PART 5

QUESTION PRACTICE
ACCA PAPER F1 – ACCOUNTANT IN BUSINESS
 QUESTION PRACTICE
LESSON 1: BUSINESS ORGANISATION AND THEIR STAKEHOLDERS
1. ‘An organisation is a social arrangement which pursues collective......................,
which controls its own performance and which has a boundary separating it from its
from its environment’. Which of the following words best completes this sentence?
A. Profits
B. Stakeholder
C. Goals
D. Tactics
2. An organisation is owned and run by central government agencies. The
organisation is best described as which of the following statements?
A. A voluntary sector organisation
B. A private sector organisation
C. A public sector organisation
3. What is the term given to the idea that the combined output of a number of
individuals working together will exceed that of the same individuals working
separately?
A. Sympathy
B. Specialisation
C. Synergy
D. Systems thinking
4. Which of the following organisations would rely most heavily on value for
money indicators and efficiency rather than information on performance and
profitability?
A. A private accountancy college
B. A local authority
C. A small retailer
5. ADB is a business which is owned by its workers. The workers share the profits
and they each have a vote on how the business is run. Which of the following best
describes ADB?
A. Public sector
B. Private sector
C. Not-for-profit
D. Co-operative.
6. Which one of the following are examples of internal stakeholders?
A. Shareholders
B. Suppliers
C. Employees
D. Financiers
7. Businesses owned by their workers or customers who share the profits are called
 A. Limited companies
B. Co-operatives
C. Private limited companies
D. Partnerships
8. According to Mendelow’s matrix, stakeholders in segment C (low interest, high
power) should be kept informed. Is this true or false?
9. A private sector organisation is one owned or run by:
A. Central government
B. Local government
C. Government agencies
D. None of the above
10. Which of the following defines an organisation?
A. A social arrangement which pursues collective goals, which controls its own
performance and which has a boundary separating it from its environment
B. A social arrangement which exists to make a profit, controls its own
performance and which operates within certain boundaries.

LESSON 2: THE BUSINESS ENVIRONMENT

1. Downsizing can reduce capacity. Is this true or false?
A. True
B. False
2. Which of the following types of dismissal relates to the method of dismissal?
A. Unfair dismissal
B. Wrongful dismissal
C. Forced dismissal
3. Which one of the following is a primary activity in the value chain?
A. Technology department
B. Procurement
C. Human resources management
D. Marketing and sales
4. The purpose of value chain analysis is to understand customer price and quality
preferences. True or False?
5. Information technology has encouraged which three of the following?
A. Flattening of organisation hierarchies
B. Widening spans of control
C. Smaller volumes of routine processing
D. More flexible working arrangements.
6. ABC Co is a large trading company. John is the administration manager and is
also responsible for legal and compliance functions. Sheila is responsible for after-
sales service and has responsibility for ensuring that customers who have purchased
goods from ABC Co are fully satisfied. Sunny deals with suppliers and negotiates
on the price and quality of inventory. He is also responsible for identifying the most
appropriate suppliers of plant and machinery for the factory. Sam is the information
technology manager and is responsible for all information systems within the
company
According to Porter’s value chain, which of the managers is involved in a primary
activity as opposed to a support activity?
A. John
B. Sunny
C. Sheila
D. Sam
7. Environmental analysis is relevant when undertaking the strategy-making
process. Is this true or false?
A. True
B. False
8. Give four types of legal factor affecting a company
9. What are the five competitive forces?
10. How can senior managers promote health and safety awareness?

LESSON 3: MACRO-ECONOMIC ENVIRONMENT

1. A government can increase demand by using fiscal policy. True of False?
A. True
B. False
2. Government policy on taxation, public borrowing and public spending is:
A. Monetary policy
B. Fiscal policy
3. A tax which takes a higher proportion of a poor person’s salary than of a rich
person’s is:
A. Proportional tax
B. Regressive tax
C. Progressive tax
D. Indirect tax
4. Injections into the economy are:
A. Consumption and Investment
B. Investment and Government Expenditure
 C. Investment, Government Expenditure and Export Demand
D. Consumption, Investment, Government Expenditure and Export Demand
5. Other things remaining the same, an increase in the money supply will tend to
reduce:
A. Interest rates
B. Liquidity preference
C. The volume of bank overdrafts
D. Prices and incomes
6. High rates of personal income tax are thought to have a disincentive effect. This
refers to the likelihood that the high rates of tax will:
A. Encourage illegal tax evasion by individuals
B. Lead to a reduction in the supply of labour
C. Lead to a reduction in savings by individuals
D. Discourage company investment
7. Which of the following government aims might be achieved by means of fiscal
policy? 1. A redistribution of income between firms and households. 2. A reduction in
aggregate monetary demand. 3. A change in the pattern of consumer demand.
A. Objectives 1 and 2 only
B. Objectives 1 and 3 only
C. Objectives 2 and 3 only
D. Objective 1, 2 and 3
8. The government of a certain country decides to introduce a poll tax, which will
involve a flat rate levy of $200 on every adult member of the population. This new tax
could be described as:
A. Regressive
B. Progressive
C. Proportional
D. Ad valorem
9. Which of the following will not be the immediate purpose of a tax measure by the
Government?
A. To discourage an activity regarded as socially undesirable
B. To influence interest rates
C. To protect a domestic industry from foreign competition
D. To price certain products so as to take into account their social cost
10. A deflationary gap occurs when:
A. Aggregate demand is insufficient to buy up all the goods and services the
company is capable of producing
B. Aggregate demand is more than sufficient to buy up all the goods and services
produced by an economy
C. A government attempts to spend its way out of recession
 D. A government is cutting its level of expenditure

LESSON 4: MICRO-ECONOMIC FACTORS

1, A demand curve is drawn on all except which of the following assumptions?
A. Income do not change
B. Price of substitutes are fixed
C. Price of the good is constant
D. There are no changes in tastes and preferences
2, A price ceiling set above the equilibrium market price will result in:
A. Market failure
B. Excess supply over demand
C. Market equilibrium
D. Excess supply over supply
3, Which one of the following would normally cause a rightward shift in the
demand curve for a product?
A. A fall in the price of a substitute product
B. A reduction in direct taxation on incomes
C. A reduction in price of the product
D. An increase in the price of a complementary product
4, What is an inferior good?
A. A good of such poor quality that demand for it is very weak
B. A good of lesser quality than a substitute good, so that the price of the
substitute is higher
C. A good for which the cross elasticity of demand with a substitute product is
greater than 1
D. A good for which demand will fall as householder income rises
5, In traditional theory, which of the following best describles a firm’s short run
supply curve:
A. Its marginal cost curve where price is less than average variable costs
B. Its marginal cost curve where price is greater than average variable costs
C. Its average cost curve where price is less than marginal cost
D. Its average cost curve where price is greater than marginal cost
6, What factors influence demand for a good?
7, What are (a) substitutes and (b) complements?
8, What factors affect the supply quantity?
9, What is meant by equilibrium price?
10, What effect will higher grain prices have on the supply curve of a cereal
manufacturer who makes cereals from grain?
 LESSON 5: BUSINESS ORGANIZATION, STRUCTURE AND STRATEGY
1, Grouping people together who do similar tasks is called:
A. Task departmentation
B. Geographic departmentation
C. Product departmentation
D. Functional departmentation
2, The span of control refers to the chain of command from the most senior to the
most junior. It this true or false?
3, Delayering would:
A. Make an organisation taller
B. Make an organisation flatter
4, Which of the following terms is not used by Mintzberg in his description of
organisational structure?
A. Strategic apex
B. Support base
C. Technostructure
D. Operating core
5, Which of the following principles of classical management is challenged by
matrix management?
A. Structuring the organisation on functional lines
B. Structuring the organisation on geographical lines
C. Unity of command
D. Decentralisation of decision-making
6, List the potential benefits of the informal organisation
7, What, in Mintzberg’s view, are the five component parts of an organisation?
8, Fill in the blanks
Divisionalisation is the division of a business into.......regions or products each with
its own.......... and..............responsibility
9, *Delete as appropriate
A tall organisation has a large number of levels of management. This implies a
narrow*/wide* span of control

LESSON 6: ORGANIZATION CULTURES AND COMMITTEES

1, What are the elements of the purchasing mix
A. Place, product, price, promotion
B. Quantity, quality, price, delivery
C. Product, quality, price, delivery
D. Place, product, price, delivery
2, Marketing is the management process which identifies, anticipates and satisfies
customer needs, regardless of expense. Is this true or false?
A. True
B. False
3, Selection is important to ensure that the organisation obtains people with the
qualities and skills required. Is this true or false?
A. True
B. False
4, “Bureaucracy” is another name for a:
A. Power culture
B. Role culture
C. Task culture
D. Existential culture
5, What is the name of a committees with the power to govern or administer?
A. Joint committee
B. Ad-hoc committee
C. Executive committee
D. Standing committee

LESSON 7: CORPORATE GOVERNANCE AND SOCIAL

RESPONSIBILITIES
1, Features of good corporate governance include the following.
- Splitting the roles of chair and chief executive T/F
- Appointing a majority of executive directors on the board T/F
- Audit committees are generally staffed by executive directors T/F
2, Which of the following is a nomination committees responsible for?
A. Review of financial statements
B. Review of internal control
C. Recommending potential board members
3, Which two of the following are symptoms of poor corporate governance?
A. Lack of board involvement
B. Bonuses for directors
C. The finance director also performing the role of company secretary
D. Inadequate supervision
4. A strategy for social responsibility which involves allowing a situation to
continue unresolved until the public finds out about it is a:
A. Proactive strategy
B. Reactive strategy
C. Defense strategy
D. Accommodation strategy
5, Corporate governance is essentially of what significance?
A. Control system
B. Strategic importance
C. Risk management

LESSON 8: THE ROLE OF ACCOUNTING

1, Transactions are initially recorded in which of the following?
A. Books of first entry
B. Books of ledger entry
C. Books of prime entry
D. Books of financial entry
2, The person responsible for cost accounting is most likely to be the company
treasurer. Is this true or false?
A. True
B. False
3, Internal auditors are employed by
A. The company that they audit
B. An independent auditing/ accounting firm
C. Either A or B
4, Which of the following factors have not influenced financial accounting?
A. National legislation
B. Economic factors
C. Accounting standards
D. GAAP
5, What GAAP stand for?
A. Group audit and accountancy policy
B. Generally accepted accounting practice
C. Generally accepted audit policy
D. Guidelines for accepted accounting principles.

LESSON 9: CONTROL, SECURITY AND AUDIT

1, Match the control and control type.
(a) Checking of delivery notes against invoices
(b) Back-up of computer input
(c) Bank reconciliation
(i) Prevent
(ii) Detect
(iii) Correct
2, The internal control system comprises which two of the following.
 A. Control accounting
B. Control environment
C. Control procedures
D. Control audit
3, An operational audit is also known as:
A. A system audit
B. An efficiency audit
C. A management audit
D. A value for money audit
4, A record showing who has accessed a computer system is called:
A. A fraud trail
B. An audit trail
C. A computer trail
D. A password trail
5, Internal auditors are not required to consider fraud. True of False?

LESSON 10: IDENTIFYING AND PREVENTING FRAUD

1, Who has the primary responsibility for preventing and detecting fraud?
A. The external auditors
B. The internal auditors
C. The directors
D. The shareholders
2, True or False?
- Computers increase the rick of fraud
- Motivation is a prerequisite for fraud
3, Applying incorrect rates to understate depreciation will result in a higher profit,
giving a more favourable impression of financial health. Is this true or false?
4, What is the term given to a method of fraud in the accounts receivable area, by
which cash or cheque receipts are stolen, and the theft concealed by subsequent
receipts against the outstanding debt?
A. Collusion
B. Misrepresentation
C. Teeming and lading
5, All of the following, with one exception, are internal factor which might increase
the risk profile of a business. Which is the exception?
A. Increased competition
B. Corporate restructuring
C. Upgraded management information system
D. New personnel
 LESSON 11: LEADING AND MANAGING PEOPLE
1, Who suggested that a primary managerial role is ‘developing people’?
A. Handy
B. Taylor
C. Herzberg
D. Drucker
2, Which of the following is not one of Fayol’s five functions of management?
A. Commanding
B. Controlling
C. Communicating
D. Co-ordinating
3, The overriding responsibility of the management of a business, according to
Drucker, is employee development. True or False?
4, If a manager confers with subordinates, takes their views and feelings into
account, but retains the right to make a final decision, this is a:
A. Tells style
B. Sells style
C. Consults style
D. Joins style
5, John Adair formulated the:
A. Best fit model of leadership
B. Action-centred model of leadership
C. Follower-readiness model of leadership
D. Trait theory of leadership

LESSON 12: RECRUITMENT AND SELECTION

1, What type of competence area would planning and organising be classed under?
A. Intellectual competence
B. Interpersonal competence
C. Adaptability competence
D. Results competence
2, The question “Did you complete your accountancy qualification?” is”
A. An open question
B. A closed question
C. A leading question
D. A probing question
3, “Personality and cognitive tests are more reliable predictors of job performance
than interviews” True or False?
4, Interviews fail to predict performance accurately. True or False?
5, Firms can improve their recruitment and selection practices by doing which two
of the following?
A. Clearly identifying what they want from the candidate
B. Not relying on interviews alone
C. Ensuring that new recruits are young.

LESSON 13: DIVERSITY AND EQUAL OPPORTUNITIES

1, Matt Black and Di Gloss run a small DIY shop. They’re recruiting an assistant.
Matt puts up an ad on the notice board of his Men’s Club. It says:’Person required
to assist in DIY shop. Full-time. Age under 28. Contact...’ Two candidates turn up
for interview the following day: a man and a woman (who’s heard about the job by
word of mouth, through Di). Matt interviews them both, asking work-related
questions. He also asks the woman whether she has children and how much time
she expects to spend dealing with family matters. With reference to legislation to
prevent sexual discrimination, Matt may have laid himself open to allegations of:
A. One count of discrimination
B. Two count of discrimination
C. Four count of discrimination
D. No discrimination at all
2, When a person is penalised for giving information or talking action in pursuit of
a claim of discrimination, this is known as:
A. Direct discrimination
B. Indirect discrimination
C. Victimisation
D. Harassment
3, At which stages of the recruitment and selection process should the equal
opportunities policy be implemented?
1. Advertising vacancies
2. Interviewing candidates
3. Selecting candidates
4. Offering candidates the job
A. 1, 2 and 3 only
B. 2,3 and 4 only
C. 1,3 and 4 only
D. 1, 2, 3 and 4
4, Diversity in the workplace includes differences such as personality and preferred
working style. True or False?
5, The process of talking active steps to encourage people from disadvantaged
groups to apply for jobs and training is
A. Positive action
B. Positive discrimination
 C. Positive opportunity

LESSON 14: INDIVIDUAL, GROUPS AND TEAM

1, “A small number of people with complementary skills who are committed to a
common purpose, performance goals and approach for which they hold themselves
basically accountable”. This is the definition of:
A. A group
B. A team
C. A unit
2, James is a team leader with a team of difficult employees. The work that the team
does is critical and decisions made by James involve life or death situations. James
has to follow correct procedures and sometimes shouts at member of the team in
order to ensure the safety of everyone. According to Belbin, what type of team
member is James?
A. Shaper
B. Specialist
C. Plant
D. Complete-finisher
3, High labour turnover is a characteristic of effective teams. True or False?
4, Who described the stages of group development?
A. Woodcock
B. Belbin
C. Tuckman
D. Rackham and Morgan
5, Chris is a quiet person who doesn’t generally give his opinion unless he is asked
for it but he is very creative and can solve difficult problems. Nicky is a loud person
who gets very excited by Chris’ideas.
Sonny sometimes upsets Nicky and Chris by challenging their ideas. Katja has to
step in to avert friction between them.
According to Belbin’s team roles, which of the team members is a team worker?
A. Chris
B. Nicky
C. Sonny
D. Katja

LESSON 15: MOTIVATING INDIVIDUALS AND GROUPS

1, Which one of the following is not one of Maslow’s hierarchy of needs?
A. Esteem needs
B. Safety needs
 C. Social needs
D. Cultural needs
2, A reward is the offer or promise of a benefit for contribution or success, designed
to motivate the individual of team. True or false?
3, In Vroom’s expectancy theory, the lower the values of valence and expectancy,
the higher the motivation. True or False?
4, According to Herzberg, leadership style is a motivator factor. True or False?
5. A ‘horizontal’ extension of the job to increase task variety is called:
A. Job evaluation
B. Job enrichment
C. Job enlargement
D. Job rotation

LESSON 16: TRAINING AND DEVELOPMENT

1, Which of the following are necessary for a training programme to be effective?
A. A trainee should be motivated to learn
B. There should be clear objectives
C. There should be timely feedback
D. It should not be costly
2, Which of the following is not one of the learning styles defined by Honey and
Mumford?
A. Pragmatist
B. Theorist
C. Abstractor
D. Reflector
3, The ‘learning by doing’ approach based on Kolb’s learning cycle, begins with
‘act’. Put the following stages of the cycle into the correct order.
A. Suggest principles
B. Apply principles
C. Analyse action
4, Validation of training means comparing the costs of the scheme against the
assessed benefits which are being obtained. True or False?
5, Which type of training minimises risk but does not always support transfer of
learning to the job?
A. On-the-job training
B. Off-the-job training

LESSON 17: PERFORMANCE APPRAISAL

1, Which one of the following is NOT a purpose of appraisal?
A. To identify performance levels
 B. To assess development needs
C. To encourage communication between manager and employee
D. To highlight employees’ weaknesses.
2, A 360 degree appraisal involves doing a downwards, upwards and customer
appraisal together. True or False?
3, According to Maier, which style of appraisal interview is usually preferred by the
appraisee?
A. Tell and sell
B. Tell and listen
C. Problem-solving
4, When a subordinate rates his or her manager’s leadership skills, this is an
example of:
A. Job evaluation
B. Job analysis
C. Performance management
D. Upward appraisal

LESSON 18: PERSONAL EFFECTIVENESS AND COMMUNICATION.

1, Which of the following necessarily makes a piece of work high priority?
A. Importance
B. Urgency
C. Importance and urgency
D. Other people want you to do the work by a given deadline
2, A list of activities in the order in which they must be completed is the product of
task loading. True or False?
3, When scheduling routine accounting tasks, you are more likely to use forward
scheduling rather than reverse scheduling. True or False?
4, Communication between two members of a project team from different
functions, but the same level of authority, is:
A. Upward
B. Downward
C. Lateral
D. Diagonal
5, Is the statement below true or false?
‘Coaching encompasses a much wider range of functions than mentoring.’

LESSON 19: ETHICAL CONSIDERATION

1, Which of the following would NOT be a suitable question to ask yourself when
resolving an ethical dilemma?
A. Would my colleagues think my solution is reasonable
 B. Have I thought about all the possible consequences of my solution?
C. Could I defend my solution under public scrutiny?
D. Does my solution benefit my career?
2, Fiduciary responsibility is a duty of faithful service. Is this true or false?
3, One approach to managing ethics is to ensure primarily that the company acts
within the letter of the law. What type of approach is this?
A. Compliance-based approach
B. Integrity-based approach
C. Commercial-based approach
4, Jayne, Will and Lesley work as auditors for a client called TV Co and Jayne is
the senior auditor. TV Co manufactures large expensive televisions. The director of
TV Co offers Jayne one of the newest most expensive televisions as a thank you
gift for doing the audit. If Jayne accepts the television, which one of the
fundamental principle may be threatened?
A. Professional competence
B. Confidentiality
C. Objectivity
D. Reliability
5, Managers are said to have a................responsibility (or duty of faithful service)
in respect of the entities whose purposes the serve. Which term correctly completes
this sentence?
A. Financial
B. Ethical
C. Fiduciary