Free CIMA Practice Questions: Get Started Today
Introduction
Practice questions are the single most effective way to prepare for CIMA objective tests. Research across seven meta-analyses and 48,000+ learners confirms that answering practice questions produces dramatically better retention than passive study. Reading textbooks and watching lectures builds knowledge, but answering exam-style questions under realistic conditions is what transforms that knowledge into exam readiness.
This post provides free sample questions from across the CIMA qualification, covering Certificate, Operational, and Management levels. Each question includes the answer and an explanation to help you understand the reasoning, not just the correct option.
Certificate Level Questions
BA1 — Fundamentals of Business Economics
Question 1: A government increases its spending on infrastructure projects while keeping taxation unchanged. This is an example of:
- A) Contractionary fiscal policy
- B) Expansionary fiscal policy
- C) Contractionary monetary policy
- D) Expansionary monetary policy
Answer: B — Increasing government spending without raising taxes stimulates demand in the economy. This is expansionary fiscal policy. Monetary policy refers to actions taken by the central bank (such as changing interest rates), not government spending decisions.
Question 2: In a market with high barriers to entry and a single dominant firm, the market structure is best described as:
- A) Perfect competition
- B) Oligopoly
- C) Monopoly
- D) Monopolistic competition
Answer: C — A monopoly is characterised by a single firm dominating the market with high barriers to entry that prevent competitors from entering. An oligopoly has a small number of large firms, while perfect competition and monopolistic competition both feature many firms.
BA2 — Fundamentals of Management Accounting
Question 3: A company produces 10,000 units at a total cost of £80,000. Fixed costs are £30,000. What is the variable cost per unit?
- A) £3.00
- B) £5.00
- C) £8.00
- D) £11.00
Answer: B — Total variable costs = Total costs - Fixed costs = £80,000 - £30,000 = £50,000. Variable cost per unit = £50,000 / 10,000 = £5.00 per unit.
Question 4: Which of the following budgeting approaches starts each budget period from a zero base, requiring all expenditure to be justified?
- A) Incremental budgeting
- B) Rolling budgeting
- C) Zero-based budgeting
- D) Flexible budgeting
Answer: C — Zero-based budgeting (ZBB) requires managers to justify every item of expenditure from scratch for each budget period, rather than simply adjusting the previous period's budget. Incremental budgeting starts with last year's figures and adjusts them.
BA3 — Fundamentals of Financial Accounting
Question 5: The accounting equation is expressed as:
- A) Assets = Liabilities + Revenue
- B) Assets = Liabilities + Equity
- C) Assets = Equity - Liabilities
- D) Assets + Liabilities = Equity
Answer: B — The fundamental accounting equation states that Assets = Liabilities + Equity (also expressed as Assets - Liabilities = Equity). This equation must always balance and forms the basis of double-entry bookkeeping.
BA4 — Fundamentals of Ethics, Corporate Governance and Business Law
Question 6: Which of the following is one of the five fundamental principles of the CIMA Code of Ethics?
- A) Profit maximisation
- B) Professional competence and due care
- C) Shareholder primacy
- D) Tax minimisation
Answer: B — The five fundamental principles are: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. These guide the ethical conduct of all CIMA members and students.
Operational Level Questions
E1 — Managing Finance in a Digital World
Question 7: Which of the following best describes the role of a management accountant as a business partner?
- A) Preparing statutory financial statements for external stakeholders
- B) Providing financial insight to support strategic decision-making
- C) Conducting external audits of financial records
- D) Processing daily financial transactions
Answer: B — The business partner role involves management accountants moving beyond traditional number-crunching to actively provide financial analysis and insight that supports strategic and operational decisions. This is a core theme of E1.
P1 — Management Accounting
Question 8: A company sells a product for £25 per unit. Variable costs are £15 per unit and fixed costs are £40,000 per month. How many units must be sold to break even?
- A) 1,600
- B) 2,667
- C) 4,000
- D) 10,000
Answer: C — Contribution per unit = Selling price - Variable cost = £25 - £15 = £10. Break-even point = Fixed costs / Contribution per unit = £40,000 / £10 = 4,000 units.
F1 — Financial Reporting
Question 9: Under IAS 16, the cost of a non-current asset includes:
- A) Only the purchase price
- B) The purchase price plus any directly attributable costs of bringing the asset to its intended use
- C) The purchase price plus all costs incurred in the first year of ownership
- D) The fair value at the date of purchase
Answer: B — IAS 16 requires that the cost of property, plant and equipment includes the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to operate as intended. This includes delivery, installation, and testing costs.
Management Level Questions
E2 — Managing Performance
Question 10: Tuckman's model of group development identifies four stages of team formation. The correct sequence is:
- A) Forming, norming, storming, performing
- B) Storming, forming, norming, performing
- C) Forming, storming, norming, performing
- D) Norming, forming, storming, performing
Answer: C — Tuckman's model progresses through: Forming (team members come together), Storming (conflict and disagreement emerge), Norming (the team establishes ways of working), and Performing (the team works effectively towards its goals). A fifth stage, Adjourning, was added later.
P2 — Advanced Management Accounting
Question 11: Activity-based costing (ABC) differs from traditional absorption costing primarily because:
- A) It ignores overhead costs entirely
- B) It uses multiple cost drivers to allocate overheads more accurately
- C) It only considers variable costs
- D) It allocates all overheads based on direct labour hours
Answer: B — ABC uses multiple cost drivers (such as number of setups, machine hours, or number of orders) to allocate overhead costs to products based on the activities that actually cause those costs. Traditional absorption costing typically uses a single overhead absorption rate based on one measure such as direct labour hours.
F2 — Advanced Financial Reporting
Question 12: When a parent company acquires 80% of a subsidiary, the non-controlling interest at the date of acquisition can be measured using:
- A) Only the fair value method
- B) Only the proportionate share of net assets method
- C) Either the fair value method or the proportionate share of net assets method
- D) The historical cost method
Answer: C — IFRS 3 Business Combinations allows a choice on a transaction-by-transaction basis. The non-controlling interest can be measured at fair value (which includes a share of goodwill) or at the non-controlling interest's proportionate share of the acquiree's identifiable net assets (which excludes goodwill attributable to the NCI).
How to Get the Most from Practice Questions
These sample questions give you a taste of what CIMA objective tests involve, but they represent a tiny fraction of the syllabus. To prepare effectively, you need access to hundreds of questions across every topic.
Here are some tips for making the most of your practice:
Track your scores by topic. Do not just note whether you got a question right or wrong. Record which topic area each question covers and look for patterns in your weaknesses. If you consistently struggle with questions on costing, that tells you exactly where to focus your revision.
Review every incorrect answer thoroughly. When you get a question wrong, take the time to understand why. Was it a knowledge gap, a misreading of the question, or a calculation error? Each type of mistake requires a different corrective action.
Practise under timed conditions. Once you are comfortable with the material, attempt questions within the 90-second-per-question time limit that mirrors the real exam. This builds the pace and decision-making speed you need on exam day.
Do not memorise questions. The real exam will present familiar concepts in unfamiliar ways. Focus on understanding the principles behind each answer so you can apply them to any question, not just the ones you have seen before.
Space your practice over time. Practising a few questions every day is far more effective than doing hundreds in a single sitting. Regular, spaced practice builds long-term retention.
Start Practising Now
The best time to start practising CIMA objective test questions is today. Whether you are studying for your first Certificate exam or preparing for Strategic level, regular practice is the single most effective thing you can do to improve your chances of passing.
Sign up for free access to our CIMA practice question bank and begin building the knowledge and exam skills you need to succeed.