2019

ACCOUNTANT
IN BUSINESS
SIR USMAN RAHAT

[MOCK EXAM 01]

F1 Accountant in Business MOCK

Name
Batch Teacher:
Date
Marks

1. 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
1. B. All these groups have a legitimate stake in the enterprise: the government, as a regulator;
employees, as participants in the business; and environmental pressure group and local residents,
because of potential impacts.

2. 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 organizations 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. B : In a limited company, the owners (shareholders) are separate from the managers of
the concern (board of directors).

3. 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

3. D : A co-operative is a business which is owned by its workers or customers, who share
the profits. Others features include open membership, democratic control, distribution of surplus in
proportion to purchases and promotion of education.

4. Which of the following is a benefit of decentralization?

A. Decisions are made at one place in the organization
B. Reductions in bureaucracy
C. Better crisis management
D. Improves the motivation of junior managers
4. D: The correct answer is: Improves the motivation of junior managers. While the other options
may arise in a decentralised organisation, they are not necessarily features that are specifically
associated with decentralisation.

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5. A narrow span of control would be suitable where

A The team is not dispersed across a wide area
B The work is of a routine nature
C There is little similarity between team members' work
D The team is very experienced
5. C: The correct answer: There is little similarity between team members' work.
Where there is little similarity in work, subordinates will not be able to help each other, and will
rely more heavily on their managers. Where the work is routine, or the team very experienced, team
members will require less support so a wider span may be appropriate. the wider the geographical
dispersion, the narrower the span.

6. Who proposed a theory of motivation based on meeting basic human needs?

A. Maslow
B. McGregor
C. Mintzbarg

6. Maslow

7. Many organizations are described as bureaucratic. When the team, was first coined, bureaucracy
was regarded as being highly efficient and there are still cases where a bureaucratic approach is
appropriate. However, bureaucracy has some undesirable features.
Can you identify three from the list below?
(i) It relies on the expertise of its members – not through standardized skills but by the importance of
the mix of skills
(ii) Committees and reports slow down the decision-making process
(iii) Innovation is difficult
(iv) Over-prescriptive rules produce a simplistic approach to problems

A (i), (ii) and (iii)

B (i), (iii) and (iv)
C (ii), (iii) and (iv)
D (i), (ii) and (iv)
6. C: The correct answers are: Committees and reports slow down the decision-making process.
Innovation is difficult; over prescriptive rules produce a simplistic approach to problems.

8. When should performance related pay be paid?

A. On meeting agreed targets
B. On appointment to position
C. On completion of probationary period
D. On promotion to a higher grade
8. On meeting agreed targets

9. For what is a local area network used?

A. Communication between Computers within a limited geographical domain
B. Communication between a Company and its, stakeholders
C. Communication between local trade associations
D. Communication between divisions or departments Of a group of companies
9. Communication between Computers within a limited geographical domain

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10. An organisation expects to undertake numerous different projects Project groups will be set
up. Drawn from the various departments and then disbanded once the projects completed.
What type of organisational structure is this?
A. Departmental
B. Matrix
C. Functional
10. B: Matrix

11. An organisation is split into five different departments. production, finance, marketing,
research and stores Which of the following describes this organisational structure?
A. Matrix
B. Geographical,
C. Entrepreneurial
D. Functional
11. D: functional

12. Which of the following statements about the impact of technological developments is not true?
A. Technology developments have supported corporate delayering
B Technology developments tend to adversely affect employee relations
C Technology developments creates risk for long-range product/market planning
D Technology developments offer significant advantages for corporate communications
12. B: Technology is no longer regarded purely as a threat to job security: it can also support higher-
level skilling, options for home-working, cleaner and safer work environments, better employee
communications (eg through an intranet) and so on.

13. What is the latest stage at which a new recruit to a company should first be issued with a copy of
the company's health and safety policy statement?
A On accepting the position with the company B As early as possible after employment
C After the first few weeks of employment D During the final selection interview
13.B :Examiner's comments: The examiner commented that only 20% of students chose the correct
option. Options A and D are incorrect because there is no certainty that the job will be offered or
accepted. Option C is incorrect because waiting a few weeks leaves the employee open to risks in those
weeks.

14. Which of the following would be identified as a cultural trend?

A Health and safety legislation B Concern with health and diet
C Increasing age of the population
14 B : Option A may reflect a cultural trend (increasing expectation of quality of working life, say), but
it is a compliance issue. Option C is a demographic trend

15. Which of the following statements about an organization chart is not true?
A. An organization chart provides a summary of the structure of a business.
B. An organization chart can improve internal communications within a business.
C. An organization chart can improve employees' understanding of their role in a business.
D. An organization chart can indicate functional authority but not line authority within a business.
15 D : Line authority can easily be shown on the organisation chart.

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16. Which of the following statements is/are true?

(i) An informal organization exists within every formal organization
(ii) The objectives of the informal organization are broadly the same as those of the formal
organization
(iii) A strong, close-knit informal organization is desirable within the formal organization

A. Statement (i) only B Statements (i) and (iii) only

C. Statements (ii) and (iii) only D Statement (iii) only

16 A : Statement (i) is true. Statement (ii) is not, because the informal organisation has its own agenda.
Statement (iii) is not, because a strong informal organisation with its own agenda can undermine the
formal organisation: create damaging rumours, safety/quality shortcuts, distractions from task goals
etc.

17. BZ Ness Ltd is an organization with a strongly traditional outlook. It is structured and managed
according to classical principles: specialization, the scalar chain of command, unity of command and
direction. Personnel tend to focus on their own distinct tasks, which are strictly defined and
directed. Communication is vertical, rather than lateral. Discipline is much prized and enshrined in
the rule book of the company. From the scenario, what sort of culture does BZ Ness Ltd have, using
Harrison's classifications?

A Role culture B Task culture C Existential culture D Power culture

17. A : The role culture is a bureaucratic or mechanistic culture, as described in the scenario. Task
culture is project-focused; existential culture is person-focused; and power culture is leader focused.

18. The research and development (R & D) function of a business:

(i) Is primarily concerned with market research
(ii) Can improve existing products as well as developing completely new products
(iii) Has been less important for firms manufacturing computers to meet an industry standard than for
those firms developing the next generation of computers
(iv) Is always undertaken under contract by specialist external consultancies
Which of the above statements are correct?
A (i) and (ii) only ` B (ii) and (iii) only
C (i), (iii) and (iv) only D (ii) and (iv) only
18. B : R & D tends to be concerned with product research (not market research), and many
organisations have internal R & D functions.

19. Managers Jill and Paul are talking about how to resolve a business problem. Jill suggests that a
committee should be formed to discuss the issues. Paul argues that committees are:
(i) Time-consuming and expensive (ii) They invite a compromise instead of a clear-cut decision
Which of these statements is true?
A Both (i) and (ii) B (i) only C (ii) only D. Neither statement is true
19. A : Time, expense and compromise decisions are some of the disadvantages of a
committee so Paul is correct. There are, however, many advantages to committees as well.

20. Monica is a manager in the finance department of P Co and she has several staff working for her.
She has become quite friendly with most of her staff and they like her and appreciate that she does
everything she can to attend to their needs. Which type of managerial style does Monica have?
A. Impoverished B Task management C Country club D Dampened pendulum
20. C : The 'country club' is low-task, high-people focus and 1.9 on Blake and Mouton's
managerial grid. This describes Monica. Impoverished is 1.1 (both low), task management is 9.1
(all about the task), and dampened pendulum is 5.5 (swinging between the two extremes).
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21. According to Fielder, which of the following are true of psychologically distant managers?
1 They judge their staff on the basis of performance
2 They are primarily task-oriented
3 They prefer formal consultation methods rather than seeking staff opinions
4 They are closer to their staff

A 1 and 2 B 2 and 3 C 1, 2 and 3 D 1, 2, 3 and 4

21. C: Psychologically distant managers (PDMs) maintain distance from their subordinates and they
prefer formal procedures rather than informal ones, for example, a formal consultation method.

22. Which of the following is an 'interpersonal' role of management, in Mintzberg's classification of

nine managerial roles?
A Spokesperson B Figurehead C Negotiator D Resource allocator
22. B: Interpersonal roles are based on the manager's formal authority: they include the roles of
figurehead, leader and liaison. Informational roles are based on the manager's position in internal and
external information networks: they include monitor, spokesperson and disseminator. Decisional roles
relate to the work of the manager's department: entrepreneur, disturbance handler, resource allocator
and negotiator.

23. Which of the following is most clearly a sign of an ineffective group?

A There is disagreement and criticism within the group
B There is competition with other groups
C Members passively accept work decisions
D Individuals achieve their own targets
23. C: Members of an effectively functioning group will take an active interest (as opposed to option C)
in decisions affecting their work. Option A is healthy, particularly in avoiding problems that occur when
groups seek consensus at all costs (eg 'group think'). Option B is healthy, as it unites and stimulates the
group. Option D can be a sign that the group is supporting the performance of its members – not just
that they are focusing on their own performance at the expense of the group.

24. For which of the following applications is team working not best suited?
A. Ideas generation for innovation
B Co-ordination of different functions
C Crisis decision-making
D Co-ordination of geographically dispersed workers
24. C: Teams are not the best vehicle for crisis decision-making, because group decision making takes
longer, and decisions may protect the team at the expense of the right (possible tough) solution. Teams
are, however, great for decision-making where the hearing of different viewpoints is beneficial. They
are also great for ideas generation (think of group brainstorming)and coordination (teams are often
cross-functional). You might have hesitated over option D, butit is important to realise that distance is
now no obstacle to team working (think of virtual teams,connected by IT and communications links).

25. Grant is a member of a project team. His colleagues in the team rely on him to read and check
complex project documentation. Grant has a keen eye for detail and often identifies minor details in
documents that others miss but may be of significance. Despite the diligent approach, Grant always
meets his deadlines. However, some of Grant's colleagues feel frustrated when he refuses to involve
others. He can hold up progress as he will not agree to the team signing off project documents until all
of his concerns
are fully discussed.
According to Belbin's team roles theory, Grant is an example of which of the following?
A Implementer B Completer – finisher C Monitor – evaluator D Shaper
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25. B Examiner's comments: The examiner commented that only 33% of the students chose the
correct answer. They key words in the question were 'keen eye for detail', 'always meets
deadlines' and 'reluctant to involve others'. These phrases are typical characteristics of a
completer-finisher.

26. An organization has set up a team in which any member of the team can perform the full range of
its tasks. The manager is able to share out tasks between members according to who is available to do
a given job when it is required.
What sort of team organization does this describe?
A Multi-disciplinary team B Multi-skilled team
C Self-managed team D Virtual team
26. B: A multi-skilled team is one which brings together versatile individuals who can
perform any of the group's tasks. Multi-disciplinary (or multi-functional) teams bring together
individuals with different skills and specialisms, so that their skills can be pooled or exchanged. Self-
managed teams are given discretion to plan their own task sharing and work methods, within defined
task objectives: there is no suggestion that this is the case here. A virtual team is a geographically
dispersed team, connected by information and communication technology (ICT) links.

27. Keepham (Hungary) Co offers its employees:

(i) Sensible company policies (ii) Good salaries and bonuses
(iii) Considerate supervision (iv) Training programmes
According to Herzberg's two-factor theory, which of these things will satisfy employees in such a way
as to motivate them to superior effort in the long-term?
A (ii) only B (iv) only
C (ii) and (iv) only D (i), (ii), (iii) and (iv)
27. B: In Herzberg's theory, only training is a 'motivator factor'. The others are all 'hygiene'factors: if
they are inadequate, employees will be dissatisfied, but even if they are got right, they will not provide
lasting satisfaction or motivation. Herzberg argued that satisfaction comes only from the job.

28.Willy Dewitt-Ornott works in Sales. There is always a sales competition at the year end and the
winner is likely to be made team leader. Willy's quite certain that he will be able to win and that he
will have more responsibility, which he would like. But he would also have to work much longer
hours, and he is quite reluctant to do this for family reasons.
If an expectancy equation were used to assess Willy's motivation to work hard at the end of the
year, based on the information given, which of the following results would you expect to see?
A Valence would be high, expectancy high, motivation high
B Valence would be high, expectancy low, motivation low
C Valence would be around 0, expectancy high, motivation low
D Valence would be around 0, expectancy high, motivation high
28. C : Willy's expectancy (expectation that by working hard he will be given the team
leadership) is high, but valence (importance to Willy of becoming a team leader) is neutral,
because he has both positive and negative feelings about it. Since Motivation = E × V, if V is 0,
motivation is also 0.

29. All of the following, with one exception, are alternative terms for the same
Participation can motivate employees by making them take 'ownership' of the task and increasing
their commitment. In which of the following circumstances, however, would this not happen?
A. Participation is genuine
B. The purpose of participation is made clear
C. Everyone is allowed to participate equally
D. Efforts at participation are maintained for a reasonable period

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29. C : Participation will only work if the individual has the ability and information to
participate effectively (the principle of 'capacity'): otherwise, they will feel frustrated and under
pressure. You may have hesitated over option D, but this is necessary for people to take
participation seriously (the principle of 'consistency').

30.Application of process theories to motivation in practice involves all but one of the following
measures.
Which is the exception?
A Clarifying intended results B Giving feedback on actual results
C Immediacy of reward following results D Consistency of reward for results
30. C : Options A, B and D are essential for an individual to work out how much effort will be
required, and whether it will be worth it for the rewards expected (due to consistency) to be
available. However, 'immediacy' is not necessarily required: people may have a high tolerance for
'delayed gratification', and be willing to wait for rewards as long as they have a reasonable
expectation that they will eventually accrue. (As a student, for example, you may be working
sacrificially hard now, in order to gain qualifications that will benefit your career in several years' time.)

31. The following, with one exception, are claimed as advantages for job enrichment as a form of job
redesign.
Which is the exception?
A It increases job satisfaction B It enhances quality of output
C It replaces monetary rewards D It reduces supervisory costs
31. C : Job enrichment cannot offer management a cheap way of motivating employees: even
those who want enriched jobs will expected to be rewarded with more than job satisfaction. The other
options have been found in practice to be benefits of job enrichment.

32. In Vroom's expectancy theory, what is meant by 'valence'?

A The strength of an individual's preference for a given outcome
B The strength of an individual's motivation to act in a certain way
C The strength of an individual's belief that acting in a certain way will obtain the desired outcome
32. A : Option A is valence (V). Option C refers to 'expectancy' (E). Option B is 'force of
motivation (F): the product of valence and expectancy. Hence the equation: F = V × E.

33. Belbin’s described the most effective character mix in a team. This involves eight necessary roles,
which should ideally be balanced and spread in a team.
A person who is highly strung, extrovert and passionate about the task fits into which of Belbin's
roles?
(i) Plant (ii) Completer Finisher (iii) Resource investigator (iv) Shaper
A (i), (ii) and (iii) B (ii), (iii) and (iv)
C (i), (ii) and (iv) D (i), (iii) and (iv)
33. D The correct answer is: Shaper.
All of Belbin's roles are important to the effective functioning of a team.
You should familiarise yourself with all nine roles.
– Plant – Shaper – Resource investigator – Monitor evaluator
– Company worker – Completer finisher – Team worker – Chairman – Specialist

34. Which of the following are positive aspects of team working?

(i) Control (ii) Work organization
(iii) Knowledge generation (iv) Decision making
A (i), (ii) and (iii) B (i) and (ii)
C (i), (ii) and (iv) D All four
34. D The correct answer is: All four.
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A team is a number of people with complementary skills who are committed to a common
purpose for which they hold themselves basically accountable. This is a control mechanism
which improves work organisation by using knowledge from a broad range of perspectives to
evaluate decision options.

35. Tuckman identified four stages in group development, which occur in a particular order. What is
the order in which the stages occur?
A Forming, storming, norming, performing
B Forming, storming, performing, norming
C Storming, norming, forming, performing
D Storming, forming, performing, normin
35. A The correct answer is: Forming, storming, norming, performing.

36.Electronic mail has so many features and advantages that it is easy to forget that there may be
limitations associated with it. Can you identify the disadvantages of email from the list below?
(i) People may not check their email regularly
(ii) Complex images do not transmit well
(iii) Requires some computer literacy to use effectively
(iv) Lack of privacy – can be forwarded without your knowledge

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

C (i), (ii) and (iv) D (i), (iii) and (iv)
36. D The correct answers are: Lack of privacy – can be forwarded on without your knowledge. People
may not check their email regularly. Requires some computer literacy to use effectively.

37. Which of the following is a correct definition of the term 'span of control'?
A The number of employees reporting to one manager
B The number of managers to whom one employee reports
C The number of levels in the hierarchy
D The number of employees at each level of the organization
37. A The number of employees reporting to one manager.

38. Who was responsible for developing the “two dimensional grid for leadership?
A Blake and Mouton B Ashridge college C Adair D Feidler
38. A: Blake & Mouton

39. Which two of the following are examples of content theories of motivation?
1 Maslow's hierarchy of needs 2 Vroom's expectancy theory
3 Herzberg's two factor theory 4 Adam's equity theory

A 1 and 2 B 2 and 4 C 2 and 3 D 1 and 3

39. D Maslow and Herzberg.

40. Phil T Luker & Son offers its employees a reward package which includes salary and company car.
Its factory is safe and clean and rather smart. The work is technically challenging and employees are
encouraged to produce innovative solutions to problems.
Which of the rewards offered by the firm is a form of intrinsic reward?
A The salary B The car C The work
40. C: Intrinsic rewards are 'part of' the work itself: extrinsic rewards are 'external' to the work itself.
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41. Which of the following is a potential problem with individual performance-related pay (PRP) as a
motivator?
A Its effect on organisational communication
B Its relevance to business objectives
C The fact that it does not relate to individuals' wage or salary grades
D Its effect on team motivation
41. D : Team members may work for individual rewards, rather than contributing to the
group, especially since there is a problem offering rewards for less measurable criteria such as
team-work. Option A is clearly a benefit. Option B is a benefit of PRP because it relates rewards
directly to business objectives. You may have hesitated over option C but this is a benefit because PRP is
a way of rewarding employees when there is no other way to do so (eg because they have reached the
top of the salary/wage range their position is eligible for).

42. Which THREE of the following statements reflect the activities of an NGO?
A. They have targets for customer satisfaction
B. They are almost always charities
C. They are aimed at promoting social, political or environmental change
D. They often raise funds through donations
E. They are legally constituted organisations with commercial aims
F. They are measured in terms of effectiveness and efficiency
42. C, D and F :The description 'NGO' generally applies to groups whose primary aim is not a
commercial one, aimed at promoting social, political or environmental change. NGOs are not
necessarily charities, although they tend to raise funds through donations. They are measured in
terms of effectiveness and efficiency, rather than customer satisfaction or profit targets.

43. Information and data are items potentially at risk of security breaches.
Which TWO Of the following are basic principles of data security?
A. Passwords should be kept confidential
B. Passwords should be used
C. Passwords Should be written down
D. 43. A&B: Passwords should be kept confidential & Passwords should be used

44. GHJ Co is a manufacturing company that makes one product. The production process is labor
intensive and as a result the product is highly specialized. GHJ Co also provides its customers with
maintenance and after sales service.

Department W uses materials and labor to produce the final product.

Department X stores the final product and delivers it to customers.
Department Y is in charge of advertising and promotion of the final product.
Department Z is responsible for providing spare parts to customers.
The following are all primary activities from Porter's value chain
A Operations B After sales service
C Outbound logistics D Marketing and sales
For each of the departments, select the corresponding primary activity listed above
(i) Department W ______________________
(ii) Department X ______________________
(iii) Department Y ______________________
(iv) Department Z ______________________
44. (i) A (ii) C (iii) D (iv) B

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44. The term secondary stakeholders describes which group of stakeholders?

A Stakeholders who conduct transactions with the organisation
B Stakeholders who have a contractual relationship with the organisation
C Stakeholders who do not have a contractual relationship with the organization
45. C : Secondary stakeholders are stakeholders who do not have a contractual relationship
with the organisation. Primary stakeholders are stakeholders who do have a contractual
relationship with the organisation.

45. What term is given, in motivation theory, to the things people value and choose to pursue?
A Goals B Innate needs C Satisfaction
46. A : Goals are things people choose to pursue: each individual will have their own goals,
which may vary with time, circumstances and other factors. The idea of innate (in-born,
instinctive) needs is that they are biological or psychological imperatives, common to all people.
(This is what makes it possible to have need theories with discussion of only a few innate needs.)
Satisfaction arises when a goal is achieved.

46. The five core dimensions which contribute to job satisfaction are skill variety, task identity, task
significance, ........................................ and feedback.
Which of the following is the dimension missing from the above list?
A Recognition B Advancement C Autonomy D Rewards
46. A : Goals are things people choose to pursue: each individual will have their own goals,
which may vary with time, circumstances and other factors. The idea of innate (in-born,
instinctive) needs is that they are biological or psychological imperatives, common to all people.
(This is what makes it possible to have need theories with discussion of only a few innate needs.)
Satisfaction arises when a goal is achieved.

47. In which of the following areas related to marketing would accountants be involved?
1. Determining whether proposed price generates Sufficient profit
2. Monitoring the marketing expenditure
3. Deciding, on the marketing mix
4. Segmentation Of markets and customers

A. 2 and 4 only
B. 1 and 2 only
C. All Of the above
D. 1 and 3 only
47. C : Autonomy is a degree of freedom or discretion in the job: the removal of restrictive
controls.

48. According to Belbin's team roles theory, which of the following describes the task role of the
co-ordinator?

A. Clarifies and synthesises various ideas in an effort to tie together the work of the members
B. Proposes goals, Suggests ways of approaching tasks and recommends procedures for
approaching a problem or task
C. Tries to assert control and manipulates the group through given orders Or interrupting
others
D. Summarises, points to departures from goals raises questions about direction.

48. A. Clarifies and synthesises various ideas in an effort to tie together the work of the members

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49. When organizations require a major change in structure and/or culture how would the change be
described?
A. Transitional B. Transformational
49. B. Transformational

50. Which two of the following are the hygiene factors according to Herzberg?
A. Responsibility
B. salary
C. rewards
D. working condition
50. B. salary & D. working condition

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