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100+ Free ACCA FM Practice Questions

Prepare for the ACCA Applied Skills — Financial Management (FM) exam with instant access — no signup required.

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Key Facts: ACCA FM Exam

3 hours

Computer-Based Exam Duration

ACCA FM Syllabus and Study Guide

50%

Pass Mark

ACCA Qualification Exam Rules

100 marks

Total Marks Across Sections A, B and C

ACCA FM Syllabus and Study Guide

15 OTQs

Section A Two-Mark Questions

ACCA FM Syllabus and Study Guide

2 x 20

Section C Constructed-Response Marks

ACCA FM Syllabus and Study Guide

7 areas

Syllabus Areas A to G

ACCA FM Syllabus and Study Guide

ACCA Financial Management (FM) is a three-hour computer-based exam assessed in three sections: Section A (15 two-mark objective test questions, 30 marks), Section B (three case-study scenarios of five two-mark OTs each, 30 marks) and Section C (two 20-mark constructed-response questions, 40 marks). The pass mark is 50%. Section C draws mainly from working capital management, investment appraisal and business finance, while Sections A and B can cover any of the seven syllabus areas A to G. Candidates are given a formulae sheet and discount and annuity tables. This free guide and 100-question bank prepare candidates across all seven areas.

Sample ACCA FM Practice Questions

Try these sample questions to test your ACCA FM exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1According to ACCA FM, what is generally accepted as the primary financial objective of a profit-seeking company?
A.Maximisation of shareholder wealth
B.Maximisation of accounting profit
C.Maximisation of market share
D.Minimisation of corporate tax paid
Explanation: FM treats maximisation of shareholder wealth as the primary financial objective, usually measured through share price and dividends. Profit maximisation ignores risk, timing and the difference between profit and cash.
2Agency theory in FM is primarily concerned with the conflict of interest between which two parties?
A.Customers and suppliers
B.Shareholders (principals) and managers (agents)
C.Government and taxpayers
D.Auditors and the audit committee
Explanation: Agency problems arise because managers (agents) may pursue their own goals rather than maximising the wealth of shareholders (principals). Agency costs and incentive schemes such as share options are used to align interests.
3Which of the following is a recognised method of encouraging managers to act in shareholders' interests?
A.Removing all corporate governance codes
B.Increasing the dividend payout to 100%
C.Granting share options to managers
D.Replacing equity with short-term debt
Explanation: Performance-related pay and share options link managerial reward to share price performance, encouraging goal congruence with shareholders. Corporate governance codes and listing rules reinforce this.
4In a not-for-profit organisation, the concept of 'value for money' is usually assessed using which three Es?
A.Efficiency, equity and earnings
B.Equity, ethics and economy
C.Earnings, expenditure and equity
D.Economy, efficiency and effectiveness
Explanation: Value for money in the public and not-for-profit sector is conventionally measured by economy (low input cost), efficiency (output per input) and effectiveness (achievement of objectives).
5A company has earnings available to ordinary shareholders of $4.5m and 9m shares in issue. What is its earnings per share (EPS)?
A.$0.50
B.$2.00
C.$0.45
D.$0.40
Explanation: EPS = earnings available to ordinary shareholders / number of ordinary shares = $4.5m / 9m = $0.50. EPS is a common financial objective and accountability measure used in FM.
6Which body in FM's macroeconomic context is primarily responsible for setting monetary policy through interest rates?
A.The stock exchange
B.The central bank
C.The audit regulator
D.The competition authority
Explanation: Monetary policy, including base interest rates and money supply, is typically conducted by the central bank. Fiscal policy (taxation and spending) is the government's responsibility.
7Which of the following is an example of fiscal policy rather than monetary policy?
A.Quantitative easing
B.Raising the central bank base rate
C.Increasing the rate of income tax
D.Open market operations in bonds
Explanation: Fiscal policy involves government taxation and public spending decisions, such as changing income tax rates. Interest rate changes, quantitative easing and open market operations are monetary policy tools.
8Disintermediation in financial markets refers to which of the following?
A.Conversion of debt into equity
B.Banks merging to form larger institutions
C.The central bank raising reserve requirements
D.Borrowers and lenders dealing directly without using a financial intermediary
Explanation: Disintermediation occurs when companies raise finance directly from investors (for example via capital markets) bypassing banks acting as intermediaries. It reduces the role of traditional financial intermediaries.
9The money markets are best described as markets for which of the following?
A.Short-term wholesale debt instruments and liquidity
B.Long-term equity capital
C.Foreign property investment
D.Long-dated government bonds only
Explanation: Money markets deal in short-term (typically under one year) wholesale lending and borrowing instruments such as Treasury bills, certificates of deposit and commercial paper, providing liquidity.
10A company collects receivables in 45 days, holds inventory for 60 days and pays payables in 30 days. What is its cash operating cycle?
A.135 days
B.75 days
C.15 days
D.105 days
Explanation: Cash operating cycle = inventory days + receivables days − payables days = 60 + 45 − 30 = 75 days. This represents the time between paying for inputs and collecting cash from sales.

About the ACCA FM Exam

ACCA FM (formerly F9) is the Financial Management exam at the ACCA Applied Skills level. It develops the knowledge and skills expected of a finance manager in investment, financing and dividend decisions, covering working capital management, investment appraisal, business finance, cost of capital, business valuations and risk management.

Assessment

Question count not published by the exam provider

Time Limit

Three-hour computer-based exam (plus 10 minutes reading time)

Passing Score

50%

Exam Fee

ACCA FM exam entry fee varies by entry window and region; ACCA publishes current fees per session (ACCA (Association of Chartered Certified Accountants))

ACCA FM Exam Content Outline

Theory and Section A/B

A: Financial management function

Nature and purpose of financial management, financial objectives and corporate strategy, shareholder wealth, agency theory, stakeholder conflicts, and not-for-profit objectives.

Theory and Section A/B

B: Financial management environment

The economic environment for business, fiscal and monetary policy, the nature and role of financial markets and institutions, and money markets.

Core Section C area

C: Working capital management

Working capital importance, management of inventory, receivables, payables and cash, the cash operating cycle, EOQ, Baumol, Miller-Orr, and funding strategies.

Core Section C area

D: Investment appraisal

Payback, ARR, NPV and IRR, inflation and taxation in DCF, risk and uncertainty, lease-or-buy, asset replacement and capital rationing.

Core Section C area

E: Business finance

Sources of finance, equity, debt and SME finance, capital structure theories, the cost of capital, CAPM and WACC.

Theory and Section A/B

F: Business valuations

Valuation of businesses and financial assets, asset-based, dividend growth and P/E models, debt valuation, and the efficient market hypothesis.

Theory and Section A/B

G: Risk management

Nature and types of risk, causes of exchange-rate and interest-rate changes, and hedging techniques for foreign currency and interest rate risk.

How to Pass the ACCA FM Exam

What You Need to Know

  • Passing score: 50%
  • Assessment: Question count not published by the exam provider
  • Time limit: Three-hour computer-based exam (plus 10 minutes reading time)
  • Exam fee: ACCA FM exam entry fee varies by entry window and region; ACCA publishes current fees per session

Keys to Passing

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

ACCA FM Study Tips from Top Performers

1Practise the core computational topics (NPV, IRR, WACC, working capital and hedging) until you can complete them quickly and accurately under time pressure.
2Use the provided formulae sheet during practice so you become fluent in locating and applying each formula.
3Prioritise working capital management, investment appraisal and business finance because Section C draws mainly from these areas.
4Do not neglect the discursive areas; clear written explanations of theory (agency, capital structure, EMH) earn easy marks.
5Practise full three-hour mocks to build stamina across Sections A, B and C.
6Show clear workings in Section C so that method marks are awarded even if a final number is wrong.

Frequently Asked Questions

How is the ACCA FM exam structured?

ACCA FM is a three-hour computer-based exam in three sections. Section A has 15 two-mark objective test questions (30 marks), Section B has three case studies of five two-mark OTs each (30 marks), and Section C has two 20-mark constructed-response questions (40 marks), totalling 100 marks.

What is the pass mark for ACCA FM?

The pass mark for ACCA FM, like all ACCA Qualification exams, is 50%. Sections A and B together carry 60 objective marks, and Section C carries 40 marks for longer written and numerical answers.

What topics does the ACCA FM syllabus cover?

FM covers seven areas: the financial management function, the financial management environment, working capital management, investment appraisal, business finance, business valuations, and risk management. Section C questions come mainly from working capital, investment appraisal and business finance.

Is ACCA FM all multiple choice?

No. Sections A and B (60 marks) are objective test questions, but Section C consists of two 20-mark constructed-response questions requiring structured written and numerical answers. This practice bank builds multiple-choice knowledge prep across the same syllabus.

Are formulae provided in the ACCA FM exam?

Yes. ACCA provides candidates with a formulae sheet and tables of discount and annuity factors during the FM exam, so the focus is on applying the formulae correctly rather than memorising them.

Is FM the same as the old ACCA F9?

Yes. Financial Management (FM) is the current name for the exam previously coded F9. It sits within the ACCA Applied Skills level and the FM and F9 references are used interchangeably.