APM PMQ ACTUAL TEST PAPER 2026
QUESTIONS WITH SOLUTIONS GRADED A+
⩥ commitment vs accrual vs actual. Answer: -commitment: placement
of an order for work, money removed from budget to represent order
-accrual: work done for which payment is due but not yet made
-actuals: monies already paid
⩥ why does the PM need to be aware of commitments and accruals.
Answer: -need to monitor commitments against accrual and actual for
reporting purposes
-commitments and accruals reduce available money
-consider cost liabilities such as sunk cost, payment if order is canceled
-accounting method may affect way we do financial reporting
⩥ what is contingency (risk budget vs mgt reserve). Answer: the cost
associated with risk mitigation
-risk budget: allowance for known risk (controlled by PM)
-mgt reserve: allowance for unknown risks (sponsor)
⩥ Differentiate between cost planning for iterative life cycles vs linear
life cycles. Answer: -Linear: scope and quality fixed. Fixed (equipment)
and recurring costs. Funds usually released at decision gates when costs
,are understood and revised forecasts for upcoming phases are available.
Costs approved in line with the business case
-Iterative: cost and time are fixed. Costs are fixed costs and non-
recurring costs (associated with each unit of work). Funding released
more frequently, more interaction with the sponsor
⩥ Explain the role of contingency planning in projects. Answer: Enables
having funds to deal with any residual risk (can include risk budget and
mgt reserve).
⩥ what is the purpose of a cost commitment profile. Answer: -compares
cumulative cost with cumulative revenue
-used to ensure sufficient funds to cover shortfall or may run risk of
cashflow problems or failure
⩥ Forecast Outturn Cost. Answer: = Actual Costs + Commitments +
accruals + work not yet started
⩥ Key steps in risk management. Answer: 1. Initiate: define project and
focus risk mgt process, risk register, establish interfaces,
2. identify risks
3. assess risks: assign owners, probability, impact on T, Q, S
4. plan responses (cost of action vs inaction, effect on TCQ, residual
risks, secondary risks)
5.implement responses (Plan, resource)
, 6.monitor and control (is it working, updates from risk owner,
stakeholder updates)
⩥ explain why a PM would use EVM. Answer: it is a control process
based on a structured approach to planning, cost collection and
performance mgt. it is useful in larger projects where it takes time to
establish resource curve and baseline plans.
⩥ what is earned value and what are benefits of using earned value data.
Answer: useful work that has been completed. assumes current trends
will continue
-tells us how well we are doing
-tells us how well we will do assuming present factors continue
-how well could we do?
-identify areas of underachievement
-provides data for future estimates for similar work
-helps with target setting for future projects
⩥ explain the earned value management process. Answer: considers
planned costs (what I planned to spend: time/money), actual costs (what
I actually paid). Earned Value is what I achieved
⩥ How is Earned Value (EV) calculated?. Answer: %completed *
activity budget (for cost, time)
QUESTIONS WITH SOLUTIONS GRADED A+
⩥ commitment vs accrual vs actual. Answer: -commitment: placement
of an order for work, money removed from budget to represent order
-accrual: work done for which payment is due but not yet made
-actuals: monies already paid
⩥ why does the PM need to be aware of commitments and accruals.
Answer: -need to monitor commitments against accrual and actual for
reporting purposes
-commitments and accruals reduce available money
-consider cost liabilities such as sunk cost, payment if order is canceled
-accounting method may affect way we do financial reporting
⩥ what is contingency (risk budget vs mgt reserve). Answer: the cost
associated with risk mitigation
-risk budget: allowance for known risk (controlled by PM)
-mgt reserve: allowance for unknown risks (sponsor)
⩥ Differentiate between cost planning for iterative life cycles vs linear
life cycles. Answer: -Linear: scope and quality fixed. Fixed (equipment)
and recurring costs. Funds usually released at decision gates when costs
,are understood and revised forecasts for upcoming phases are available.
Costs approved in line with the business case
-Iterative: cost and time are fixed. Costs are fixed costs and non-
recurring costs (associated with each unit of work). Funding released
more frequently, more interaction with the sponsor
⩥ Explain the role of contingency planning in projects. Answer: Enables
having funds to deal with any residual risk (can include risk budget and
mgt reserve).
⩥ what is the purpose of a cost commitment profile. Answer: -compares
cumulative cost with cumulative revenue
-used to ensure sufficient funds to cover shortfall or may run risk of
cashflow problems or failure
⩥ Forecast Outturn Cost. Answer: = Actual Costs + Commitments +
accruals + work not yet started
⩥ Key steps in risk management. Answer: 1. Initiate: define project and
focus risk mgt process, risk register, establish interfaces,
2. identify risks
3. assess risks: assign owners, probability, impact on T, Q, S
4. plan responses (cost of action vs inaction, effect on TCQ, residual
risks, secondary risks)
5.implement responses (Plan, resource)
, 6.monitor and control (is it working, updates from risk owner,
stakeholder updates)
⩥ explain why a PM would use EVM. Answer: it is a control process
based on a structured approach to planning, cost collection and
performance mgt. it is useful in larger projects where it takes time to
establish resource curve and baseline plans.
⩥ what is earned value and what are benefits of using earned value data.
Answer: useful work that has been completed. assumes current trends
will continue
-tells us how well we are doing
-tells us how well we will do assuming present factors continue
-how well could we do?
-identify areas of underachievement
-provides data for future estimates for similar work
-helps with target setting for future projects
⩥ explain the earned value management process. Answer: considers
planned costs (what I planned to spend: time/money), actual costs (what
I actually paid). Earned Value is what I achieved
⩥ How is Earned Value (EV) calculated?. Answer: %completed *
activity budget (for cost, time)
