29082016 Howto answer mutiple-chalce questons | ACCA Global indian schoo! ‘The global body for professional accountants Aboutus Contact us Work for us pXeleY Think Ahead Search| Mv.AccA HOW TO ANSWER MULTIPLE-CHOICE QUESTIONS RELATED LINKS ‘Student Accountant hub ‘Answering multiple-choice questions (MCQs) successfully requires you to develop a range of skills and exam techniques. Taking a few simple steps will help you to maximise your marks in these papers. < PREPARE TO PASS. ‘As with any assessment, the golden rule fr success is to prepare thorough. ts not unusual for ACCA ‘examiner reports to note that some candidates were not adequately prepared for the exam. In mary ‘cases, candidates attempt to compensate for inadequate preparation by “question spotting’, oF ‘coneenating on a small rumber of ‘pet topics. These approaches to preparation are extremely risky and are always strongly discouraged by examiners for ood reason. ‘As each MCQ relates toa specific issue within the syllabus, each exam wil include broad coverage ofthe ‘sylabus. This means thal to maximise your chances of success you must have studied the whole syllabus. ‘You may be icky enough to find that a particular MCQ ison a topic that was part of our most recent ‘studies, but this will not be the case withthe vast majoiy of the questions you wl face. As well as ‘studying topies right across the syllabus, its important o attempt past exams and exer standard questions, Examples of MCs are avallable on ACCAYS website together wth specimen papers. ‘Of cours, itis essential that you use allo the questions carefully and follow up on al of your answers. ‘Whether @ question was answered correctly or incorrectly during exam preparation, it wll prove an ‘opportunity to enhance your understanding ofthe topic. By reflecting on why a specific option is corect, yu can improve your understanding, wile refiecting on why the other options are wrong can help to ‘overcome misunderstanding and elminate contusion. When attempting questions as part of your npshwww aecaglobal comighlenistatertioxam-supprtresourcesfundimertals-exame-stuy resources! itectnical-arileshw-toanswer-mulisle-choice-q... 1529082016 Howto answer mutiple-chalce questons | ACCA Global preparation, ils useful to remember thatthe key purpose of the exorcise is to enhance your understanding — not just to get the right answer ‘When reviewing each option tls Important to ensure that you understand exactly what the underlying point is and to make sure thal you reflect an this to enhance your learning READ THE QUESTION ‘The amourt of tie, effort, and discussion that is put into each question before it appears in an exam is kel o surprise most candidates. Every question is subjected to @ numberof rigorous reviews as it progresses from an idea inthe writer's mind tothe exam paper. These reviews moan that you nead to read the question extremely carefull, remembering that the wording has been chosen delberatoly. This is intended to ensure thatthe question is unambiguous and does not mislead candidates. ‘An example ofthe need to read the question carefully might be the way in which a question ‘communicates cost information. iis not unusual fr a question to relate toa production period of, say three months, but for fxed costs to be stated as an annual figure. To get the correc answer, candidates must have recognised this fact. This is not an attempt to catch out candidates, but rather an attempt to ‘ensure that candidates can apply the technique ina real-life situation, where information must be clearly understood and is frequently communicated in this way ‘Aurther aspect isto recognise tha the answer wil be based onthe data inchided inthe question. There are two aspects to this. Fist, in order to ensure that questions are not too long, the data may have been ‘simplified. To some candidates, this may seem to be unrealistic when compared toa real-life situation. A particular example ofthis isthe way in which the labour costs described in many questions. More often ‘than not, direc abou is deserbed as a variable cost, with no reference to the cst of laying of staf. For ‘a candidate who has exparience of stil rationalisation, this assumption will be totally uncealstc, While 2 longer question may provide the opportunity to cecaly examine the underlying assumptions, ths isnot possible in an MCQ and the question should be answered on the basis ofthe data provided. Second, only the data included in a question is required to obtain the answer. That mi wondering about addtional data, or inferring ational data into the question ns you should nat waste time ‘An example of this could be a question that test the abilty to calculate the closing balance ona ledger ‘account. The question may give deals of transactions during a period and a closing prepayment, but there may be no reference to an opening prepayment. In such cases, you can assume tha this was nil {As already note, the witer wil have sought to keep the question as short as possible by omitting unnecessary words such as the opening prepayment was ni or there was no opening prepayment [tis imperative thatthe prompt (he actual question that is to be answered) is read carefuly, For example, ‘a question may ge information on rocalvables, rrocaverable debis, and required allowances for receivables. Here, the prompt could require any of the folowing tobe calculated the movementon allowance the closing rcaiabesatbwance Rather than actualy reading and noting the prompl, some candidates assume that they know what its. This is usualy on the basis of a question they have seen previously. More often than not, his approach leads tothe wrong option being selected THINK Itis a common fallacy that MCs are easy. Ths is based on the fact that one ofthe oplions isthe correct ‘answer, Therefore, the argument goes, all You have todo fs make the correct selection, While itis fair to ‘say that some questions may be easy, that's usually because you have prepared thoroughly. Hopetuly this will happen in some questions, but iis more likely that the answer willnot be obvious. A question from the specimen papers for Paper F/FAB, Accountant in Business ilustrates this ‘SAMPLE QUESTION 1 ABC Co has a system thal records details of orders received and goods dispatched, invoices customers: ‘and allocates remittances to customers. What type of system is this? [A Management information system 8B Decision support system © Knowledge management system D Transaction processing system hnpshww aecaglobal comighlen'statertiexam-supprt-resourcesundimertals-exame-study. resources itectnical-arileshow-toanswer-mulise-choice-q... 2529082016 Howto answer mutiple-chalce questons | ACCA Global Even a casual reading of the question wll highlight tha the word ‘systom isa key word. It's used in the ‘stem (the intial statement that describes the system), the prompt (the actual question) and in each of the choioes, “This means thal unless care is taken to read the question and thnk carefully about what is being asked, it Would be easy to become confused. A furtner problem is tha all four of the systems inthe choices are ‘examples of systems that might be utised in an organisation. ‘To select the correct answer, the best approach isto consider wha each of the four systems is intended to achieve, 'A management information system i intended to provid information to managers. Information is processed data, whichis useful for making decisions. In this case, the stem refers to data (as tis unprocessed - information woule not be an inivdual order, bu the total value of orders fora particular producto from a specific customer). Therefore, is not corect, |A decision support system is intended todo exactly what the name suggests — provide information to assist managers to make decisions. Once again, the system relate to information, As we have already docided thatthe stem celers to data, B cannot be the corect answer, Choice C presents potential problem. A knowledge management system is intended to create, capture, ‘store and share information. The stem notes thatthe system ‘records details of orders’ (capture) and invoices customers (creates). This may create confusion far the i-prepared candidate, However, a well prepared cancidate vill note that, once again the issue is hat information’ is relevant toa knowledge management system, On that basis, choice C is incorrect Dis the cores choice because a transaction processing system deals with data - which is processed to create information From, this we can eee that a candidate who is clear about the diference between ‘data and ‘information’ willbe able to answer thi question without undue dificuly, but very clear thinking, and application of knowledge, is needed. Itis essential that, having read the question careful, you thik about your response, and that your “answer is the result of considered choice. This because ofthe way in which the incorrect options have been constructed. In ACCA exams, MCQs have one correct option and three incorrect options. The incorrect options are referred to as istractors'. Ths term is used because, in wring the question, the ‘examiner attempts to identify the most common mistakes made by candidates and uses these as a basis for the incorrect options. This canbe ilusrated by @ question taken from the specimen paper for Paper F2IFMA, Management Accounting. SAMPLE QUESTION2 Information relating fo two processes (F and G) was as follows: F a 5,000 59,000 s 5 7.500 35,700 Fr each process, was there an abnormal loss or an abnormal gain? A ‘Abnormal gain ‘Abnormal gain 8 Abnormal gain ‘Abnormal loss c Abnormatloss Abnormal gain Solution ach process must be considered separately. ipshwwacaglobal comighlenistateriexam-supprt-resourcesundamertals-exams-stuy-resourcesitechnical-arcleshow-o-answer-mulie-choiceq.29082016 Howto answer mutiple-chalce questons | ACCA Global Process F Normal loss is 8%, thus expected output is 92% of input. Inout was 65,000 hres. Thus, expected output was 59,800 tires. ‘Actual output was 58,900 ire. ‘As actual output was less than expected, there was an abnormal loss “That means that choices A and B are incorrect, However, a common mistake by candidates is to assume thatthe performance in bth pracesses isthe same, Making tis mistake loads to the selection of choice b. Process G ‘Normal oss is 6%, thus expected ouput s 96% of input Input was 37,500 hires. Thus, expected output was 35,625 litres. ‘Actual output was 35,700 litres. ‘As actual output was more than expected, there was an abnormal gan. “Thus, the correct choice i . ‘Another common mistake in questions such as this i to mix up the values for expected output and actual ‘output. Well ad-out workings and a logical approach can help o overcome this problem. Work out your answer {As the incorrect answars are based on comman mistakes, it flows tha alerting to guess the correct, ‘answer isnot fkely to be productive, Rather, itis essential that you use your understanding ofthe topic to \work out your answer. This wll revent you from being distracted by incorrect options. SAMPLE QUESTION 3 (taken from the specimen paper for Paper FA2) [At 30 November, Charles is owed a toalof $72,660 by his customers, His receivables allowance brought forward from tho previous year end is $11,700. He estimates that his receivables allowance should be ‘equivalent to 15% of the amounts du from customers. What value should be included inthe income statement for receivables expense forthe year to 30, November? 1A $801 debit B $10,899 debit © $801 credit D $10,899 credit Solution The receivables allowance should be equivalent to 15% of te amounts due from customers ($72,680 x 16% = $10,899), Ia candidate completes this calculation and then reviews the cholces, there isa danger that, because ‘$10,899 is included in two of the choices, one or other of those choices wil be selected. ‘This ignores the fact that the amount tobe inchided inthe income statement i the movement in the allowance — which has fallen from $11,700 to $10,898, o $801. reduction in the allowance willbe a thus, the answer is C. Credit in the income statement. ‘This ilustrates that, for questions that requir calculations, covering up the options while you work out {your answor can be a productive strategy, OF course, with questions that do not require caleuatons, the possible answers need to be considered in turn. However, this sil requires your answer tobe worked out, not randomly selected. These questions might require a decision on wich one of two or more statements are correct, or which one of number of statements is correct. In such cases, the best approach i to ‘consider each statement in turn, and decide whether or not itis correct, Once again, the fact thal incorrect ‘options are cistractors must be borne in mind ELIMINATE INCORRECT ANSWERS ‘This approach is tkely to be most effective in discursive questions that require the correct combination of ‘statoments tobe seloctod. Consider a question that ofers three statements, and requires the correct ‘combination of correct statements to be selected, The ideal way to answer this isto consider each “statement in turn, and dacide if itis corrector nat, Often, candidates wil fine that they ean quickly ident ‘one incorrect statement. On that bass, itis possible to eliminate the options that inclu that statement. ‘A question from the Paper F2, Management Accounting specimen paper lustrates this point. npshww’aecaglobal comighenistatertioxam-supprtresourcesundumertals-exame-study. resources itectnical-arileshow-toanswer-mulise-choice-q... 4/529082016 Howto answer mutiple-chalce questons | ACCA Global SAMPLE QUESTION 4 Which TWO of the fllowing statements relating to relevant cost concepts in decsion making are correc? {Maris can never have an oppor cost whereas abou an 2.The annual deprecation chara nota tevancost 5. Fed cons would nave 9 elbvant cos elements desiioncausas change terial expendire A tand3 B tandé © 2and3 D3anda Solution In this case, atte though! will confirm that stalement 1 is incorrect. Thorough preparation vill mean that you know that materials can often have an opportunity cost. Once this decision has been made, choices A and B can be eliminated, leaving ethor C or D as the coroct choice. As statement 3 is included in both of these choices, t does not need to be consdered. The question now requires a decision on whether ‘choice 2 or choice 4 is correct. Bot ofthese relate to issues in which many candidates experience dificuly. How a particular candidate wil progress from this point wll depend on the knowledge they have brought into the exam, as tis willbe ‘he basis oftheir decison regarding statements 3 and 4 Lets consider statement 3 frst The key issue is that a cos is relevant the decision leads toa future incremental cash flow. Statement 3 effectively says this inthe phrase ‘a change in their total expenditure ‘A candidate who recognises this wil hus select choice C - they are confient about ther understanding ‘of statement 3 I there is any doubt, orto provide reassurance, statement 4 can then be considered In this case, well-prepared candidates will recogrise that if materials alroady nel in inventory can be sold, using them will have @ relevant cost ~the benefit foregone by using them rather than soling them. Thus, statoment 4 is inortect and choice 3s the correct answer. (OTHER POINTS “There are some other points on which you need to make decisions in order to maximise your marks. For ‘each ofthese, the exam room isthe wrong place to make the decision tis essential thal you have prepared thoroughly and have decided on your own approach to each of the fllowing ‘Above al else, remember Mat you should ot alow youre bacome so suck on 2 questonhatyou run out oft CGaneraly speaking, exams are ead so tale sme penton sath pat ofa question isi properon fo the marks socal. With Noe however tmay be fs soracandiales ln some auesons are more seaghtrward han ter, and can Dereore be answeres mare qu Far Pal eason, may be besa lo conse he Ue allocabon {ore group of ay fve MCs, aber an foreach question naval feo isno pana fran incoract answer in ACCA exams theres nohng tobe gained by leaving an NCQ Docarrec and moving ot Make ol of be queton so i'youhave bn ater You have answered he reste quostons, you can visti, you are steng a paper-based xan, you rust remanbor' ecors your answers 9 MCOs on your Candidete ‘CONCLUSION From ths dscussion, you can soe that MCQs are not an easy option. Maximising your marks when attempting MCQs requires: sour preparation studying across ihe sylabus Prackang smary ifort ypos of question as posible ovelaping your own stalogy or ateren| ypes of question thinking ctoatyin te exam ‘worn eu your ans structing your approach the “Taking ths approach does not make answering MCQs easy, butt should mean that you abtain the marks you deserve. Last updated: 16 Feb 2016 ipshww acaglobal comighenistatertioxam-supprtresourcesundumetals-exame-study. resources itectnical-arileshow-toanswer-mulise-choice-g... 9