CMA Foundation Paper 2 (FFCA) study guide
CMA Foundation Paper 2 (FFCA) · Work through your exam, one topic at a time.
CMA Foundation Paper 2, Fundamentals of Financial and Cost Accounting (FFCA), is the accounting paper in the entry-level CMA Foundation stage. It is aimed at students who have finished school and are beginning a cost and management accounting career, and at early-career staff who need formal grounding in how transactions are recorded, summarised into statements, and then re-cut for costing and decisions. The CMA Foundation Paper 2 (FFCA) study guide has 7 sections and about 2,150 words.
01Fundamentals of Accounting
Domain 1 examines the conceptual foundation and the bookkeeping cycle: accounting concepts and conventions, the dual aspect, journal and ledger, trial balance, capital versus revenue, depreciation and bank reconciliation. Questions are practical and often test the effect of an entry on profit and on the balance sheet.
293 words, about 1 min02Accounting for Special Transactions
Domain 2 covers transactions whose accounting differs from ordinary sale and purchase: bills of exchange, consignment and joint venture. The exam tests who recognises the asset, liability, revenue and profit, and how unsold or unsettled amounts are valued.
308 words, about 2 min03Preparation of Financial Statements
Domain 3 tests the final accounts of a sole trader, with adjustments, and the distinction between receipts and payments and income and expenditure for not-for-profit organisations. Marks are lost less from format than from the placement of adjustments.
330 words, about 2 min04Cost Accounting Fundamentals
Domain 4 introduces cost accounting as an internal reporting system: cost concepts, classification, cost centres and cost units, and the preparation of a cost sheet. The exam tests whether you can build cost in the correct sequence and separate cost from financial expense.
324 words, about 2 min05Costing Methods and Techniques
Domain 5 matches costing methods to production settings and tests techniques for assigning cost. Methods include job, batch, contract, process, service and output costing; techniques include absorption, marginal, standard and activity-based costing.
302 words, about 2 min06Cost Accounting Systems and Cost Control
Domain 6 examines how cost accounts are organised and how cost is controlled. It covers integrated and non-integrated systems, reconciliation of cost and financial profit, standard costing variances and budgetary control.
291 words, about 1 min07Decision Making and Analysis
Domain 7 applies marginal costing and relevant costing to short-term decisions: break-even, contribution, margin of safety, special orders, make-or-buy, shutdown and limiting factors. The central rule is that fixed costs are irrelevant to a decision unless the decision changes them.
302 words, about 2 min