Mirchawala’s Hub of Accountancy

F1: Accountant in Business

F1: Mock Exam 3
Question#1:
Publish Co produces study material for a professional examination. In order to meet urgent demand for
finished texts, it must recruit five copy typists at short notice. The typists must be able to perform the
required tasks immediately and the company has to be totally confident that they have the ability to do
the job.
Which of the following selection methods is most appropriate for Publish Co?
A. Panel interview
B. Proficiency test
C. Psychometric test
D. One-to-one interview
Question#2:
Emma is preparing a budget which involves many calculations. Emma wishes to try out different data in
different ways to answer 'what if' questions about an uncertain future.
Which type of computer software will be most suited for this purpose?
A. Spreadsheets
B. Database
Question#3:
In the communication process, which of the following is an example of 'psychological noise'?
A. Technical words and phrases used
B. Timing of the message
C. Preconceptions of the receiver
D. Status or position of the sender
Question#4:
Governments in many countries are encouraging improved standards of corporate governance, focusing
mainly on public companies whose securities are listed on recognized capital markets.
Why are best practices in corporate governance of special importance to these companies?
A. Public companies are subject to a greater degree of separation between those who manage the
company and those who own it
B. All other types of business organizations are already subject to and fully implement high standards
of corporate governance
C. Public companies are subject to less stringent regulation than other types of commercial
organization
D. Public companies have institutional investors and have greater ethical responsibilities to these
investors than to personal investors
Question#5:
Terri is carrying out a performance appraisal interview with Kazim, her assistant. Terri started off the
interview by giving Kazim her view of how he has performed during the year. Kazim has then described
his views on the job and the responsibilities it entails and has given opinions on how he would like to
progress in the future. Terri has acknowledged Kazim's views and has prompted further input by asking
open questions and noting the responses given.
The approach to performance appraisal adopted by Terri is which of the following?
A. 360 degree appraisal
B. Tell and sell
C. Tell and listen
D. Joint problem solving

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Question#6:
Which of the following is an organizational feature of a co-operative business?
A. Staffing by volunteers as well as full time employees
B. Finance from grants or contracts
C. Distribution of surplus profits in proportion to purchases
Question#7:
If a member of the accounts team sends a report directly to the head of human resources, what type
of communication is this?
A. Horizontal
B. Vertical
C. Diagonal
Question#8:
A bank customer has been defrauded of their money in an account. A cyber-criminal sent an email to
the customer pretending to be their bank and suggesting that in order to make further transactions they
needed to update their personal and banking records. They asked the customer to supply their details
again, so that the bank database could be updated.
What type of cyber-attack is this an example of?
A. Phishing
B. Distributed denial of service (DDoS)
C. Hacking
D. Ransom ware
Question#9:
In the country of Arcadia all adults are classifed as employable. Children are ineligible for employment.
The death rate for children is very low and may be ignored for demographic purposes. Birth rates and
death rates are quoted as per thousand of the population as a whole.
Which of the following will yield the largest increase in the number of employable people in the long
term?
A. A birth rate of 10 per thousand and a death rate of 9 per thousand
B. A birth rate of 12 per thousand and a death rate of 10 per thousand
C. A birth rate of 9 per thousand and a death rate of 10 per thousand
D. A birth rate of 10 per thousand and a death rate of 12 per thousand
Question#10:
Which of the following is a characteristic of the informal organisation?
A. It is made up of individuals at the same level in the organization
B. It evolves over time and can change rapidly
C. Communication flows are mainly upward and downward
D. Information flows more slowly than through the formal organization
Question#11:
James received a memorandum asking him to complete a task by 15 April. Unfortunately he missed this
deadline, because he did not receive the memorandum until 17 April. This was despite the fact that the
memorandum was sent on 12 April.
What type of communication problem is this?
A. Personality
B. Misunderstanding
C. System

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Question#12:
George's preferred learning style is to form opinions based on what should work in practical situations.
He dislikes management theories, finding it difficult to relate them to real life experiences and his
personal situation.
Which of Honey and Mumford's learning styles does George demonstrate?
A. Reflector
B. Theorist
C. Analyst
D. Pragmatist
Question#13:
A professional accountant has encountered a situation at work which he feels places him in an ethical
dilemma, but he is not sure who he could seek advice from about the dilemma.
Which of the following could the accountant consult?
(1)The board of directors or the audit committee in his own organisation
(2)His professional body
(3)A legal adviser
A. 1 and 3 only
B. 1 and 2 only
C. 2 only
D. 1, 2 and 3
Question#14:
Do each of the following businesses typify Handy's power culture?
Yes No
One in which a founding family member exerts significant influence at strategic management level
One that relies on specialist expertise at different levels of management
Question#15:
Which of the following is an advantage of on-the-job training?
A. It takes account of job context
B. It allows focus on learning, away from interruptions
C. It suits hands-off learning styles
Question#16:
Which of the following measures might a government introduce to increase consumer demand in the
economy?
A. Strict credit controls
B. A policy of high interest rates
C. Reduced levels of taxation
Question#17:
The hierarchy developed by Robert Anthony suggests that business control is exercised primarily by
managers at which level of the organisation?
A. Divisional
B. Operational
C. Strategic
D. Tactical

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Question#18:
Which TWO of the following statements about Porter's five forces model are true?
A. The bargaining power of customers may be reduced if products can be differentiated effectively
B. Threat of new entrant is lower when existing suppliers derive purchasing economies of scale
C. A high level of competitive rivalry in an industry is always dependent on the number of producers in
the market
D. Competitive rivalry in an industry will intensify when there are significant threats from substitutes
Question#19:
Which of the following is a non-discretionary control?
A. Access to a database is password protected
B. Orders must be signed by a manager before processing
C. Staff must be checked against national criminal records prior to employment
Question#20:
It is important to promote proper and complete dialogue between the company registration body and a
company. It is also important to ensure that essential administrative requirements laid down by the
company registration body come to the attention of the board.
Which TWO of the following positions should be segregated to ensure this?
A. Director
B. Chairman
C. Company secretary
D. Chief executive officer
Question#21:
A management consultant has recently visited XYZ Co and has made a number of observations about the
company.
Of the observations listed below, which TWO are liable to lead to conflict arising at XYZ Co?
A. Resources are scarce, especially capital funding for new projects
B. Goals are aligned between individuals and teams
C. Work methods and working styles vary significantly between departments
D. Staff do not appear to be excessively busy
Question#22:
Which TWO of the following are connected stakeholders to an organisation?
A. Employees
B. Suppliers
C. Managers
D. Customers
Question#23:
Which of the following is an example of standing data recorded in a payroll system?
A. Total salary received in the year to date
B. Tax reference number issued by the tax authority
C. Total deductions from gross income each month
D. Pension contributions deducted from salary
Question#24:
Which of the following tests measures an individual's current ability to perform a specific task or
operation?
A. Intelligence test
B. Aptitude test
C. Proficiency test

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Question#25:
Objectives set by individuals as part of their personal development plans should conform to the 'SMART'
or 'SMARTER' criteria.
What do the first two letters of 'SMART' or 'SMARTER' represent?
(1)Standardized
(2)Specific
(3)Motivational
(4)Measureable
A. 2 and 3
B. 1 and 3
C. 2 and 4
D. 1 and 4
Question#26:
A threat to _________ may arise if a professional accountant in public practice performs services for
clients whose interests are in conflict.
Which word correctly completes this sentence?
A. Objectivity
B. Integrity
C. Confidentiality
Question#27:
BTH Co has just had to recruit some additional staff to clear a backlog of orders in its warehouse and the
operations director is concerned about the impact this will have on BTH Co's staff costs compared to the
budgeted figure.
Which TWO of the following reports would it be most useful for the operations director to look at?
A. BTH Co's wages and salaries cost schedules
B. The cost schedules for BTH Co's administration costs as a whole
C. Variance reports for wages and salaries
D. Variance reports for BTH Co's administration costs as a whole
Question#28:
'Blockchain eliminates the need for data and information to be stored and managed centrally'
Is the above statement true or false?
A. False
B. True
Question#29:
Which of the following describes a proactive strategy for corporate social responsibility?
A. Looking to minimize additional obligations arising from faults reported by customers
B. Dealing with situations after the public become aware of them
C. Recalling faulty products before customers become aware of the faults
Question#30:
Which two of the following would be classified as standing data in the payroll system?
A. Name and address
B. Rate of pay
C. Gross pay to date
Question#31:
Which type of goods has a cross-elasticity of demand of -1?
A. Unrelated goods
B. Homogenous goods
C. Perfect substitutes D. Perfect complements

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Question#32:
Hirotorecognises that as a chief executive officer a large part of his time is spent as the company
figurehead at dinners, conferences, etc.
Which of Mintzberg's managerial roles is being described by Hiroto?
A. Decisional
B. Interpersonal
C. Informational
Question#33:
In response to rumours about possible redundancies, the managing director at F Co called a meeting at
which he explained to the staff that a significant decline in sales meant that the company had to make
job cuts in order to reduce its operating costs.
He explained that the exact numbers of job losses had not been finalized at this stage, nor when they
would take effect, but he said that he felt the number would be quite significant, and they would affect
all the departments across the company.
Which of the following aspects of ethical behavior describe the managing director's statement at the
meeting?
(1)Openness
(2)Accountability
(3)Respect
A. 2 and 3 only B. 1 and 2 only C. 1, 2 and 3 D. D. 1 and 3 only
Question#34:
In relation to fraud prevention, which of the following statements is correct in respect of the role of
the external auditor?
A. The work of the external auditor has nothing to do with fraud prevention, so the external auditor
has no responsibility in this respect
B. The external auditor must ensure that all internal systems are capable of detecting every type of
fraud
C. The external auditor has primary responsibility for preventing and detecting fraud and is
accountable to the shareholders for this
D. The external auditor's procedures should provide reasonable assurance that misstatements arising
from fraud will be detected
Question#35:
An organisation is aiming to keep a stakeholder satisfied.
According to Mendelow's grid, what level of interest and power does this stakeholder have?
Low level High level
Interest
Power
Question#36:
Which of the following is a characteristic of an informal group?
A. Focused on organizational objectives
B. Common purpose
C. Affinity or common interests
D. Complementary skills

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Question#37:
David is an accountant. He has not yet read details received yesterday of recent changes to tax
legislation, and is about to visit a client to give some tax advice.
Which fundamental principle appears to be compromised in this situation?
A. Professional competence
B. Objectivity
C. Integrity
Question#38:
Which of the following statements concerning external audit is CORRECT?
A. External auditors report to shareholders on the stewardship of directors
B. External audit is designed to add value and improve an organization’s operations
C. External auditors are often employees of the company
Question#39:
As a direct result of an employee's ineffectiveness at work, potential problems were not identified and
consequently no counter measures could be taken in time to prevent the problem arising.
Which of the following most accurately reflects the nature of the employee's ineffectiveness?
A. Failure to communicate the potential problem
B. Failure to meet deadlines
C. Failure to produce the quantity required
D. Failure to meet quality requirements
Question#40:
Which of the following principles is usually recommended for inclusion in legislation on data
protection?
A. The data user should provide the data subject with regular and detailed information on the data
held
B. All personal data held by data users should be updated by checking this data with the subject at
regular intervals
C. All personal data held by data users should be adequate for the purposes of the data user but not
excessive
D. All personal data held by data users should be reviewed regularly and automatically deleted after a
specified period of time
Question#41:
Analysis of costs and revenues of different products would assist the marketing department in respect
of which activity?
A. Targeting sales efforts towards the most appropriate socio-economic groups
B. Differentiating the technical features of products from those of competitors
C. Determining production bonuses to be paid
D. Calculating the maximum discounts that sales personnel are permitted to offer
Question#42:
According to Maslow's hierarchy of needs, which level of need is immediately below self-
actualization?
A. Safety
B. Esteem
C. Social and belonging D. Security

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Question#43:
The management team at ABC Co is preparing a Corporate Code of Ethics.
The following statements are commitments of ABC Co's directors and employees. Which TWO of
these are legitimate entries for inclusion into the code?
A. Obey the law, and conduct themselves with honesty and integrity
B. Ensure we maintain the same standards as other companies operating in our business sector
C. Avoid engaging in any activity where their personal interests interfere, or appear to interfere with
those of the company
D. Ensure that any dealings with customers and suppliers maximize ABC's profits at all times
Question#44:
Which TWO of the following are DISADVANTAGES of a tall organisation?
A. Managers only have limited time to supervise each employee
B. Rigid supervision may block employee initiative
C. Decision making and responses tend to be slow
Question#45:
Ethical standards of behavior within accountancy are mainly promoted by which of the following?
Codes of conduct implemented by professional bodies
A. Laws implemented by central governments
B. Regulations issued by government departments and agencies
C. Rules established by education committees
Question#46:
Can each of the following be delegated by a manager?
Yes No
Accountability
Authority

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‘’Section B”
Question#47:
Egalitarian is a country facing serious economic and financial difficulties. After several years of economic
growth, consumer demand has reduced, bringing about an increase in unemployment. One of the
reasons for this is that heavily unionized companies in the once-important manufacturing sector have
continued to exert strong influence in pay negotiations, despite a significant reduction in demand for
their products. The collapse in demand has been so intense that it is believed that communities in
Egalitarian will have to accept very high levels of unemployment for several years.
The latest statistics for the Egalitarian economy confirm that price inflation remains unacceptably high
at 5% per annum. This is attributed partly to the continued strength of unions and also increases in
indirect taxation implemented six months ago.
The government of Egalitarian has responded to these economic problems with a package of measures
announced by the Finance Minister. Grants will be made available to encourage businesses to develop
redundant industrial sites. Direct taxes on individuals and companies will be increased. The central bank
will increase the base interest rate by 1.5%.
Task 1: 1 Mark
Tick the correct type of unemployment Egalitarian is facing:
A. Seasonal Unemployment
B. Structural Unemployment
C. Cyclical Unemployment
D. Frictional Unemployment
Task 2: 1 Mark
Choose the type of tax that would have contributed to the high level of inflation in Egalitaria.
A. Sales Tax
B. Capital Tax
C. Income Tax
D. Inheritance tax
Task 3: 2 Marks
Indicate whether the government policy measures are examples of fiscal policy or monetary policy.
Fiscal policy Monetary policy
Increase in interest rates
Government grants and direct tax increases
Question#48:
XYZ Co manufactures plastic boxes. It employs 120 people and is managed in the following way.
Operational staff are employed because of their specialist skills and for the application of these skills
they are answerable to a specialist training manager. They are allocated to particular manufacturing
teams working on different types of boxes. Each type of box has a different manager who manages its
production. In the course of a working week an individual employee can work on the manufacture of
more than one type of box.
Task 1: 2 Marks
Which type of the following organizational structures is described for XYZ in the statement above?
A. Geographical
B. Functional
C. Divisional
D. Matrix

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Task 2: 2 Marks
Which organizational structure does each of the following disadvantages relate to?
Matrix Functional Geographic Divisional
Duplication of effort
Vertical barriers
Question#49:
The roles of internal and external auditors are quite different in scope, purpose and accountability.
Task 1: 3 Marks
Are the following applicable to the internal auditor, the external auditors, or both?
Internal auditor External auditor Both
Discharge their duties independently
May be remunerated as employees
Address the shareholders at the annual general meeting
Primarily responsible to the audit committee
Must be licensed or members of a recognized supervisory body
Responsible for control systems in the organisation
Task 2: 1 Mark
Select which of the job specifications below contains the primary responsibility of an external auditor.
A. Job Specification A (Prevent or detect fraud)
B. Job Specification B (Express a professional opinion on the financial statements)
C. Job Specification C (Validate all transactions of the company)
Question#50:
The following four individuals are members of a team working in the accounts department at ABC Co.
Jabez is highly committed to the company, having joined as a trainee straight from school. He is hard
working and dutiful, and though not naturally comfortable when discussing new ideas, he exercises a
great deal of common sense, especially with practical problems.
Melody has been described by her boss as intellectual and individualistic, demonstrating an ability to
absorb knowledge. She is considered to be rather unorthodox by her colleagues, and quite often
appears to be rather detached from group discussions that are taking place.
Guna is orderly, logical and conscientious and can be relied upon to follow through all of the tasks
assigned to him. His colleagues are sometimes dismayed that he will not be content until every detail
has been attended to.
Agnetha is the extrovert in the team, with good social skills and a flair for communication. She is
enthusiastic about her work but once she has explored an idea, she rapidly loses interest.
In relation to Belbin's team roles theory, identify the role that typifies each individual's personal
attributes or if none of the individuals are typified by the role.
Jabez Melody Guna Agnetha None of the individuals
Team worker
Shaper
Implementer/ (Company worker)
Monitor-evaluator
Coordinator/(Chairman)
Resource investigator
Plant
Completer-finisher

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Question#51:
The following diagram is a basic communication model.
Task 1: 2 Marks
At which of the following TWO points in the diagram will words, symbols and gestures occur?

Task 2: 2 Marks
Is each of the following a recognized way of overcoming barriers to communication?
Yes No
Taking the receiver's culture into consideration
Using gestures to support the spoken word
Using technical and complex language
Categorizing the receiver according to social class
Question#52:
Ferenc is a trainee manager in the marketing department of KLB Company. He recently discovered that
Francine, a colleague with whom he works on a regular basis, had supported her application for her
current position as KLB Company by claiming to hold a degree awarded by an overseas university
purchased as an 'off the shelf' qualification and which required no study at all. She had told the
interviewers that she had studied for four years on a full time basis for the degree. Since joining the
company, Francine has impressed her managers with her positive attitude and her ability to generate
creative ideas.
Ferenc was not sure whether it would be right to report Francine's deception to the company. He
decided to discuss the matter in confidence with his four flat mates.
Gerard believed that Ferenc should do nothing, as reporting it would almost certainly lead to Francine
losing her job. He felt that although Francine acted unethically, she was well regarded by her managers
and being dismissed would deprive the company of an excellent worker.
Hans reminded Ferenc that as he was studying for his professional examinations, his membership of a
professional body required him to act with the highest standards of integrity, and it would be wrong to
keep silent on the matter. Hans felt that Ferenc had a moral obligation to inform his manager
immediately of the situation.
Iain said that he considered Francine to be fortunate not to be discovered and that the truth would be
found out eventually. This could lead to Francine and anybody who knew about the situation, but failing
to disclose it, running the risk of losing their jobs.
Jane felt that Ferenc should report Francine to the company, as all employees owe a duty of good faith
to the organisation and that whistle blowing was now considered the right thing to do.

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Task 1: 2 Marks
For each of Ferenc's colleagues, select whether their views reflect a deontological approach to what
he should do.
Deontological Teleological
Gerard
Hans
Iain
Jane
Task 2: 2 Marks
Ethical conduct within an organisation depends on individuals demonstrating the fundamental principles
of ethics and embracing organizational values which promote ethical behavior.
Which TWO of the following are fundamental principles set out in the ACCA Code of Ethics?
A. Trust
B. Objectivity
C. Accountability
D. Openness
E. Respect
F. Confidentiality
End Paper
(!) Best of Luck (!)

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