ACCA F1 Mock Exam FREE PakAccountants Com PDF

CHAPTER
1 Understanding the role of Accounting in Business
Mock
ACCA F1 Exam
FIA FAB
By:
Hasaan Fazal
Accountant in
Business
UPDATED FOR
2014-15
COPYRIGHT ©2011 – ACCA LIVE | Most affordable online classes for CAT and ACCA
EXAMS Page | 1
CHAPTER
1 Understanding the role of Accounting in Business
ACCA F1 Mock
Exam
FIA FAB
Accountant in
Business
COPYRIGHT ©2011 – ACCA LIVE | Most affordable online classes for CAT and ACCA
Page | 2
Mock ACCA F1 / FIA FAB 50
Exam Accountant in Business Questions
1
An organization is a meaningful group of people working together to achieve ____________ goals
A. Individual
B. Personal
C. Social
D. Common
2
Job specialization is the resultant of:
A. Centralization
B. Delegation
C. Work division
D. Synergy
3
Division of labour increases:
A. Responsibility
B. Productivity
C. Divisibility
D. All of the above
4
The concept of division of labour was proposed by
A. Adam smith
B. Fredrick Taylor
C. Mintzberg
D. Webber
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5
Public sector organization refers to organizations owned by:
A. General public
B. Government
C. Public at large
D. All of the above
6
Wide span of control means:
A. Long chain of command

B. Short chain of command
C. More layers of management
D. None of the above
7
Span of control and chain of command has _______________ with each other
A. Direct relation
B. Congruent relation
C. Inverse relation
D. No clear relation
8
Setting the direction of the organization is the responsibility of:
A. Shareholders
B. Directors
C. Brokers
D. Stakeholders
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9
If we relate Mintzberg Five components of organization’s structure with Anthony’s managerial layers then
Operational management under Anthony’s theory is equivalent to _______________ in Mintzberg theory
A. Strategic apex
B. Technostructure
C. Middle line
D. Operating core
10
Which of the following phenomena is the result of advancement in IT?
A. Wider span of control

B. Delayering
C. Reducing need of middle managers
D. All of the above
11
Which of the following organizational structures will have greater centralization?
A. Functional structure
B. Divisional structure
C. Team structure
D. Matrix structure
12
Which of the following are the users of financial statements?
A. Government
B. Financial analysts
C. Consumers
D. All of the above
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13
Who is primarily responsible for managing/preventing FRAUD?
A. Internal auditors
B. Management
C. Those charged with governance
D. Shareholders
14
Arrange the following needs in the correct order starting from the higest level need under Maslow's needs
hierarchy theory:
 Belonging
 Physical
 Security
 Self Actualization
 Self Esteem
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15
Arrange the following in correct order starting from top most rank in the list at first place
 Employee
 Continental director
 Section manager
 Functional manager
 Country director
 Supervisor
 Regional director
16
Tick the statement(s) which is (are) TRUE in relation to internal audit?
 Internal audit department is not connected with the executive functions of entity
 Internal auditor usually reports to non-executive directors or those charged with governance
 Internal audit department monitors the decisions taken by the management
 None of the above
17
Minutes of meeting means the number of minutes for which meeting will be held
 True
 False
18
An organisational Information System (IS) can be a hybrid of computer based and manual based information
system
 True
 False
19
Salaries paid to the staff of accounting department are accounted for as:
A. Selling cost
B. Administrative cost
C. Financial cost
D. Audit fee
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20
Which of the following help us govern the organization better?
i. Code of ethics
ii. Accounting standards
iii. Laws regulating the operations of organization (e.g. appointment of auditor)
A. I only
B. I and III only
C. II only
D. I, II and III only
21
“Businesses do not have responsibilities, only people have responsibilities”. Milton gave this argument to mean:
A. Mangers responsibilities towards owners

B. Owners responsibilities towards managers
C. Employees responsibilities towards organization
D. Managers responsibilities towards general public
22
To control Dengue disease local government has instructed to preserve clean water in a way that mosquitos
don’t have access to it as it is considered that dengue mosquito lay eggs in clean water.
Quality control department of Tescon Engineering has hundreds of water tanks at different construction sights.
These are quite large in numbers therefore it is decided that steps will be taken only if any government official
visit the site.
Which social responsibility strategy is Tescon following:
A. Accommodating
B. Defensive
C. Reactive
D. Proactive
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23
In recent years large number of highly skilled individuals especially doctors left Pakistan for good as they were
protesting for increase in their compensations and were not willing to settle for less monthly salaries. This
rendered significant majority of doctors unemployed.
What type of unemployment is this?
A. Structural unemployment
B. Cyclical unemployment
C. Frictional unemployment
D. Classical unemployment
24
Government of Banana republic wants to abolish unemployment in the country. They came up with a plan that
will achieve this objective. However, this policy is facing criticism as it will cause increase in inflation.
Is this criticism correct keeping other variables constant?
A. Yes
B. No
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25
Ad valorem tax is a type charge placed by government on the price of the product which is:
A. Fixed amount of tax per unit

B. Fixed percentage of amount specified by tax authorities
C. Fixed percentage of price of product
D. Fixed amount of percentage on individual’s income
26
“Poor are poor because they spend more than earned whereas rich are rich because they spend less than
earned and thus high percentage of tax should be applied for poor and less percentage of tax rich”
This will result in the retrograde approach of which type of taxation?
A. Progressive
B. Proportional
C. Regressive
27
Sales tax is an example of:
A. Progressive tax
B. Proportional tax
C. Regressive tax
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28
Applying more direct taxes and encouraging citizens to save money will help fight:
A. Cost push inflation

B. Demand pull inflation
C. Deflation
D. Hyper deflation
29
Independent auditor’s report is addressed to:
A. Management
B. General public
C. Stakeholders
D. Shareholders
30
Internal auditor reports to:
A. Customers
B. General public
C. Shareholders
D. Audit committee
31
Internal auditor’s job is the ensure that:
A. Management has achieved value for money

B. Internal control system is working appropriately
C. Management is working in the best interest of shareholders
D. All of the above
32
For entities it is mandatory to follow the requirements of applicable accounting standards and related
regulations. However, under extremely rare circumstances to prepare relevant and reliable financial statements
entities are allowed to deviate from such requirements. This relaxation is called:
A. Regulation retrograde
B. Legal suspension
C. True and fair over ride
D. Allowed alternative
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33
Which of the following are connected stakeholders
A. Managers
B. Employees
C. Suppliers
D. Internal auditor
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34
While entering email address in an online form if you forgot to mention “@” or address does not follow a specific
syntax then error message is displayed notifying you to check the email address.
This control is an example of:
A. Detection controls
B. Correction controls
C. Prevention controls
D. Formation controls
35
Securities and Exchange Commission of the country requires every company to retain its records for a period of
5 years from the period to which they relate.
This is an example of:
A. Data Backup
B. Data Archiving
C. Data storage
D. Data restoration
36
Teeming and lading is a famous method to misappropriate:
A. Prepayments
B. Inventory
C. Cash
D. Liabilities
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37
Which of the following controls will help eradicate collusion with customer frauds?
A. Prepare control accounts

B. Sales and dispatch departments are separate
C. Prepare bank reconciliations
D. Get signatures from customer on goods dispatch note
38
Management is answerable to:
A. Shareholders
B. Government
C. Courts
D. All of the above
39
Job enlargement is an example of hygiene factor
A. True
B. False
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40
A company has recently started its operations in a far off village. Labour is skilled however, they often get stuck
executing their task and sometime take longer than usual time to finish the task. Which of the following can help
them achieve better performance?
A. Coaching
B. Mentoring
C. Counseling
D. Meeting
41
The chain communication pattern results in slow transmission of information as compared to wheel pattern
A. True
B. False
42
If the two parties having a communication have opposing personalities than this can result in:
A. Psychological noise
B. Social noise
C. Logical noise
D. Peer noise
43
An assistant has prepared a presentation for board meeting to visualize performance of ongoing projects.
However, he has used too many pictures tables and pictures thus it is not easy to understand the situation
easily. His supervisor has asked him to improve the presentation.
What area of communication is he asked to improve?
A. Medium
B. Channel
C. Feedback
D. Encoding
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Section B
1
Label the following diagram
2(a)
Which of the following measures help reduce inflation in the economy?
i. Apply direct and indirect taxes

ii. Levy duties on imported products
iii. Cut down government spending
iv. Depreciate currency value
A. IV only
B. II and III only
C. I, II and III only
D. I and III only
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2(b)
Government of Banana republic wants to abolish unemployment in the country. They came up with a plan that
will achieve this objective. However, this policy is facing criticism as it will cause increase in inflation.
Which of the following is a suitable measure to convince the opposition?
i. Increase direct tax rates

ii. Increase indirect tax rates
iii. Increase savings rates
A. I only
B. I and II only
C. I, II and III only
D. III only
3(a)
Which of the following is NOT the duty of sales manager?
i. Recover debts from customers

ii. Settle trade discounts
iii. Ensure price is competitive
A. I and II only
B. II only
C. I only
D. II and III only
3(b)
Which of the following is in correct order?
i. Tender notice > quotations > purchase order

ii. Credit note > Invoice > cash receipt
iii. Purchase ledger > Purchase journal > Invoice
A. I only
B. II only
C. II and III only
D. III only
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4(a)
Risk of teeming and lading increase if:
i. There are no credit sales

ii. Person receiving cash is also responsible to record sales
iii. Bank reconciliations are routinely done
A. I only
B. II only
C. II and III only
D. I, II and III
4(b)
A company has recently introduced a scheme in which employees are paid according to their performance. If a
certain level of performance is achieved employees are promised for increased incentives.
However, after few months it is observed that even after the incentive scheme is announced there is no
significant betterment in employees’ performance. What can be the reason?
A. Employees don’t find incentives to be too great to put an extra effort

B. Performance evaluation criteria is too strict
C. Other companies in the same industry are paying better incentives for same amount of work
D. All of the above
5
Fill the following blanks using appropriate choices from below:
_______________ learns through working
_______________ learns through observing and through others’ experience
_______________ learns through understanding facts, workflow, models and system
_______________ learns through testing the information they already have
A. Theorist
B. Pragmatist
C. Activist
D. Reflector
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6
Fraud is a deliberate attempt to misstate financial information to gain unfair advantage or benefit. Though the
risk cannot be completely eliminated however, it can be reduced if appropriate control actions are taken.
Which of the following can help reduce the fraud risk?
1. Training
2. Segregation of duties
3. Job rotation
4. Knowledge and competency
A. 1 and 2
B. 2 only
C. 1, 2 and 3 only
D. All 4 mentioned
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CHAPTER

1 Understanding the role of Accounting in Business

A. Long chain of command

A. Wider span of control

A. Mangers responsibilities towards owners

Which social responsibility strategy is Tescon following:

What type of unemployment is this?

Is this criticism correct keeping other variables constant?

A. Fixed amount of tax per unit

This will result in the retrograde approach of which type of taxation?

A. Cost push inflation

A. Management has achieved value for money

This control is an example of:

This is an example of:

A. Prepare control accounts

What area of communication is he asked to improve?

i. Apply direct and indirect taxes

Which of the following is a suitable measure to convince the opposition?

i. Increase direct tax rates

i. Recover debts from customers

i. Tender notice > quotations > purchase order

i. There are no credit sales

A. Employees don’t find incentives to be too great to put an extra effort

_______________ learns through working

_______________ learns through observing and through others’ experience

_______________ learns through understanding facts, workflow, models and system

_______________ learns through testing the information they already have

Which of the following can help reduce the fraud risk?

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