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F1 (Accountant in Business) MCQs (1)


Q. 1 Which of the following action may be taken by a professional body against a member who is found to have
breached its code of conduct?

(1) Prosecution
(2) Reprimand
(3) Impose a fine
(4) Expulsion from the professional body.
o 3 and 4 only
o 2, 3 and 4 only
o 1 only
o 1, 2, 3 and 4

Q.2 Mohammad is a newly qualified accountant working in a large international company. He is finding great
difficulty in doing his work and supervising the work of live partly qualified accountants. He deals with issues
as they arise but is finding that more and more work is piling up. He works standard hours and is not emitted to
be paid ever time. He has working late on several occasions but he still cannot keep up with the demands made
upon him. He is now under pressure from his internal customers who are all demanding that he responds to
their requests. He has reason to believe that some of his staff are now capable of undertaking the working he
gives them
Which TWO of the following courses of action would you suggest that Mohammad undertakes?
o Work even longer hours
o Plan further ahead
o Delegate more tasks
o Priorities work more effectively

Q.3 Which of the following are financial accounting tasks?

(1) Classifying
(2) Summarizing
(3) Communicating
o 2 and 3 only
o 1 and 3 only
o 1, 2 and 3
o 1 and 2 only

Q.4 Kamachi has just started work in the administration office of ABC Co. She is required to start work at 8 am
and finish at 5pm have one hour for lunch and answer at least 500 customer enquiries (emails) per week. She
enjoys her first week, her colleagues are friendly, the work is quite easy and the staff structures their work to
answer 120 enquiries per day on Monday to Thursday so that on Friday they only have to answer 20 enquiries.

Are the following informal group norms?

Starting work at:

 One hour for lunch Yes No

 Answering 120 enquiries on each of the first four days Yes No
 Answering 500 enquiries per week Yes No

Q.5 Which TWO of the following would you believe if you agree with McGregor’s Theory X?
o Work is as natural to people as rest
F1 (Accountant in Business) MCQs (2)

o People must be directed work to the required standard

o People fell that achievement at work is irrelevant
o Money is only one benefit from work

Q.6 According to Kotter, leadership is primarily about which of the following?

o Change
o Complexity
o Choice
o Challenge

Q.7 Which TWO of the following would you consider when undertaking a PESTEL analysis?
o Legal issues
o System requirements
o Personal preferences
o Technological factors

Q.8 Marvis is a team leader working in the finance directorate of a charitable organization. She manages a team of
five people. There of the live people benefit from good working relationship. Two of the team, however, seem
to be constantly battling with each other. Marvis has decided to bring in the human resources department to
deal with the issue.
Are the phrases below correct interpretations of the situation described?

Conflict avoidance Yes No

Conflict referral Yes No

Q.9 Senior Manager is considering making changes to the working day. They consult some of their staff before
taking a decision. The staffs who are consulted talk to their colleagues. This results in a strike being threatened
because the working day is to be extended

This is an example of which type of communication channel?

o Format
o Vertical
o Horizontal
o Grapevine

Q.10 Which of the following is described by the scalar chain concept?

o Non-routine decisions are taken at the top level of management.

o Decisions are pushed down to the lowest possible level in an organization.
o The number of levels in the organization structure.
o No-one in on organization reports to more than one supervisor

Q.11 Aintab is employed as an accountant in XYZ Co. He has been asked to form an inter-disciplinary team to
design a new financial system.
In determining the composition of the team he should consider which of the following issues?

(1)Technical skills
(2 ) Inter-personal skills
(3) Team role mix

o 1, 2 and 3
o 2 and 3 only
o 1 and 3 only
o 1 only

Q.12 Bob purchase 20% of Company A’s output. Company A is only one of many companies who supply Bob. Bob
always maintains a degree of completion between suppliers
F1 (Accountant in Business) MCQs (3)

As for as Company A is concerned, how should Bob be categorized under Mendelow’s framework?
o Low power, low interest
o Low power, high interest
o High power, high interest
o High, power, low interest

Q.13 Team members via for position and complete as they attempt to establish themselves in relation to other team
members and the leader, who might be challenged by certain individuals. Clarity of purpose increases.

Which stage in the ‘Tuckman team-development model’ is described by this statement?

o Forming
o Norming
o Performing
o Storming

Q.14 For which of the following is horizontal communication used?

o To direct subordinates
o Feedback to management from employees
o Task coordination between departments
o To clarify operational goals.

Q.15 Which TWO of the following statements about the benefits of an equal opportunities policy are correct?

o The organization can be benefited from a wide source of talent.

o The workforce is increased and productivity is improved
o It motivates the workforces to seek development and promotion.
o It reduces the need to interview candidates for employment.

Q.16 Which TWO of the following are features of tall organization?

o Decentralization of authority.
o Few levels of management.
o Narrow span of control
o Tight supervision.

Q.17 Which of the following are ways in which an organization could recognize ethical issues?

(1) Appoint ethical champions

(2) Embrace ethics in its value statements
(3) Include ethical dimensions in human resources management
(4) Include ethical values in its mission statement

o 1 and 3 only
o 1,2, 3 and 4
o 1, 2 and 4 only.
o 2 and 4 only

Q.18 Appraisal systems are often misunderstood and mismanaged.

Are the following statements about managing the appraisal process true or false?

Criticism should be avoided at all costs True False

Only poor performance should be discussed True False

Q.19 Ahsan is a director of HH Co. and has been asked to oversee the development of a new business system. The
objective of the system will be providing reasonable assurance about the reliability of financial reporting.

What type of system is being developed?

o An information system
o An internal audit system
F1 (Accountant in Business) MCQs (4)

o An internal control system

o A financial accounting systems

Q.20 ABC Co. operates in an industry characterized by a high proportion of fixed cost but minimal investment
machinery. There is Brand loyalty, with customers able to switch from one supplier to another at no cost. In
recently years the market has started to decline.

Which of the following will result in a greater threat of new entrants to the Industry?
o The lack of brand loyalty
o The declining market
o The high fixed costs
o The minimal need for investment in machinery.

Q.21 The impact on introducing technology with Company XX is that it can now operate with a smaller work force
than before. Technology has replaced some of the manual jobs.

What is the name of this strategy?

o Downsizing
o Delayering
o Franchising
o Outsourcing

Q.22 Which of following are ADVANTAGES of a business organization?

(1) To enable functional specialization

(2) To increase control by the owner
(3) To allow knowledge sharing
(4) To facilitate expansion
o 1 and 3 only
o 1, 3 and 4 only
o 2 and 4 only
o 1,2,3 and 4

Q.23 Which TWO of the following are prerequisites for fraud in circumstances where duties are not segregated?

o Collaboration
o Collusion
o Dishonesty
o Motivation

Q.24 A government wishes to increase employment via the immediate growth of private sector business.

What is the MOST appropriate policy?

o Increase interest rates

o Reduce public sector borrowing
o Reduce public sector spending
o Reduce income tax

Q. 25 Which of the following describes the ‘country club’ style of management identified by Blake and Mouton’s
managerial grid?
o Follows the traditions of scientific management
o A high degree of concern for production and for people
o Little concern for people and little concern for the task.
o Encourages and supports and overlooks inadequacies

Q.26 David, an internal auditor, has been asked to assess the internal factors that may increase his company’s risk
exposure to fraud.
F1 (Accountant in Business) MCQs (5)

Which TWO of the following are relevant to this assessment?

o Corporate restructuring
o New legislation
o Rapid growth
o Increased competition

Q.27 JKL Co is a restaurant chain.

Are the following statements about JKL Co true or false?

Limiting JKLF Co’s damage to the environment is likely to improve its efficiency True False
Buying locally grown organic products will reduce JKL CO’s impact on the environment True False

Q.28 David, an internal auditor, has been asked to assess the internal factors that may increase his company’s risk
exposure to fraud.

Which TWO of the following are relevant to this assessment?

o Corporate restructuring
o New legislation
o Rapid growth
o Increased competition

Q.29 Which TWO of the following are characteristics of a shaper within Belbin’s team roles?
o Well organized and predictable
o More interested in ideas than achievement
o Challenges other to move forward
o Can be insensitive aggressive and cause conflict.

Q.30 Ben is responsible for conducting internal checks

Preparing which TWO of the following for part of his role?
o Supervision schedules
o Authorization notes
o A pre-list
o Control totals

Q.31 In which part of a PEST analysis will ‘new patents and products’ and ‘changes in lifestyle’ be listed?
o Economic and social
o Social and technological
o Technological and political
o Political and economic

Q.32 Payroll files consists of an individual record for each employee.

Are the following examples of standing data on an Individual’s payroll file?
Yes No
Tax to date True False
Rate of pay True False

Q.33 Jessie is the newly appointed chief executive of a government organization. A television station has recently
run a series of exposes detailing examples where senior members of the government, although complying with
established legal practice, could have been accused of action protecting their own interests
F1 (Accountant in Business) MCQs (6)

Which TWO of the following actions should Jessie recommend the organization takes?
o Employ public relations consultants and ask them to conduct a vigorous campaign questioning the motives of the
television station.
o Develop a code of practice which advocates not just legality of action but also the moral authority of
organizational behavior.
o Establish a committee which scrutinizes the appropriateness of all actions of the organization and its employees.
o Employ public relations consultants and ask them to emphasize that all actions taken have been legal, but do not accuse
the station of bias.

Q.34 Country XYZ is a country operating a balance of payments surplus on goods and services with other countries.
The demand for XYZ products and services in other countries is very price elastic, while demand in ZYX for
products and services from other countries is price inelastic
If the value of the XYZ currently falls against those of its International trading partners, what will be the effect
on ZYX’s International trade situation?
o The value of both exports and imports will fall
o The value of both exports and imports will rise
o The value of imports will fall and the value of exports will rise
o The value of imports will rise and the value of exports will fall

Q.35 The following definitions of internal and external audit true or false?

Internal audit is a function which reports to the management of a company on the True False
financial and operating systems
External auditors report on the year end accounts and verify whether they are
completely accurate

Q.36 The government of Arcadia has the following objectives:

(1) Pursuit of full employment
(2) Providing aid to developing countries
(3) Keeping inflation to a minimum
(4) Ensuring balance of payments equilibrium

Which of the above are macro-economic objectives?

o 1, 2 and 4
o 1, 3 and 4
o 2, 3 and 4
o 1, 2 and 3

Q.37 Which of the following is a function of a good trade payable system?

o Accurate record of banking
o Early receipt of sums due
o Effective control of purchase invoices
o Appropriate discounts to credit customers

Q.38 Are the following key tasks of operational supervisors?

Formulating Yes No
Motivating employees Yes No
F1 (Accountant in Business) MCQs (7)

Q.39 A Co and B Co are competitors in the oil industry who, between them, have a 90% market share. The chief
executives of the two companies meet at a conference and have a private meeting at which they make several
Which of the following agreements would represent unethical business practice?
o An agreement to set prices at a particular level
o An agreement to transport oil across a shared pipeline
o An agreement to develop joint technology for future use
o An agreement to commence research into environmental issues

Q.40 Which TWO of the following describe the MOST usual impact of the informal organization on the business
and the people working within it?
o Informal networks discourage horizontal communication
o Informal leaders may undermine managerial authority
o Informal communication networks tend to be slower than formal channels
o Informal information can be inaccurate and negative, causing stress

Q.41 The following statements are made by the manager in the appraisal interview
Which purpose of the appraisal process does each statement demonstrate?

Performanc Reward Potential

I think you should attend a training course on motivational techniques
We need to discuss your unpopularity with several of our suppliers

Q.42 Richards is an accounts payable clerk. He has received an invoice from a supplier for $ 30,000.
What does the transaction require for input into the computer?
o Bank statement
o Credit note
o Supplier code
o Payment

Q.43 Which TWO of the following would be included in a Corporate Social Responsibility Report?
o Shareholder’s equity
o Protecting the environment
o Sustainable development
o External auditors’ assurances

Q.44 Which TWO of the following are performed by the procurement department in a business?
o Producing purchase orders
o Authorizing customers’ credit limits
o Producing sales orders
o Obtaining price quotations

Q.45 Jim works for the internal audit department of KL Co. Recently he was asked to examine the polices of the
purchasing department, and to report to management whether the polices were adequate and were working
What type of audit has Jim been asked to perform?
o Operational audit
F1 (Accountant in Business) MCQs (8)

o Transactions audit
o Value for money audit
o Systems audit

Q.46 Which TWO of the following are examples of content theories of motivation?
o Maslow’s hierarchy of needs
o Herzberg’s two factor theory
o Adam’s equity theory
o Vroom’s expectancy theory

Q.47 Which TWO of the following BEST describes the concept of acting in the public interest?
o Recognizing that there are a variety of groups affected by organizational action.
o Ensuring that government is adequately informed about the impact of organizational activity.
o Ensuring that behaviour is beneficial to most if not all stakeholders
o Ensuring that all organizational activity receives due public attention and scrutiny.

Q.48 Which of the following statements are correct?

(1) Informal structures are different to formal structures
(2) Informal structures find new ways of doing things
(3) Informal structures are based upon rank and ability
(4) Informal structures are more rigid than formal structures
o 3 and 4
o 1 and 2
o 1 and 3
o 2 and 4

Q.49 Hadronix Co designs and makes security equipment. Eric is the head of the research and development
department. Dev is a consultant working for a company that advises Hadronix Co on advanced technology for
detecting hazardous gases. Kendo is an account manager for an advertising agency which promotes Hardronix
CO products. Asri leads a group who has become shareholders in Hadronix Co I order to influence the
company’s ethical policy.

Which of the following people have / has an external stakeholder role in Hadronix Co?
o Dev and Kendo
o Asri
o Kendo only
o Eric and Dev

Q.50 An organization has many layers, a narrow span of control and there is a presumption of logic and rationality.
The organization is very large and operates in a stable competitive and regulatory environment. People and
processes within the organization operate strictly by well established rules and procedures.

Which cultural type of organization is being described in the above statement?

o Person culture
o Task culture
o Power culture
o Role culture

Q.51 Organizations contain many different departments, each with their roles designed to support the activities of
the business.
The research and development department at a large toy manufacturer is primarily concerned with which TWO
of the following activities?
o Designing new products
o Promoting products
F1 (Accountant in Business) MCQs (9)

o Improving existing products

o Banding products

Q.52 For which TWO types of business or organization are social or demographic changes especially significant?
o Home building companies
o Manufacturers of power plant equipment
o Shipping companies
o Hospitals

Q.53 Which of the following is the first stage in drafting a personal development plan?
o Set out possible goals
o Analyze the current position
o Draw up an action plan
o Carry out a skill audit

Q.54 many employees complain that they never have sufficient time to carry out all the tasks they are required to do.
Which of the following is the MAIN purpose of personal time management?
o To ensure deadlines are met
o To reduce workloads
o To reduce expenditure
o To work more flexibly

Q.55 There are many different types of organization, each with their own goals and objectives. Within a large
accountancy firm may exist either a trade union or a staff association.

What TWO organization types would BEST describe a trade union or a staff association?

o Mutual
o Co-operative
o For profit
o Not for profit

Q.56 Which of the following characterizes the preferred leaning style of the ‘reflector’ as suggested by Honey and
o To read and remember fully
o To tackle practical issues mebculosly
o To act quickly and incisively
o To observe and consider closely

Q.57 Study of which one of the following trends accurately describes ‘demography’?
o Population
o Economic
o Globalization
o Employment

Q.58 Ed, the external auditor appointed to review SFGD Co’s financial statements, has detected a misstatement in
the year end accounts.

Ed is required to do which TWO of the following?

o Detect the extent of fraud and error in the organization

o Document his findings and report them to management
o Express an opinion on the true and fair view of the financial statements
o Ensure that the company’s assets are safeguarded

Q.59 Debbie has been made redundant from her job as a machinist in a factory. There are many vacancies in local
companies. Which type of unemployment is Debbie being affected by?

o Marginal unemployment
F1 (Accountant in Business) MCQs (10)

o Structural unemployment
o Frictional unemployment
o Cyclical unemployment

Q.60 Which of the following is an example of the core work carried out by the financial accountant in a large
organization which also employs a management accountant?

o Preparing corporate reports

o Budgeting
o Investment appraisal
o Breakeven analysis

Q.61 Which of the following statement about a Committee is correct?

o Committees exist between meeting so they can react quickly to changes

o Decision-making is a faster when people are working in a committee
o Each committee member is personally responsible for all decisions agreed
o A committee can do more work than individuals working in isolation

Q.62 The ACCA students are chatting before class and discussing their motivation. Nick say I really don’t
understand this paper. Even if I work really hard I think I’ll fail. Shona says ‘I think I’ll pass, but I don’t
expect I’ll get promoted at work as my manger’s son works there too and will probably be preferred.
According to Vroom’s Expectancy theory, are the following statements true or false?

Nicks comments relate to ‘expectancy’ True False

Shona’s comments relate to valence True False

Q.63 It becomes apparent to the chief executive of an organization that two departments are in constant
disagreement. They cite personal conflict and differing values as the reasons for this. The chief executive
examines the situation and recognizes the need for co-operation between the two departments.

Which TWO of the following actions would the chief executive be advised to take?

o Develop a code of organizational values

o Minimize the interaction between the two departmental heads
o Improve inter-disciplinary communication
o Dismiss one or both of the two departmental heads

Q.64 Are the following statements about a flat organizational structure true or false?

True False
The supervisor tend to have a more personal relationship with
employees F
The structure is more adaptable to a participative form of management T

Q.65 A cost accountant is responsible for which of the following?

o Sourcing finance
o Credit control
o Variance analysis
o Registering non-current assets

Q.66 Which TWO of the following items could appear in a company’s statement of financial position?
o Finance costs
o Goodwill
o Income tax paid
o Current liabilities
F1 (Accountant in Business) MCQs (11)

Q.67 Javier has recently been appointed as a team leader at Def Engineering Co. He has changed the layout of his
section so that rather than facing forward, his team face each other around a round table.
Are the following statements true or false?

The new arrangement will help to satisfy the group’s social needs True False
The new arrangement will increase output True False

Q68 The world economy is suffering from rapidly increasing oil prices and global warming is a major concern to a
growing group of consumers. This situation is forcing car manufacturers to investigative ways in which they
can produce more fuel efficient vehicles.
Based on the above statement, which TWO PEST factors are pressuring the car manufacturers to produce fuel
efficient cars?
o Economic
o Legal
o Social
o Political
Q. 69 Communication flows in a variety of directions throughout an organization.
Which of the following is an example of diagonal communication?

o Sales manger to sales person

o Finance manager to sales team
o Marketing director to chairman
o Production manger to production director.

Q. 70 Which of the following circumstances, if they occurred, would represent potential ethical issues for Mark to
deal with.
1. Fraudulent behavior
2. Widespread bullying
3. Discriminatory behavior

• 2 only
• 2 and 3
• 1 and 2 only
• 1 and 3 only
Q. 71 The finance director Sladox Co. recently scrutinized the draft annual financial statements to check that they
were capable of independent verification.
With which of the following qualities of accounting information was the finance director concerned?
• Relevance
• Reliability
• Comprehensiveness
• Comparability
Q. 72 Harry is the purchasing of GHI Co. a biscuit manufacturing company. The company is about to use a new
supplier of four.
1. Setting up a payables account
2. Arranging payment terms
3. Placing orders
4. Negotiating delivery days
F1 (Accountant in Business) MCQs (12)

• 1, 2, 3 and 4
• 2 and 3 only
• 1 and 2 only
• 3 and 4 only
Q. 73 ‘Getting things done through other people ‘ BEST defines which of the following?
• Leadership
• Mentoring
• Delegation
• Supervision
Q. 74 At which state of Tuchman’s model of team development will the team be able to accept delegated tasks and
projects from the leader?
• Forming
• Norming
• Performing
• Storming
Q. 75 Which is the following BEST defines a corporate code of ethics?
• Detailed procedures laid down by a company for its staff
• Policy statements of a company to define moral standards for its employees
• Behavioral principles laid down by a professional body
• Moral standards that apply to all companies
Q. 76 From the following list which statement BEST describes the concept of equal opportunities?
• All employees should have access to potential promotion
• The number of men and women in promoted positions
• There should be a quota of women in promoted positions
• There should be an equal number of people of different race.
Winston is a calm, self-controlled objective person.

Q. 77 As a team member, which of these qualities would BEST reflect the team roles identified by Belbibn?
• Chairman
• Team worker
• Shaper
• Resource investigator
Q. 78 Dormestyx Co. manufactures domestic equipment such as cookers, refrigerators and washing machines. The
company has recently undertaken a project to update its use of information technology in its sales, production
and product development processes.
Which TWO of the following are benefits that a company, such as Dormestyx Co. would expect to gain from
such a project?
• E-business applications should increase direct sales to the public
• More highly automated production lines should lower unit costs
• Greater computerization should minimize the need for product innovation
F1 (Accountant in Business) MCQs (13)

• More accurate sales forecasts should increase working capital.

Q. 79 Blake and Mouton identified two variables which determine the extent to which management combine their
concern for the task and their concern for people.
What name did Blake and Mouton give to the leadership style with little focus on task but a high concern for
• Produce or perish
• Team
• Impoverished
• Country club
Q. 80 The following statements are made by the manger in the appraisal interview.
Which purpose of the appraisal process does each statement demonstrate? Performance Potential
• I think you should attend a training course on motivational techniques (Potential)
• We need to discuss your unpopularity with several of our suppliers. (Performance)

Q. 81 A new government has promised to reduce taxes to stop high earners from leaving the country. It will aso
increase spending in the public sector to improve the quality of service. Interest rates will rise to encourage
saving, along with the introduction of new tax free savings opportunities.
Which TWO of the following are consistent with an overall objective of increasing the level of economic
• Increase in interest rates
• Tax free savings opportunities
• Reducing taxes
• Increases in public sector spending

Q. 82 It has been discovered that ABC Law Firm has improperly handled a client’s money account.
Which of the following are consequences of this?
• The firm could incur a civil liability
• The firm could lose clients
• The firm’s indemnity insurance will be affected
• The firm’s reputation will suffer.
o 1 and 3 only
o 1, 2, 3 and 4
o 1 and 4 only
o 2, 3 and 4 only
Q. 83 DEF Co. is a petrochemicals company which publishes measures of environmental performance in its annual
Are the following statements about DEF Co. true or false?
DEF Co. can accurately quantify its financial impact on the environment and include it within its financial
statements. (False)
Publishing environmental measures improves DEF Co.’s environmental performance. (True)

Q. 84 Which TWO of the following describe the specific roles of non-executive directors?
• To determine the employment practices of the business
• To determine the pay of executive directors
F1 (Accountant in Business) MCQs (14)

• To serve on the audit committee

• To determine the social and environmental objectives of the business.
Q. 85 Munro, an employee of Leptiyx Co. reports to manger Hoshono, Munro is an officer of the trade union which
represents clerical and administrative staff at Leptiyx Co. Hoshono owns a house that will be demolished if a
shopping development proved by Leptiyx Co. is built. Hoshono has joined a group that is organizing protests
against the shopping development. Both Murno and Hoshono experience conflicts in their objectives.
Which TWO of the following statements account, in the above scenario, for the conflicts experienced by Munro
and Hoshono in terms of their stakeholder’s group memberships?
• Hoshono is a member of both internal and external stakeholder groups
• Munro is a member of both internal and connected stakeholders groups
• Hoshono is member of both internal and connected stakeholder groups
• Munro is a member of both internal and external stakeholders groups
Q. 86 Are the following components of organizations as suggested by Mintzberg?
• Support staff (Yes)
• Production line (No)
Q.87 Arum has just been appointed a marketing manager at ABC Co. a supermarket.
What accounting information will be required by Arum to be successful in his new role?
• Prices charged in the pass and by competitors
• Salaries of checkout staff
• Customer demographics
• Profitability by product
o 1 and 4 only
o 3 only
o 1, 2 3 and 4
o 1, 3 and 4 only
Q. 88 Which TWO of the following are good ‘motivators’ according to Herzberg?
• Advancement
• Recognition by others
• Working conditions
• Extrinsic reward
Q. 89 ABC Co. manufactures ladies clothes. Fabric is purchased from approved suppliers and then clothes are
produced to customers (retailer’s) order.
Which TWO of the following would be application controls in ABC CO’s purchasing system?
• Orders over Rs. 10,000 in value are authorized by an executive
• Passwords are required to log only the computer system
• Sequence checks are made as documents are entered into the system
• Exception reports are produced showing employees working more than 50 hours per week.
Q. 90 Anna is a newly appointed auditors in a manufacturing company. She discovers that the person who orders raw
materials is also responsible for receiving them and authorizing payment for them. Anna considers this a
violation of a fundamental people of financial administration and determines to implement a system whereby
no one person can be responsible for all of these activities.
Which of the following BEST describes what Anna wishes to implement?
• Financial regulations
• Internal check
F1 (Accountant in Business) MCQs (15)

• System control
• Internal control
Q. 91 Which of the following is an observation of Elton Mayo’s human relations approach to management?
• Work satisfaction is based on recognition, security and being part of a team
• Employees are driven by monetary rewards above all else
• Good communication and emotional connection between workers has little effect on productivity
• Management’s role is to persuade subordinates to meet organizational goals.
Q. 92 Are the following statements true or false?
If price falls, supply will increase (all other factors being held constant) (False)
If price falls, demand will increase (all other factors being held constant) (True)
Q. 93 Which of the following is an example of a generic strategy outlined by porter?
• Quality control
• Cost leadership
• Customer focus
• Resource efficiency
Q. 94 Sergei is being disciplined by his employer for using abusive and derogatory language to his colleagues .
Which organizational value has Sergel’s behavior breached?
• Honesty
• Trust
• Openness
• Respect
Q. 95. A co-operative organization has recently created a policy document guiding its employees as to acceptable
behavior and priorities. In this document it is stated that ‘resources should be procure only from sources where
recent wages have been paid to the workers’
Is this policy document reflective of the following codes?
Corporate social responsibility
Q. 96 Danny is the accounts manager in a company trading in legitimate activity, established by a person to receive
funds acquired by the same person from illegal sources.
The person who manages but does not own the legitimate company may be guilty of which TWO categories of
money laundering?
• Concealing or transferring proceeds to avoid prosecution
• Acquisition, possession or use of criminal proceeds
• Assisting another to retain the benefit of crime
• Failure to disclose knowledge or suspicion of money laundering

Q. 97 Do the following reflect the pattern of communication found in a committee? Yes No

Circle Y
Wheel N

Q.98 Julia is a party qualified account who works for a small public service organization. She is a pleasant person
and her immediate superior finds it easy to work with her.
F1 (Accountant in Business) MCQs (16)

Some of Julia’s colleagues, however, are more difficult to deal with and her immediate superior finds it more
difficult allocate work to them. As such he places more and more work demands on Julia.
Julia is now finding it difficult to keep up with the demands made upon her. She finds it difficult to determine
which work needs doing first. She has adopted an approach whereby she does the work in the order in which it
is given to her. At the moment she is overwhelmed with complaints from both her internal customers and her
immediate superior who are all demanding that she responds to their work requests.
Which TWO barriers to effective time management are shown in the behavior of Julia?
• Lack of work prioritization
• Lack of assertiveness
• Inability to delegate
• Poor motivation
Q. 99 Tony is a newly appointed departmental head. He is aware that one of his subordinates applied for his job,
having been acting in that capacity unofficially for a few months. Tony finds that the individual concerned
seems to be hostile and obstructive towards him. He realizes that this conflict is adversely affecting the
organization .
What are the TWO BEST ways for Tony to deal with this situation?
• Consult a senior colleague or his manager
• Find ways to reduce this inter-personal conflict
• Recognize this conflict as inevitable and do nothing about it.
• Discipline the individual
Q. 100 What is the term used to describe an incentive scheme based on output, calculated as a fixed price per item
produced within a standard unit of time?
• Merit rating
• Payment by results
• Profit sharing
• Promotion
Q. 101. XYZ Co. is a computer manufacturer who is concerned that levels of motivation in the workforce are
declining. The work environment is comfortable and secure with a guarantee of future employment. The
company has been advised that to improve motivation the staff need improved social conditions.
According to Maslow’s hierarchy of needs theory, which level of need is XYZ Co. going to satisfy?
• Physiological
• Safety
• Belonging
• Esteem
Q. 102 Which TWO of the following are responsibilities of an audit committee?
• Reviewing arrangements for risk management
• Recommending suitable applicants to fill board vacancies
• Reviewing remuneration policies for executive directors
• Implementing one-off investigations
Q. 103 Characteristics of an organization include the extent of individual initiative, integration between organizational
units and conflict tolerance.
What aspect of an organization is described by these combined characteristics?
• The structure
• The leadership style
• The span of control
F1 (Accountant in Business) MCQs (17)

• The culture
Q. 104 What is the first phase involved in human resource planning?
• Auditing the current personnel
• Planning recruitment policy
• Forecasting future demand for labour
• Controlling the effective use of human resources
Q. 105 Porter suggested that the profit potential of an organization can be analysed by its ability to manage a number
of forces rate to its competitive environment.
Which of the following is part of his analysis?
• Geography
• Politics
• Employees
• Suppliers
Q. 106 JKL Co. manufactures pet food. The company is developing a new ‘cat treat’ product.
In which TWO ways will the production deportment and the accounting function false in respect of this
• Estimate of materials quantities to determine unit cost
• Checking of deliveries from suppliers
• Deciding on production quantity
• Purchasing of raw materials

Q. 107 Bob purchases 20% of Company A’s output. Company A is only one of many companies who supply Bob. Bob
always maintains a degree of competition between suppliers.
As far as Company A is concerned, how should Bob be categorized under Mendelow’s framework?
• Low power, high interest
• High power, low interest
• Low power, low interest
• High power, high interest

Q.108 For which TWO types of business or organization are social or demographic changes especially significant?
• Hospitals
• Shipping companies
• Manufactures of power plant equipment
• Home building companies

Q.109 Are the following statements about money laundering true or false?

True False
The prevention of money laundering is a responsibility of management (True)
The detection of money laundering is the duty of an auditor (False)

Q.110 Peter is curious, but not innovative. He is an enthusiastic team member, who identifies and works external
stakeholders to help the team accomplish its objectives. Peter is a good negotiator and has ability to develop people’s
ideas, but tends to lose interest quickly.

Which of Belbin’s team roles is filled by Peter?

• Monitor-evaluator
• Resource-investigator
• Plant
• Completer-finisher

ABC Co is a multi-national which is building a factory in a developing country. ABC Co wants to operate its
business in an ethical manner.
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Q.111 Which TWO features of the factory in the developing country should be the same as in ABC Co’s factories in
developed countries in order to achieve ethical business practice?
• Safety standards
• Salaries
• Product quality control
• Holiday entitlement

Q.112 Which of the following are benefits to an organization of having a corporate code of ethic?
(1) Helps to encourage desired corporate culture and values
(2) Reassures customers and investors of a company’s moral stance
(3) Provides criteria against which employee behavior can be assessed
(4) Helps employees understand their contractual obligations

• 3 and 4 only
• 1,2,3 and 4
• 1 and 2 only
• 1,2 and 3 only

Q.113 Which of the following courses of action should Seema recommend the organization take to improve morale in
the longer term?
(1) Develop a code of organizational values
(2) Improve inter-disciplinary communication
(3) Develop a corporate mission statement

• 2 and 3 only
• 1 and 3 only
• 1 and 2 only
• 1, 2 and 3

Q.114 Country H is a major importer of goods and services with a demand curve that is price inelastic. Demand for its
exports is unaffected by any exchange rate changes. At the present time it has a balance of payments surplus.

What is the effect on the balance of payments if the value of the currency for Country H strengthens against
those of its trading partners?
• The surplus improves
• There is no change in the balance of payments situation
• A balance of payments equilibrium is achieved
• The surplus deteriorates

Q.115 Why should ACCA member follow the Code of Ethics and Conduct?

(1) Failure to do so could lead to disciplinary action

(2) Failure to do so could lead to prosecution
(3) Failure to do so could damage the reputation of the accounting
(4) Failure to do so could lead to poor quality work

• 1, 3 and 4 only
• 2, 3 and 4 only
• 1 and 2 only
• 1,2,3 and 4

Q.116 Andrea is the internal auditor at Hitec Properties Company. Philip, from JEC and Partners, has been appointed
as the external auditor.

Which TWO of the following would Philip consider when assessing Andrea’s work?
• Limitation of risk
F1 (Accountant in Business) MCQs (19)

• Errors and omissions

• Due professional care
• Technical competence

Q.117 Which of the following is a key dimension in Hofstede model of national cultures?
• Power collectivism
• Power avoidance
• Uncertainly avoidance
• Uncertainty distance

Q.118 Winston is a clam, self-controlled objective person.

As a team member, which of these qualities would BEST reflect the team roles Identified by Belbin?
• Chairman
• Shaper
• Resource investigator
• Team worker

Q.119 Which power basis is being relied on in the following statements?

Referent Reward Legitimate
Because I am your superior legitimate
Because this will be reflected in your annual pay review reward

Q.120 In the short term, those seeking employment are not always in the right place, or may not have the right skills,
to fill the vacancies that are available.

Which of the following types of unemployment does this phenomena describe?

• Frictional unemployment
• Structural unemployment
• Seasonal unemployment
• Cyclical unemployment

Q.121 When looking to recruit new accountants, what is the MOST cost effective medium for a small accountancy
firm to use to ensure that only those with the required skills are targeted by the job advertisement?
• Local newspapers
• Professional journals
• The internet
• National newspapers

Q.122 Are the following used for recording inventory?

Yes No
Transaction processing system (Yes)
Management information system (No)

Q.123 PQR Co is a company selling, installing and servicing air-conditioning units. Service customers are charged an
hourly rate (charge-out rate) for each hour PQR Co staff spends at their premises.

Which TWO of the following should be considered in the determining the charge-out rate?
• Number of hours the job will take
• Manufacturing cost of the air-conditioning units
• Hourly rate charged by competitors
• Wages of the service people

Q.124 When a company suspects it has encountered a case of money laundering, informing which of the following is
NOT appropriate?
• The suspected party
• The regulatory authorities
• Company board of directors
• Shareholders

Q.125 Which management tool will provide a blueprint for staff development to improve performance in the future?
• A competence framework
• A job description
F1 (Accountant in Business) MCQs (20)

• A person specification
• A person profile

Q.126 Which TWO of the following are thinking problem solving roles in Belbin’s team roles theory?
• Specialist
• Plant
• Completer finisher
• Team worker

Q.127 Which TWO of the following describe the MOST usual impact of the informal organization on the business
and the people working within it?
• Informal information can be inaccurate and negative causing stress
• Informal leaders may undermine managerial authority
• Informal communication networks ten to be slower than formal channels
• Informal networks discourage horizontal communication

Q.128 Are each of the following roles responsible for providing information that can be used for decision making?
Yes No
Financial accountant (No)
Management (Yes)

Q.129 Which TWO of the following do variance reports help in determine?

• Anticipated expenditure
• Overhead recovery rates
• Efficiency of labour
• Efficiency of materials usage

Q.130 William and Emma are directors of TM Co. William is motivated primarily by his own self-interest, and is only
concerned about organizational performance if this further his own goals. Emma recognizes the existence of
the organization as a separate legal person, and believes that she owes a duty of care to the owners of the
company and also to a range of other groups are individuals with a an interest in the organization.

Which corporate governance theory describes the behavior of each director?

Stewardship theory Agency theory Shareholder theory

Q.131 Why may an organization be concerned with demographic changes?

(1) They may impact on demand for its products
(2) They may impact on the structure of the labour market
• 1 and 2
• 2 only
• 1 only
• Neither 1 nor 2

Q.132 Different types of communication media have varying levels of information richness.
Which communication medium has the highest level of information richness?
• Face to face
• Telephone
• Memos
• Email

Q.133 Which of the following accountancy activities may involve ethical decisions?
(1) Preparing a statement of financial position
(2) Auditing a small business
(3) Submitting a client’s tax return

• 2 and 3 only
• 3 only
• 1,2 and 3
F1 (Accountant in Business) MCQs (21)

• 2 only

Q.134 As part of an efficiency drive, Newshire College has decided to move from a functional structure to a matrix
structure. Newshire College believes that this will reduce the duplication of support and technical staff each of
their five academic departments currently employ. Concern has been raised by the Academic Standards Board
that the loss specialized staff will have a negative impact on the operations at the five departments and in turn
reduce the quality graduates that Newshire College present to the employment market each year.

Which TWO of the following are DISADVANTAGES of the proposed matrix structure?
• Too much academic specialism
• Dual command and conflict
• High administration costs
• Dilution of function authority

Q.135 ABC Co is a furniture manufacturer. Timber is purchased form a variety of suppliers and used to produce
furniture to a customer’s order.

Which departments are responsible for the following tasks?

Accounting department Purchasing department
Authorizing payments to suppliers (Accounting)
Processing payments to suppliers (Accounting)

Q.136 Which other departments would need to be consulted about this decision?
(1) Purchasing
(2) Production
(3) Sales

• 1 and 3 only
• 1 and 2 only
• 2 and 3 only
• 1,2 and 3

Q.137 Which TWO of the following are examples of government policies designed to deal with an increasingly ageing
• Raising the retirement age
• Subsidized nursing care
• Increasing the number of university places
• A reduction in personal taxation

Q.138 Which TWO of the following factors are considered to be DISADVANTAGES of communicating using a
formal report?
• One way form of information
• Can only be distributed internally
• May require considerable time to read
• Timing may be inconvenient

Q.139 Do the following involve disguise the source of illegally obtained funds?
Yes No
Money laundering (Yes)
Teeming and lading (No)

Q.140 Which TWO production –related functions should be performed by the accounting department?
• Making decisions as to which products to make
• Calculating production cost variance
• Estimating production quantities
• Preparing a purchases and wages budget

Q.141 Which of the following are examples of best practice in effective corporate governance?
(1) Non-executive directors should be financially independent of the company
(2) The posts of chairman and chief executive should be separated
F1 (Accountant in Business) MCQs (22)

(3) Executive directors should have annual pay awards

(4) The post of chief executive should be rotated aro8nd the executive directors on a regular

• 2 and 4
• 2 and 3
• 1 and 2
• 3 and 4

Q.142 Geeta is a senior manage in a firm of accountants. A newly appointed clerical officer has just received a small
sum of money from a client which is subsequently due to be paid to a third party. She seeks advice from Geeta
as to how to deal with this money. Geeta discovers that there is no established policy on the handling of clients’

Which of the following responses is MOST suitable in creating a policy on the handling of client money?
• Putting the money into the general income account and subsequently paying the money from this account to third parties
• Ensuring that junior members of staff seek the approval of senior managers as to the appropriate action in every
individual case
• Ensuring that sums over a certain amount are placed immediately into a client account
• Ensuring that all monies, irrespective of amount, are separately accounted for in dedicated client accounts

Q.143 Which TWO of the following are characteristics of shaper within Belbin’s team roles?
• Challenges others to move forward
• More interested in ideas than achievement
• Can be insensitive, aggressive and cause conflict
• Well organized and predictable

Q.144 Within organizations regular meetings are held when a quorum of members are in attendance.

Which of the following is meant by the term ‘quorum’?

• An agreed minimum number of members is present

• All members are present
• The chair an office bearers are present
• At least 90% of the members are present

Q.145 Which TWO of the following principles of classical management theory are challenged by adopting a matrix

• Subordination of individual interests

• Unity of direction
• Unity of command
• Decentralization of decision making

Q.146 Which of the variables in Vroom’s theory of motivation is described as ‘the strength of the individual’s
preference for an outcome?

• Force
• Expectancy
• Instrumentality
• Valence

Q.147 Which TWO of the following types of work are groups particularly well at?

• Ideas generation
• Analytical
• Work organization
• Experimental
F1 (Accountant in Business) MCQs (23)

Q. 148 Stanislay carefully reviewed sales data for the year to evaluate the performance of the sales staff. Using
objective criteria he decided who should be recommended for promotion and what feedback should be given to
each employee. He then called in the staff for their appraisals to inform them of his decisions.
What is the MAIN barrier to effective appraisal in the above scenario?
• Appraisal as bureaucracy
• Appraisal as judgment
• Appraisal as an annual event
• Appraisal as confrontation