the gross profit/loss.
Give the formula for Gross Profit.
Gross Profit = Net Sales − Cost of Goods Sold, where COGS = Opening Stock + Net Purchases + Direct Expenses − Closing Stock.
What is the Profit & Loss Account and what does it determine?
An account prepared after the Trading Account that records indirect expenses/losses and indirect incomes/gains to determine the Net Profit or Net Loss of the business for the period.
Distinguish between direct and indirect expenses.
Direct expenses are incurred to bring goods to saleable condition (e.g., wages, carriage inward, freight) and appear in the Trading A/c; indirect expenses relate to office, selling and distribution (e.g., salaries, rent, advertising) and appear in the P&L A/c.
What is a Balance Sheet?
A statement (not an account) of the assets, liabilities and capital of a business at a particular date, showing its financial position; total assets equal total liabilities plus capital.
Distinguish between fixed assets and current assets.
Fixed assets are held long-term for use in business (e.g., land, machinery); current assets are held for short term and are convertible into cash within an operating cycle/year (e.g., stock, debtors, cash).
How is the adjustment for outstanding expenses treated in final accounts?
Add it to the related expense in the Trading/P&L Account (debit side) and show it as a current liability in the Balance Sheet.
How is closing stock treated as an adjustment in final accounts?
Credit it in the Trading Account and show it as a current asset in the Balance Sheet (when it appears outside the trial balance).
How are prepaid (unexpired) expenses adjusted in final accounts?
Deduct the prepaid amount from the related expense in the P&L/Trading Account and show it as a current asset in the Balance Sheet.
What is the difference between an error of omission and an error of commission?
Error of omission is the complete or partial failure to record a transaction; error of commission is a wrong recording such as posting to the correct account but wrong amount, wrong totalling, or wrong side.
What is an error of principle?
An error where a transaction is recorded violating accounting principles — e.g., treating capital expenditure as revenue expenditure (or vice versa); it does not affect the trial balance agreement.
What is a suspense account and when is it used in rectification?
A temporary account opened to make the trial balance agree when one-sided errors cannot be immediately located; rectification of such errors is routed through it, and it is closed once all errors are corrected.
What are Receipts and Payments and Income & Expenditure accounts used for?
They are prepared by non-profit organisations: the Receipts and Payments A/c is a summary of all cash/bank transactions (a real account), while the Income and Expenditure A/c is a nominal account showing surplus or deficit on an accrual basis.
What this deck covers
The Fundamentals of Accounting deck follows the CMA Foundation Fundamentals of Accounting syllabus — 8 chapters and 21 topics — so questions land on material that is genuinely examinable rather than trivia around it. That works out to roughly 6.5 cards per chapter.
Answers are written to be recallable, not just readable — averaging about 183 characters, which is long enough to carry the reasoning and short enough to say out loud.
A deck like this earns its keep on the second and third pass. Read the syllabus first so you know the shape of the subject, then use the cards to find the specific facts that have not stuck.
Fundamentals of Accounting flashcards FAQ
How many Fundamentals of Accounting flashcards are in this CMA Foundation deck?
52 cards. This page previews 24 of them, sampled evenly across the deck so you can judge the difficulty before installing anything.
Are these CMA Foundation flashcards free?
Yes. The preview here is free to read with no signup, and the full 52-card deck is free inside the Examius app.
What do the Fundamentals of Accounting cards cover?
They follow the CMA Foundation Fundamentals of Accounting syllabus — 8 chapters and 21 topics — so the questions track what is actually examinable.
How should I use these flashcards?
Read the syllabus first so you know the shape of the subject, then drill the deck. Examius schedules each card with spaced repetition, so cards you keep missing come back sooner and ones you know drift further apart.