acca f1 questions

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FIAFAB

ACCOUNTANT IN BUSINESS

ACCAPAPER F1

ACCOUNTANT IN BUSINESS

PRACTICE & REVISION KIT

FOR EXAMS FROM FEBRUARY 2014




& REVIS

FROM F


























P

R

A

C

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I

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E

&

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PAPER F1ACCOUNTANT IN BUSINESS

Welcome to BPP Learning Media's Practice and Revision Kit for FAB. In this, the

only FAB/F1 Practice and Revision Kit to be reviewed by the examiner:

! We include Do you know? Checklists to test your knowledge and

understanding of topics

! We provide you with two mock exams including the Specimen exam

! We provide the ACCA examiners answers as well as our own to the

Specimen exam as an additional revision aid

BPP's i-Pass product also supports this paper and is a vital tool if you are taking the

computer based exam.

FOR EXAMS FROM FEBRUARY 2014 TO AUGUST 2015

FAB

Note

FIA FAB and ACCA Paper F1 are examined under the same syllabus and study guide.





A

C

ACCOUNTANT IN BUSINESS ACCOUNTANT IN BUSINESS




Welcome to BPP Learning Media's Practice and Revision Kit for FAB. In this,

t to be reviewed by the examiner:

Checklists to test your knowledge and

mock exams including the Specimen exam

ACCA examiners answers

Specimen exam as an additional revision aid

product also supports this paper and is a vital tool if you are taking the

FOR EXAMS FROM FEBRUARY 2014 TO AUGUST 2015FOR EXAMS FROM FEBRUARY 2014 TO AUGUST 2015



FIA FAB and ACCA

FAB/F1 ACCOUNTANT IN BUSINESS

ii

First edition May 2011

Third edition November 2013

ISBN 9781 4453 7033 0

(Previous ISBN 9781 4453 9976 8)

e-ISBN 9781 4453 7068 2

British Library Cataloguing-in-Publication Data

A catalogue record for this book

is available from the British Library

Published by

BPP Learning Media Ltd

BPP House, Aldine Place

London W12 8AA

www.bpp.com/learningmedia

Printed in the United Kingdom by Polestar Wheatons

Hennock Road

Marsh Barton

Exeter

EX2 8RP

Your learning materials, published by BPP

Learning Media Ltd, are printed on paper

obtained from traceable sustainable sources.

All our rights reserved. No part of this publication

may be reproduced, stored in a retrieval system

or transmitted, in any form or by any means,

electronic, mechanical, photocopying, recording

or otherwise, without the prior written permission

of BPP Learning Media.

We are grateful to the Association of Chartered

Certified Accountants for permission to reproduce

past examination questions. The suggested

solutions in the exam answer bank have been

prepared by BPP Learning Media Ltd, except

where otherwise stated.


2013

A note about copyright

Dear Customer

What does the little mean and why does it matter?

Your market-leading BPP books, course materials and

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People write them: on their own behalf or as employees

of an organisation that invests in this activity. Copyright

law protects their livelihoods. It does so by creating

rights over the use of the content.

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Learning Media:

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! Scanning, ripcasting or conversion of our digital

materials into different file formats, uploading them

to facebook or emailing them to your friends is a

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All our rights reserved. No part of this publication

may be reproduced, stored in a retrieval system

or transmitted, in any form or by any means,

electronic, mechanical, photocopying, recording

or otherwise, without the prior written permission

We are grateful to the Association of Chartered

Certified Accountants for permission to reproduce

past examination questions. The suggested

solutions in the exam answer bank have been

prepared by BPP Learning Media Ltd, except

where otherwise stated.










What does the little mean and why does it matter?

Your market-leading BPP books, course materials and

e-learning materials do not write and update themselves.

People write them: on their own behalf or as employees

of an organisation that invests in this activity. Copyright

law protects their livelihoods. It does so by creating

rights over the use of the content.

Breach of copyright is a form of theft as well being a

criminal offence in some jurisdictions, it is potentially a

serious breach of professional ethics.

With current technology, things might seem a bit hazy

but, basically, without the express permission of BPP

Learning Media:

Photocopying our materials is a breach of copyright

Scanning, ripcasting or conversion of our digital

materials into different file formats, uploading them

to facebook or emailing them to your friends is a

breach of copyright

You can, of course, sell your books, in the form in which

you have bought them once you have finished with

them. (Is this fair to your fellow students? We update for

CONTENTS

iii

Contents Page

Finding questions

Question index .............................................................................................................................. v

Helping you with your revision ......................................................................................................viii

Using your BPP Practice and Revision Kit ....................................................................................... ix

Passing the FAB/F1 exam............................................................................................................... x

Approach to examining the syllabus................................................................................................. x

The Computer Based Examination .................................................................................................. xi

Tackling Multiple Choice Questions................................................................................................ xii

Using your BPP products..............................................................................................................xiii

Questions and answers

Questions .................................................................................................................................... 3

Answers .................................................................................................................................. 113

Exam practice

Mock exam 1 (Specimen exam)

! Questions ........................................................................................................................ 163

! Answers .......................................................................................................................... 179

! ACCA examiners answers.................................................................................................. 185

Mock exam 2

! Questions ........................................................................................................................ 193

! Answers .......................................................................................................................... 207

Review form









Page Page

Question index .................................................................................................................Question index .............................................................................................................................. v............. v

......................................................................................................viii......................................................................................................viii

Using your BPP Practice and Revision Kit .......................................................................................Using your BPP Practice and Revision Kit .......................................................................................

Passing the FAB/F1 exam........................................................................................................Passing the FAB/F1 exam........................................................................................................

Approach to examining the syllabus.............................................................................................Approach to examining the syllabus.............................................................................................

The Computer Based Examination .................................................................................................The Computer Based Examination .................................................................................................

Tackling Multiple Choice Questions.............................................................................................Tackling Multiple Choice Questions.............................................................................................

PP products........................................................................................................PP products........................................................................................................

Questions ......................................................................................................................Questions ......................................................................................................................

Answers ........................................................................................................................Answers ........................................................................................................................

Questions ..................................................................................................................... Questions .....................................................................................................................

Answers ....................................................................................................................... Answers .......................................................................................................................

ACCA examiners answers.................................................................................................. 185 ACCA examiners answers.................................................................................................. 185

Questions ..................................................................................................................... Questions .....................................................................................................................

Answers ....................................................................................................................... Answers .......................................................................................................................

FA

B/F

1 A

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v

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dex

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Answ

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Part A

: The b

usin

ess o

rganisa

tion, its sta

kehold

ers a

nd th

e

exte

rnal e

nviro

nm

ent

Busin

ess o

rganisa

tions a

nd th

eir sta

kehold

ers

Questio

ns 1

.1 to

1.8

1

3

16

5

1

13

The b

usin

ess e

nviro

nm

ent

Questio

ns 2

.1 to

2.1

7

29

3

5

6

11

4

The m

acro

-econom

ic e

nviro

nm

ent

Questio

ns 3

.1 to

3.1

4

23

2

8

8

11

5

Micro

-eco

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Questio

ns 4

.1 to

4.2

5

42

5

0

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1

17

Sectio

n A

MTQ

s

Questio

ns 5

.1 to

5.5

2

0

24

1

4

11

8

Part B

: Busin

ess o

rganisa

tion, fu

nctio

ns a

nd g

overn

ance

Busin

ess o

rganisa

tion, stru

ctu

re a

nd stra

tegy

Questio

ns 6

.1 to

6.1

0

16

1

9

19

1

19

Org

anisa

tional c

ultu

re a

nd c

om

mitte

es

Questio

ns 7

.1 to

7.2

0

33

4

0

20

1

20

Corp

ora

te g

overn

ance a

nd so

cia

l resp

onsib

ility

Questio

ns 8

.1 to

8.1

2

19

2

5

24

1

22

Sectio

n B

MTQ

s

Questio

ns 9

.1 to

9.5

2

0

24

2

6

12

3

Part C

: Accountin

g a

nd re

portin

g sy

stem

s, contro

ls and

com

plia

nce

The ro

le o

f accountin

g

Questio

ns 1

0.1

to 1

0.2

6

43

5

2

31

1

24

Contro

l, security

and a

udit

Questio

ns 1

1.1

to 1

1.1

4

23

2

8

35

1

26

Identify

ing a

nd p

reventin

g fra

ud

Questio

ns 1

2.1

to 1

2.1

6

27

3

2

37

1

28

Sectio

n C

MTQ

s

Questio

ns 1

3.1

to 1

3.5

2

0

24

4

0

12

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FA

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1 A

CC

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BU

SIN

ES

S

vi

Tim

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allo

catio

n

Page

Mark

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ins

Questio

ns

Answ

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Part D

: Leadin

g a

nd m

anagin

g in

div

iduals a

nd te

am

s

Leadin

g a

nd m

anagin

g p

eople

Questio

ns 1

4.1

to 1

4.2

0

33

4

0

45

1

30

Recru

itment a

nd se

lectio

n

Questio

ns 1

5.1

to 1

5.1

8

30

3

6

48

1

32

Div

ersity

and e

qual o

pportu

nitie

s

Questio

ns 1

6.1

to 1

6.1

0

16

1

9

50

1

33

Indiv

iduals, g

roups a

nd te

am

s

Questio

ns 1

7.1

to 1

7.1

7

28

3

4

52

1

34

Motiv

atin

g in

div

iduals a

nd g

roups

Questio

ns 1

8.1

to 1

8.1

7

28

3

4

55

1

36

Tra

inin

g a

nd d

evelo

pm

ent

Questio

ns 1

9.1

to 1

9.1

7

28

3

4

57

1

38

Perfo

rmance a

ppra

isal

Questio

ns 2

0.1

to 2

0.1

3

22

2

6

60

1

40

Sectio

n D

MTQ

s

Questio

ns 2

1.1

to 2

1.5

2

0

24

6

3

14

1

Part E

: Perso

nal e

ffectiv

eness a

nd c

om

munic

atio

n in

busin

ess

Perso

nal e

ffectiv

eness a

nd c

om

munic

atio

n

Questio

ns 2

2.1

to 2

2.1

9

31

3

7

69

1

42

Sectio

n E

MTQ

s

Questio

ns 2

3.1

to 2

3.5

2

0

24

7

1

14

4

Part F

: Pro

fessio

nal e

thic

s in a

ccountin

g a

nd b

usin

ess

Eth

ical c

onsid

era

tions

Questio

ns 2

4.1

to 2

4.2

0

33

4

0

76

1

45

Sectio

n F

MTQ

s

Questio

ns 2

5.1

to 2

5.5

2

0

24

7

9

14

6

Mixe

d b

anks

Mixe

d b

ank 1

: Questio

ns 2

6.1

to 2

6.2

3

38

4

6

81

1

47

Mixe

d b

ank 2

: Questio

ns 2

7.1

to 2

7.2

4

40

4

8

85

1

49

Mixe

d b

ank 3

: Questio

ns 2

8.1

to 2

8.2

4

40

4

8

89

1

52

Mixe

d b

ank 4

: Questio

ns 2

9.1

to 2

9.2

4

40

4

8

93

1

53

Mixe

d b

ank 5

: Questio

ns 3

0.1

to 3

0.2

4

40

4

8

97

1

54

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: Pro

fessio

nal e

thic

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ccountin

g a

nd b

usin

ess


/


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uestio

ns 2

5.1

to 2

5.5


/


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d b

ank 1

: Questio

ns 2

6.1

to 2

6.2

3


/


/

Mixe

d b

ank 2

: Questio

ns 2

7.1

to 2

7.2

4


/


/

Mixe

d b

ank 3

: Questio

ns 2

8.1

to 2

8.2

4


/


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d b

ank 4

: Questio

ns 2

9.1

to 2

9.2

4


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Mixe

d b

ank 5

: Questio

ns 3

0.1

to 3

0.2

4


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QU

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DE

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Tim

e

allo

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Page

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ins

Questio

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Answ

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: Questio

ns 3

1.1

to 3

1.2

3

38

4

6

10

1

15

5

Mixe

d b

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: Questio

ns 3

2.1

to 3

2.2

5

42

5

0

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6

15

7

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viii

Helping you with your revision

BPP Learning Media Approved Learning Partner content

As ACCAs Approved Learning Partner content, BPP Learning Media gives you the opportunity to use

examiner-reviewed revision materials for exams from February 2014 to August 2015. By incorporating

the examiners comments and suggestions regarding syllabus coverage, the BPP Learning Media

Practice and Revision Kit provides excellent, ACCA-approved support for your revision.

Selecting questions

We provide signposts to help you plan your revision.

! A full question index listing questions that cover each part of the syllabus, so that you can locate

the questions that provide practice on key topics, and see the different ways in which they might

be tested

Attempting mock exams

There are two mock exams that provide practice at coping with the pressures of the exam day. We

strongly recommend that you attempt them under exam conditions. Mock exam 1 is the Specimen

exam. Mock exam 2 reflects the question styles and syllabus coverage of the exam.



viiiviiihttp://freeaccastudymaterial.blogspot.com/







BPP Learning Media Approved Learning Partner content BPP Learning Media Approved Learning Partner content

opportunity opportunity to use to use

ry 2014 to August 2015. By incorporating ry 2014 to August 2015. By incorporating

ing syllabus coverage, the BPP Learning Media ing syllabus coverage, the BPP Learning Media

support for your revision.

of the syllabus, so that you can locate of the syllabus, so that you can locate

and see the different ways in which they might and see the different ways in which they might

ping with the pressures of the exam day. We ping with the pressures of the exam day. We

strongly recommend that you attempt them under exam conditions. strongly recommend that you attempt them under exam conditions. Mock exam 1Mock exam 1

reflects the question styles and syllabus coverage of the exam. reflects the question styles and syllabus coverage of the exam.

USING YOUR PRACTICE AND REVISION KIT

ix

Using your BPP Practice and Revision Kit

Aim of this Practice and Revision Kit

To provide the practice to help you succeed in both the paper based and computer based examinations

for Paper FAB/F1 Accountant in Business.

To pass the examination you need a thorough understanding in all areas covered by the syllabus and

teaching guide.

Recommended approach

! Make sure you are able to answer questions on everything specified by the syllabus and teaching

guide. You cannot make any assumptions about what questions may come up on your paper.

The examiners aim to discourage 'question spotting'.

! Learning is an active process. Use the DO YOU KNOW? Checklists to test your knowledge and

understanding of the topics covered in FAB/F1 Accountant in Business by filling in the blank

spaces. Then check your answers against the DID YOU KNOW? Checklists. Do not attempt any

questions if you are unable to fill in any of the blanks - go back to your BPP Interactive Text and

revise first.

! When you are revising a topic, think about the mistakes that you know that you should avoid by

writing down POSSIBLE PITFALLS at the end of each DO YOU KNOW? Checklist.

! Once you have completed the checklists successfully, you should attempt the questions on that

topic. Each question is worth 1, 2 or 4 marks and carries with it a time allocation of 1.2 minutes

per mark.

! Once you have completed all of the questions in the body of this Practice & Revision Kit, you

should attempt the MOCK EXAMS under examination conditions. Check your answers against

our answers to find out how well you did.













To provide the practice to help you succeed in both the paper based and computer based examinations To provide the practice to help you succeed in both the paper based and computer based examinations

vered by the syllabus and vered by the syllabus and

specified by the syllabus and teaching specified by the syllabus and teaching

what questions may come up on your paper. what questions may come up on your paper.

? Checklists to test your knowledge and ? Checklists to test your knowledge and

Accountant in BusinessAccountant in Business by filling in the blank by filling in the blank

DID YOU KNOWDID YOU KNOW? Checklists. Do not attempt any ? Checklists. Do not attempt any

questions if you are unable to fill in any of the blanks - go back to your questions if you are unable to fill in any of the blanks - go back to your BPP Interactive Text

When you are revising a topic, think about the mistakes that you know that you should avoid by When you are revising a topic, think about the mistakes that you know that you should avoid by

at the end of each at the end of each DO YOU KNOWDO YOU KNOW

Once you have completed the checklists successfully, you should attempt the questions on that Once you have completed the checklists successfully, you should attempt the questions on that

topic. Each question is worth 1, 2 or 4 marks and topic. Each question is worth 1, 2 or 4 marks and carries with it a time allocation of 1.2 minutes carries with it a time allocation of 1.2 minutes

Once you have completed all of the questions in the body of this Practice & Revision Kit, you Once you have completed all of the questions in the body of this Practice & Revision Kit, you

under examination conditions. Check your answers against under examination conditions. Check your answers against

our answers to find out how well you did. our answers to find out how well you did.


x

Passing the FAB/F1 exam

Paper FAB/F1 introduces students (who may not have a business background) to the business entity

made up of people and systems which interact with each other. There is a lot to learn, but none of it is

particularly difficult and a good grasp of these topics will help you in higher-level business papers (ACCA

papers P1 and P3).

To access FIA and ACCA syllabuses, visit the ACCA website.

http://www.accaglobal.com/

The exam

You can take this exam as a paper-based exam or by CBE. All questions in the exam are compulsory.

This means you cannot avoid any topic, but also means that you do not need to waste time in the exam

deciding which questions to attempt. There are 46 MCQs in the exam, worth either 1 or 2 marks, as

well as 6 multiple task questions worth 4 marks each and a mixture of MCQs and other types of OTQ

(number entry, multiple response and multiple response matching) in the CBE. This means that the

examiner is able to test most of the syllabus at each sitting, and that is what he aims to do. So you need

to have revised right across the syllabus for this exam.

Revision

This kit has been reviewed by the FAB/F1 examiner and contains the Specimen exam, so if you just

worked through it to the end you would be very well prepared for the exam. It is important to tackle

questions under exam conditions. Allow yourself just the number of minutes shown next to the questions

in the index and dont look at the answers until you have finished. Then correct your answer and go

back to the Interactive Text for any topic you are really having trouble with. Try the same question again

a week later you will be surprised how much better you are getting. Doing the questions like this will

really show you what you know, and will make the exam experience less worrying.

Doing the exam

If you have honestly done your revision you can pass this exam. There are certain points which you must

bear in mind:

! Read the question properly.

! Dont spend more than the allotted time on each question. If you are having trouble with a

question leave it and carry on. You can come back to it at the end.

Approach to examining the syllabus

FAB/F1 is a two-hour paper. It can be taken as a paper based or a computer based examination.

The exam is structured as follows:

No of marks 30 compulsory multiple choice questions of 2 marks each 60 16 compulsory multiple choice questions of 1 mark each 16 6 compulsory multiple task questions of 4 marks each 24

100




xhttp://freeaccastudymaterial.blogspot.com/







ve a business background) to the business entity

other. There is a lot to learn, but none of it is other. There is a lot to learn, but none of it is

will help you in higher-level business papers (ACCA will help you in higher-level business papers (ACCA

You can take this exam as a paper-based exam or by CBE. All questions in the exam are compulsory. You can take this exam as a paper-based exam or by CBE. All questions in the exam are compulsory.

This means you cannot avoid any topic, but also means that you do not need to waste time in the exam This means you cannot avoid any topic, but also means that you do not need to waste time in the exam

Qs in the exam, worth either 1 or 2 marks, as Qs in the exam, worth either 1 or 2 marks, as

and a mixture of MCQs and other types of OTQ and a mixture of MCQs and other types of OTQ

onse matching) in the CBE. This means that the onse matching) in the CBE. This means that the

sitting, and that is what he aims to do. So you need sitting, and that is what he aims to do. So you need

This kit has been reviewed by the FAB/F1 examiner and contains the Specimen exam, so if you just This kit has been reviewed by the FAB/F1 examiner and contains the Specimen exam, so if you just

ll prepared for the exam. It is important to tackle ll prepared for the exam. It is important to tackle

questions under exam conditions. Allow yourself just the number of minutes shown next to the questions questions under exam conditions. Allow yourself just the number of minutes shown next to the questions

in the index and dont look at the answers until you have finished. Then correct your answer and go in the index and dont look at the answers until you have finished. Then correct your answer and go

back to the Interactive Text for any topic you are really having trouble with. Try the same question again back to the Interactive Text for any topic you are really having trouble with. Try the same question again

a week later you will be surprised how much better a week later you will be surprised how much better you are getting. Doing the questions like this will you are getting. Doing the questions like this will

really show you what you know, and will make the exam experience less worrying. really show you what you know, and will make the exam experience less worrying.

If you have honestly done your revision you can paIf you have honestly done your revision you can pa

Read the question properly. Read the question properly.

Dont spend more than the allotted time on each question. If you are having trouble with a Dont spend more than the allotted time on each question. If you are having trouble with a

question leave it and carry on. You can come back to it at the end. question leave it and carry on. You can come back to it at the end.


Approach to examining the syllabus



FAB/F1 is a two-hour paper. It can be taken as FAB/F1 is a two-hour paper. It can be taken as

The exam is structured as follows: The exam is structured as follows:

30 compulsory multiple choice questions of 2 marks each30 compulsory multiple choice questions of 2 marks each

16 compulsory multiple choice questions of 1 mark each 16 compulsory multiple choice questions of 1 mark each

6 compulsory multiple task questions of 4 marks each 6 compulsory multiple task questions of 4 marks each

PASSING THE FAB/F1 EXAM

xi

The Computer Based Examination

Computer based examinations (CBEs) are available for the first seven FIA papers (not papers FAU, FTM

or FFM), in addition to the conventional paper based examination.

Computer based examinations must be taken at an ACCA CBE Licensed Centre.

How does CBE work?

! Questions are displayed on a monitor

! Candidates enter their answer directly onto the computer

! Candidates have two hours to complete the examination

! When the candidate has completed their examination, the final percentage score is calculated

and displayed on screen

! Candidates are provided with a Provisional Result Notification showing their results before

leaving the examination room

! The CBE Licensed Centre uploads the results to the ACCA (as proof of the candidate's

performance) within 72 hours

! Candidates can check their exam status on the ACCA website by logging into myACCA.

Benefits

! Flexibility as a CBE can be sat at any time.

! Resits can also be taken at any time and there is no restriction on the number of times a

candidate can sit a CBE.

! Instant feedback as the computer displays the results at the end of the CBE.

! Results are notified to ACCA within 72 hours.

CBE question types

! Multiple choice choose one answer from four options

! Number entry key in a numerical response to a question

! Multiple response select more than one response by clicking the appropriate tick boxes

! Multiple response matching select a response to a number of related part questions by

choosing one option from a number of drop down menus

For more information on computer-based exams, visit the ACCA website.

http://www.accaglobal.com/en/student/Exams/Computer-based-exams.html












r the first seven FIA papers (not papers FAU, FTM r the first seven FIA papers (not papers FAU, FTM

ion, the final percentage score is calculated ion, the final percentage score is calculated

lt Notification showing their results before lt Notification showing their results before

The CBE Licensed Centre uploads the results to the ACCA (as proof of the candidate's The CBE Licensed Centre uploads the results to the ACCA (as proof of the candidate's

Candidates can check their exam status on the ACCA website by logging into myACCA. Candidates can check their exam status on the ACCA website by logging into myACCA.

as a CBE can be sat at any time.

can also be taken at any time and there is no restriction on the number of times a can also be taken at any time and there is no restriction on the number of times a

as the computer displays the results at the end of the CBE. as the computer displays the results at the end of the CBE.

within 72 hourswithin 72 hours.

Multiple choice choose one answer from four options Multiple choice choose one answer from four options

Number entry key in a numerical response to a question Number entry key in a numerical response to a question

Multiple response select more than one re Multiple response select more than one re

Multiple response matching select a respon Multiple response matching select a respon

choosing one option from a number of drop down menus choosing one option from a number of drop down menus

For more information on computer-based exams, visit the ACCA website. For more information on computer-based exams, visit the ACCA website.

http://www.accaglobal.com/en/studenhttp://www.accaglobal.com/en/studen



xii

Tackling Multiple Choice Questions

MCQs are part of all FIA exams and the first three ACCA exams (F1, F2 and F3). MCQs may feature in

the CBE, along with other types of question, while the paper based exam is made up entirely of MCQs.

The MCQs in your exam contain four possible answers. You have to choose the option that best

answers the question. The three incorrect options are called distracters. There is a skill in answering

MCQs quickly and correctly. By practising MCQs you can develop this skill, giving you a better chance of

passing the exam.

You may wish to follow the approach outlined below, or you may prefer to adapt it.

Step 1 Skim read all the MCQs and identify what appear to be the easier questions.

Step 2 Attempt each question starting with the easier questions identified in Step 1. Read the

question thoroughly. You may prefer to work out the answer before looking at the options,

or you may prefer to look at the options at the beginning. Adopt the method that works

best for you.

Step 3 Read the four options and see if one matches your own answer. Be careful with numerical

questions as the distracters are designed to match answers that incorporate common

errors. Check that your calculation is correct. Have you followed the requirement exactly?

Have you included every stage of the calculation?

Step 4 You may find that none of the options matches your answer.

! Re-read the question to ensure that you understand it and are answering the

requirement

! Eliminate any obviously wrong answers

! Consider which of the remaining answers is the most likely to be correct and select

the option

Step 5 If you are still unsure make a note and continue to the next question

Step 6 Revisit unanswered questions. When you come back to a question after a break you often

find you are able to answer it correctly straight away. If you are still unsure have a guess.

You are not penalised for incorrect answers, so never leave a question unanswered!

After extensive practice and revision of MCQs, you may find that you recognise a question when you sit

the exam. Be aware that the detail and/or requirement may be different. If the question seems familiar

read the requirement and options carefully do not assume that it is identical.




xiixiihttp://freeaccastudymaterial.blogspot.com/







MCQs are part of all FIA exams and the first three ACCA exams (F1, F2 and F3). MCQs may feature in MCQs are part of all FIA exams and the first three ACCA exams (F1, F2 and F3). MCQs may feature in

e paper based exam is made up entirely of MCQs. e paper based exam is made up entirely of MCQs.

choose the option that best choose the option that best

stracters. There is a skill in answering stracters. There is a skill in answering

n develop this skill, giving you a better chance of n develop this skill, giving you a better chance of

Skim read all the MCQs and identify what appear to be the easier questions. Skim read all the MCQs and identify what appear to be the easier questions.


starting with the easier questions identified in Step 1. Read the identified in Step 1. Read the

. You may prefer to work out the answer before looking at the options, . You may prefer to work out the answer before looking at the options,

at the beginning. Adopt the method that works at the beginning. Adopt the method that works


your own answer. Be careful with numerical your own answer. Be careful with numerical

questions as the distracters are designed to match answers that incorporate common questions as the distracters are designed to match answers that incorporate common

errors. Check that your calculation is correcterrors. Check that your calculation is correct. Have you followed the requirement exactly? . Have you followed the requirement exactly?

Have you included every stage of the calculation? Have you included every stage of the calculation?


You may find that none of the options matches your answer. You may find that none of the options matches your answer.

Re-read the question to ensure that you understand it and are answering the Re-read the question to ensure that you understand it and are answering the

Eliminate any obviously wrong answers Eliminate any obviously wrong answers

Consider which of the remaining answers is the most likely to be correct and select Consider which of the remaining answers is the most likely to be correct and select


If you are still unsure make a note and continue to the next question If you are still unsure make a note and continue to the next question


Revisit unanswered questions. When you come back to a question after a break you often Revisit unanswered questions. When you come back to a question after a break you often

find you are able to answer it correctly straight away. If you are still unsure have a guess. find you are able to answer it correctly straight away. If you are still unsure have a guess.

You are not penalised for incorrect answers, so You are not penalised for incorrect answers, so



After extensive practice and revision of MCQs, you may find that you recognise a question when you sit After extensive practice and revision of MCQs, you may find that you recognise a question when you sit

the exam. Be aware that the detail and/or requirementhe exam. Be aware that the detail and/or requiremen

read the requirement and options carefully do not assume that it is identical. read the requirement and options carefully do not assume that it is identical.

TACKLING MULTIPLE CHOICE QUESTIONS

xiii

Using your BPP products

This Kit gives you the question practice and guidance you need in the exam. Our other products can also help

you pass:

! Passcards provide you with clear topic summaries and exam tips

! i-Pass CDs are a vital revision tool for anyone taking FIA/ACCA CBEs and offer tests of

knowledge against the clock in an environment similar to that encountered in a computer

based exam

You can purchase these products by visiting www.bpp.com/learningmedia














r products can also help r products can also help




are a vital revision tool for anyone taking FIA/ACCA CBEs and offer tests of are a vital revision tool for anyone taking FIA/ACCA CBEs and offer tests of

similar to that encountered in a computer similar to that encountered in a computer



xiv



xivxivhttp://freeaccastudymaterial.blogspot.com/

1

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QUESTIONS

3

Check that you can fill in the blanks in the statements below before you attempt any questions. If in doubt,

you should go back to your BPP Interactive Text and revise first.

! Organisations can achieve results which i cannot achieve by themselves.

! A .. organisation (NGO) is an independent voluntary association of people acting together

for some common purpose (other than achieving government office or making money).

! Stakeholders are those individuals or groups that, potentially, have an interest in what the organisation

does. These stakeholders can be w. the organisation, c.. to the organisation or external to the

organisation.

! G. p influences the economic environment, the framework of laws, industry structure and

certain operational issues. Political i.. is a cause of risk.

! P. is the right of the individual not to suffer unauthorised disclosure of information.

! A contract is a l b. agreement.

! O. is the contracting out of specified operations or services to an external vendor.

! The v. c.. describes those activities of the organisation that add value to purchased inputs.

! The c e.. is structured by five forces: barriers to entry; substitute products; the bargaining

power of c; the bargaining power of suppliers; c rivalry.

! Equilibrium n.. i is determined using aggregate supply and aggregate demand analysis.

! Demand pull i. arises from an excess of aggregate demand over the productive capacity of the

economy.

! C. p. inflation arises from increases in the costs of production.

! Economic .. may be measured by increases in the real gross national product (GNP) per head of the

population.

! Macroeconomic policy objectives relate to economic growth, i, unemployment and the b of

p..

! If a government decides to use fiscal policy to influence demand in the economy, it can choose either

e. changes or t.. changes as its policy instrument.

! M p.. uses money supply, interest rates or credit controls to influence aggregate demand.

! A surplus or deficit on the balance of payments usually means a surplus or deficit on the c. a.

! The m.. e.. refers to the immediate operational environment including suppliers, competitors,

customers, stakeholders and intermediaries.

! Elasticity, in general, refers to the relationship between two variables. Price elasticity of demand explains

the relationship between change in q..demanded and changes in p...

! I e.. of demand measures the responsiveness of demand to changes in household income.

C..elasticity of demand is determined by the availability of substitute (competitors') products.

! The effects of demand and supply conditions on markets can be analysed by studying the behaviour of

both demand and supply c..

Do you know? The business organisation, its stakeholders and the external environment








below before you attempt any questions. If in doubt,

ary association of people acting together ary association of people acting together

in what the organisation in what the organisation

to the organisation or external to the to the organisation or external to the

framework of laws, industry structure and framework of laws, industry structure and

ffer unauthorised disclosure of information. ffer unauthorised disclosure of information.

ations or services to an external vendor. ations or services to an external vendor.

tion that add value to purchased inputs. tion that add value to purchased inputs.

to entry; substitute products to entry; substitute products

c rivalryc rivalry.

is determined using aggregate suppis determined using aggregate supply and aggregate demand analysis. ly and aggregate demand analysis.

arises from an excess of aggregate dema arises from an excess of aggregate demand over the productive capacity of the nd over the productive capacity of the

arises from increases in the costs of production. arises from increases in the costs of production.

may be measured by increases in the may be measured by increases in the real

relate to economic growth, relate to economic growth,

If a government decides to use fiscal policy to in If a government decides to use fiscal policy to in



changes as its policy instrument. changes as its policy instrument.

uses money supply, interest rates or credit controls to influence uses money supply, interest rates or credit controls to influence

A surplus or deficit on the balance of payments usually means a A surplus or deficit on the balance of payments usually means a

The m.. e.. The m.. e.. refers to the immediate operational envirorefers to the immediate operational enviro

customers, stakeholders and intermediaries. customers, stakeholders and intermediaries.

Elasticity, in general, refers to the relationship betw Elasticity, in general, refers to the relationship betw

the relationship between the relationship between change in

I e.. of demand I e.. of demand

C..elasticity of demand C..elasticity of demand

The effects of The effects of demand and supply

both demand and supply both demand and supply


Do you know? The business organisation, its stakeholders and the external environment



4

Could you fill in the blanks? The answers are in bold. Use this page for revision purposes as you approach

the exam.

! Organisations can achieve results which individuals cannot achieve by themselves.

! A non-governmental organisation (NGO) is an independent voluntary association of people acting

together for some common purpose (other than achieving government office or making money).

! Stakeholders are those individuals or groups that, potentially, have an interest in what the organisation

does. These stakeholders can be within the organisation, connected to the organisation or external to

the organisation.

! Government policy influences the economic environment, the framework of laws, industry structure and

certain operational issues. Political instability is a cause of risk.

! Privacy is the right of the individual not to suffer unauthorised disclosure of information.

! A contract is a legally binding agreement.

! Outsourcing is the contracting out of specified operations or services to an external vendor.

! The value chain describes those activities of the organisation that add value to purchased inputs.

! The competitive environment is structured by five forces: barriers to entry; substitute products; the

bargaining power of customers; the bargaining power of suppliers; competitive rivalry.

! Equilibrium national income is determined using aggregate supply and aggregate demand analysis.

! Demand pull inflation arises from an excess of aggregate demand over the productive capacity of the

economy.

! Cost push inflation arises from increases in the costs of production.

! Economic growth may be measured by increases in the real gross national product (GNP) per head of

the population.

! Macroeconomic policy objectives relate to economic growth, inflation, unemployment and the balance

of payments.

! If a government decides to use fiscal policy to influence demand in the economy, it can choose either

expenditure changes or tax changes as its policy instrument.

! Monetary policy uses money supply, interest rates or credit controls to influence aggregate demand.

! A surplus or deficit on the balance of payments usually means a surplus or deficit on the current

account.

! The micro environment refers to the immediate operational environment including suppliers,

competitors, customers, stakeholders and intermediaries.

! Elasticity, in general, refers to the relationship between two variables. Price elasticity of demand explains

the relationship between change in quantity demanded and changes in price.

! Income elasticity of demand measures the responsiveness of demand to changes in household income.

Cross elasticity of demand is determined by the availability of substitute (competitors') products.

! The effects of demand and supply conditions on markets can be analysed by studying the behaviour of

both demand and supply curves.

Did you know? The business organisation, its stakeholders and the external environment




44http://freeaccastudymaterial.blogspot.com/


e this page for revision purposes as you approach

voluntary association of people acting voluntary association of people acting

hieving government office or making money). hieving government office or making money).

in what the organisation in what the organisation

to the organisation or external to to the organisation or external to

influences the economic environment, the framework of laws, industry structure and influences the economic environment, the framework of laws, industry structure and

is the right of the individual not to suffer unauthorised disclosure of information. is the right of the individual not to suffer unauthorised disclosure of information.

erations or services to an external vendor. erations or services to an external vendor.

tion that add value to purchased inputs. tion that add value to purchased inputs.

is structured by five forces: barriersis structured by five forces: barriers to entry; substitute products to entry; substitute products

supplierssuppliers; ; competitive rivalrycompetitive rivalry

is determined using aggregate supply and aggregate demand analysis. is determined using aggregate supply and aggregate demand analysis.

arises from an excess of aggregate demand over the productive capacity of the arises from an excess of aggregate demand over the productive capacity of the

arises from increases in the costs of production. arises from increases in the costs of production.

may be measured by increases in the may be measured by increases in the real

relate to economic growth, relate to economic growth,

If a government decides to use fiscal policy to in If a government decides to use fiscal policy to in

changes as its policy instrument. changes as its policy instrument.

uses money supply, interest rates uses money supply, interest rates

A surplus or deficit on the balance of payments usually means a A surplus or deficit on the balance of payments usually means a

The micro environment The micro environment refers to the immediate operational environment including suppliers, refers to the immediate operational environment including suppliers,

competitors, customers, stakeholders and intermediaries. competitors, customers, stakeholders and intermediaries.

Elasticity, in general, refers to the relationship betw Elasticity, in general, refers to the relationship betw

the relationship between the relationship between

Income elasticity of demand Income elasticity of demand

Cross elasticity of demand Cross elasticity of demand

The effects of The effects of demand and supply

both demand and supply both demand and supply


Did you know? The business organisation, its stakeholders and the external environment


QUESTIONS

5

1 Business organisations and their stakeholders 16 mins

1.1 An organisation is a social arrangement which pursues collective........................................, which

controls its own performance and which has a boundary separating it from its environment.

Which of the following words best completes this sentence?

A Profits

B Stakeholders

C Goals

D Tactics (2 marks)

1.2 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 (2 marks)

1.3 Which one of the following statements is true?

A Limited company status means that a company is only allowed to trade up to a predetermined

turnover level in any one year.

B For organisations that have limited company status, ownership and control are legally separate.

C The benefit of being a sole trader is that you have no personal liability for the debts of your

business.

D Ordinary partnerships offer the same benefits as limited companies but are usually formed by

professionals such as doctors and solicitors. (2 marks)

1.4 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 (1 mark)

1.5 Which of the following groups may be considered to be stakeholders in the activities of a nuclear power

station?

(i) The government

(ii) Environmental pressure groups

(iii) Employees

(iv) Local residents

A (i), (iii) and (iv)

B (i), (ii), (iii) and (iv)

C (iii) only

D (i) and (iii) only (2 marks)

1.6 Secondary stakeholders is another term for which group of stakeholders?

A Internal stakeholders

B Connected stakeholders

C External stakeholders (1 mark)















...................................., which ...................................., which

(2 marks)(2 marks)


output of a number of individuals working together output of a number of individuals working together


A Limited company status means that a company is only allowed to trade up to a predetermined A Limited company status means that a company is only allowed to trade up to a predetermined

B For organisations that have limited company statuB For organisations that have limited company status, ownership and control are legally separate. s, ownership and control are legally separate.

C The benefit of being a sole trader is that you C The benefit of being a sole trader is that you have no personal liability for the debts of your have no personal liability for the debts of your

D Ordinary partnerships offer the same benefits D Ordinary partnerships offer the same benefits as limited companies but are usually formed by as limited companies but are usually formed by

professionals such as doctors and solicitors. professionals such as doctors and solicitors.


1.4 An organisation is owned and run by central govern1.4 An organisation is owned and run by central govern

which of the following statements? which of the following statements?

A A voluntary sector organisation A A voluntary sector organisation

B A private sector organisation B A private sector organisation

C A public sector organisation C A public sector organisation


1.5 Which of the following groups may be considered to 1.5 Which of the following groups may be considered to

(i) The government (i) The government

(ii) Environmental pressure groups (ii) Environmental pressure groups

(iii) Employees (iii) Employees

(iv) Local residents (iv) Local residents

A (i), (iii) and (iv) A (i), (iii) and (iv)

B (i), (ii), (iii) and (iv) B (i), (ii), (iii) and (iv)

C (iii) only C (iii) only

D (i) and (iii) only D (i) and (iii) only


1.6 Secondary stakeholders is another term for which group of stakeholders? 1.6 Secondary stakeholders is another term for which group of stakeholders?

A Internal stakeholders A Internal stakeholders

B Connected stakeholders B Connected stakeholders

C External stakeholders C External stakeholders



6

1.7 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 (1 mark)

1.8 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 (2 marks)

(Total = 13 marks)

2 The business environment 35 mins

2.1 What is an acronym used to describe the key elements of an organisations external environment?

A SWOT

B SMART

C PEST (1 mark)

2.2 Which of the following is not a legitimate method of influencing government policy in the interests of a

business?

A Employing lobbyists to put the organisations case to ministers or civil servants

B Giving lawmakers non-executive directorships

C Offering financial incentives to public officials to use their influence

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