الخميس، 23 أبريل 2015

Self Study CMAP1A-Financial Statements


                CMA Self Study 

CMA Part 1
Section A –
 External Financial Reporting Decisions...................................................... 0
             القوائم المالية      Financial Statements  
       الميزانية العمومية  The Balance Sheet 

 قائمة الدخل The Income Statement 

  قائمة التدفقات النقدية The Statement of Cash Flows (SCF) 

قائمة الدخل الشامل  Statement of Comprehensive Income
 قائمة التغيرات في حقوق الملكية Statement of Changes in Stockholders’ Equity 

  القيود المفروضه علي القوائم Limitations of Financial Statements in GeneralRecognition, Measurement, Valuation and Disclosure ................................................ 00
 حسابات العملاء Accounts Receivable
 المخزون Inventory
 الاستثمارت Investments
الالات والمعدات Property, Plant and Equipment
Intangible and Other Assets
Valuation of Liabilities
Accounting for Income Taxes
Owners’ Equity
Revenue Recognition
Differences Between U.S. GAAP and IFRS


Introduction to CMA Part 1
The Part 1 Exam has five sections included in the Learning Outcome Statements. The five sections and their
approximate weights on the exam are:
1) External Financial Reporting Decisions: 15%
2) Planningالتخطيط, Budgeting الموازنةand Forecasting: 30%التنبؤ
3) Performance Management: 20% تقييم الاداء 
4) Cost Management: 20% ادارة التكاليف 
5) Internal Controls: 15% الرقابه الداخلية 

Section A, External Financial Reporting Decisions, represents 15% of the exam. The information provided

through financial accounting and reporting should be useful to individuals who are using the information to

make decisions about the future direction of the business. Although knowledge of external financial reporting

is assumed, Section A covers external financial reporting from the perspective of its use in decision-making.
The differences between U.S. GAAP and IFRS are an important part of Section A.

Section B,
Planning, Budgeting and Forecasting, represents 30% of the exam and is the largest part of the
exam in terms of weight. Planning, budgeting, and forecasting are very important skills for the CMA, and this
section should be one of the areas you focus on in your preparation.

Section C,
Performance Management, is 20% of the exam. Section C covers variance analysis and
responsibility accounting as well as financial performance measures. For variances, you need to be able to
both calculate the variances and interpret the information that you get through variance analysis. In addition
to memorizing the variance formulas, you will need to be able to understand and interpret the results of each
variance calculation.

Section D,
Cost Management, is also 20% of the exam. Section D focuses on costing systems and covers a
number of methods of allocating costs and overheads. It also covers supply chain management and business
process improvement.

Section E,
Internal Controls, represents 15% of the exam. The fact that it represents “only” 15% of the exam
does not mean you can ignore it. The technicalities of internal controls are important to know, especially the
relevant laws that businesses are subject to and the related guidance that has been published. The SarbanesOxley Act has had effects that are far reaching, and you should be familiar with its requirements.


 External Financial Reporting Decisions

Financial accounting is the process of reporting the results and effects of the financial transactions that a
business undertakes. The objective of financial reporting is to provide financial information about the entity
that is useful for decision-making. Those using the financial information to make decisions include present and potential equity investors, lenders, and other creditors who need to make decisions about providing resources to the entity. The decisions relate to buying, selling, or holding debt or equity instruments and providing credit.
In order to make these decisions, investors, lenders and other creditors need information that will help
them assess the amount of, timing of, and prospects for future net cash inflows to the entity. 1
Other users who may or may not be providing capital to the firm, such as management, employees, financial
analysts and regulators find the financial statements useful, as well.
The types of decisions that these individuals are making are numerous and varied. It is not possible for
accounting information to provide all of the necessary information that users need to make their decisions.
Users need to access information from other sources, as well, such as economic forecasts, the political
climate, and industry outlooks. 2 However, the financial statements do attempt to provide as much useful
information as possible to the users.

Financial Statements* Users of Financial Information
Published financial information must be in compliance with the established accounting guidelines because
outside users will rely on it to make a variety of decisions. These rules and standards are in place to protect
outside users by ensuring that the information is accurate and useful and can be understood by everyone.
Because so many people are using the financial information and they are using it for so many diverse
purposes, the reasons that people need the financial information are also diverse, such as to:
Make investment decisions.
Extend credit or not.
Assess areas of strength and weakness within the company.
Evaluate performance of management.
Determine whether or not the company is in compliance with regulatory requirements.
Users of financial information can be classified by various distinctions:
Direct vs. Indirect Users – Direct users are those who are directly affected by the results of a company.
Direct users include investors and potential investors, employees, management, suppliers and creditors.
Direct users are individuals who stand to lose money financially if the company has financial problems.
Indirect users are those people or groups who represent direct users. They include financial analysts and
advisors, stock markets and regulatory bodies.
Internal vs. External – Internal users make decisions within the firm whereas external users make decisions
from outside of the firm about whether or not to begin a relationship with the firm, continue a relationship
with the firm, or change their relationship to the firm

Note: Users of financial statements are assumed to have a reasonable knowledge of business and
economic activities and to be willing to study the information with reasonable diligence. This is an
important assumption because it means in the preparation of financial statements, a reasonable level of
competence on the part of users can be assumed. Someone who has a reasonable understanding of
business, accounting and economic activities should be able to read the financial information that is
presented and understand it.
The Financial Statements
The five financial statements used under U.S. GAAP are:
Balance Sheet (also called the Statement of Financial Position.
Income Statement.
Statement of Cash Flows.
Statement of Comprehensive Income.
Statement of Changes in Stockholders’ Equity.
Note: The notes to the financial statements are also considered an integral part of the financial statements
but are not an actual financial statement. The purpose of the notes is to provide informative disclosures
that are required by GAAP.
Note: A company can also prepare prospective financial statements. Prospective financial statements
are financial statements that are based on a set of assumptions and cover a future period. Whenever
prospective financial statements are prepared, the significant accounting policies and significant
assumptions that were made need to be disclosed. Prospective financial statements can also be called
pro forma financial statements.

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