F2 (MA/FMA) – Chapter 16 – PART F – CBE MCQs – ACCA

These are ACCA F2 (MA/FMA) Management Accounting MCQs for Part-F of the Syllabus “Performance measurement”.

These MCQs are designed in a way that students could better understand the exam format and get used to practice online. This approach will reduce exam stress and enable students to prepare better.

We request the students, Not to solve the MCQs until they have learned and finished the entire F2 (MA/FMA) Management Accounting Chapter 16 – Financial performance measurement and Syllabus Area Part-F “Performance measurement”.

All the questions are compulsory, so do not skip any.


Course: ACCA – Associations of Chartered Certified Accountants
Fundamental Level: Knowledge, FIA – Foundation in Accounting
Subject: Management Accounting
Paper: F2 – MA/FMA
Chapter: Financial performance measurement
Chapter Number: 16 of the Practice and Exam Kit
Syllabus Area: C – Performance measurement
Questions Type: CBE MCQs
Exam Section Type: Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part F of the Syllabus; Performance measurement of ACCA F2 (MA/FMA) Management Accounting Module.


These multiple-choice questions (MCQs) are not timed, allowing students to solve them without feeling any pressure and to pay proper attention to the questions.


Students can see their result at the end of the Quiz. They can also be able to see the number of correct and wrong questions. Moreover, the explanation of wrong questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

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F2 - Chapter 16 - Part A - MCQs

Course: ACCA - FIA
F2 (MA/FMA) Management Accounting
Chapter: 16 - Financial performance measurement
Syllabus Area: F - Performance measurement
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit


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1 / 19

Division A of Aigburth Co is considering a project which will increase annual net profit after tax by $30,000 but will require average inventory levels to increase by $200,000. The current target rate of return on investments is 13% and the imputed interest cost of capital is 12%.

Based on the ROI and/or RI criteria would the project be accepted?

2 / 19

Which of the following performance indicators is a financial performance measure?

3 / 19

A means of raising the production efficiency of an operating unit by the reorganisation of work is known as which of the following?

4 / 19

The following summarised statement of financial position is available for L Co.

$'000 $'000
Non-current assets 31,250
Current assets
   Inventory 35,000
   Receivables 40,000
   Cash   1,250
   Capital and reserves 47,500
   Current liabilities (payables only) 60,000

What is the value of the acid test ratio?

5 / 19

The following information is available for company X.

20X7   20X8  
$ $
Profit 7,500 9,000
Sales 500,000 450,000
Capital employed 37,500 60,000

Calculate the change in ROI from 20X7 to 20X8?

6 / 19

A company borrows $10,000 repayable in five years’ time and immediately uses the loan to repay its overdraft.

What will be the effect on the company’s capital gearing and current ratios?

7 / 19

A retailer has two divisions, North and South. Both sell similar products and all prices are set centrally. All shop premises are rented. Shop rental costs in the South division are lower than in the North division due to a government subsidy given to landlords.

Which of the following measures would NOT provide a fair comparison of the performance of the management of the two divisions?

8 / 19

Value analysis can achieve which TWO of the following?

9 / 19

The following information has been extracted from the statement of financial position of X Company.

Capital and reserves 585,000
Long term liabilities (long-term loan) 670,000
Current liabilities (payables only) 84,000

What is the capital gearing ratio, expressed as a percentage to one decimal place?

* (Use the formula (D/D+E))

10 / 19

What is the main focus of the current ratio?

11 / 19

A company has current assets of $1.8m, including inventory of $0.5m, and current liabilities of $1.0m.

What would be the effect on the value of the current and acid test ratios if the company bought more raw material inventory on three months' credit?

12 / 19

Which of the following statements are valid criticisms of return on investment (ROI) as a performance measure?

  1. It is misleading if used to compare departments with different levels of risk
  2. It is misleading if used to compare departments with assets of different ages
  3. Its use may discourage investment in new or replacement assets
  4. The figures needed are not easily available

13 / 19

A company's financial results for 20X4 are shown below.

Sales 7,200
Less cost of sales: 2,900
Less expenses:
Wages 1,600
Repairs and maintenance 360
Directors' salaries 150
Directors' bonuses 55
Other costs (including depreciation) 400
Net profit 1,735

What is the net profit percentage for 20X4, to one decimal place?

14 / 19

Value analysis considers four aspects of value.

What are they?

15 / 19

A division currently earns a return on investment (ROI) of 20%. It is considering investing in a project which has a residual income (RI) of $1,000 at an imputed interest charge of 20%.

What is the effect on the division’s ROI if the project is undertaken?

16 / 19

An extract from a company's financial results for 20X6 are shown below.

Sales 5,400
Less cost of sales: 1,950
Less expenses:
Wages 1,700
Repairs and maintenance 240
All other expenses 490
Net profit 1,020

What is the gross profit percentage for 20X6, to one decimal place?

17 / 19

Using the figures in the question above, what is the asset turnover for 20X8, to one decimal place?

______ times

18 / 19

An investment centre earns a return on investment of 18% and a residual income of $300,000. The cost of capital is 15%. A new project offers a return on capital employed of 17%.

If the new project were adopted, what would happen to the investment centre's return on investment and residual income?

19 / 19

What is the main focus of the acid test ratio?

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