Course-ACCA (Knowledge). 1st Class test for FAB. Total questions-25. Test time- 25 Minutes.

BatchName ACCA Registration NumberCUC Registration Number-------------------------------------------------------------------------------------------------------Q-1 Which of the following is a DISADVANTAGE of using a committee rather than an individual to make a decision? A Slower decisions B.Unsupported decisions C.Autocratic decisions D. Unworkable decisions Q-2 Which of the following would be acting in the public interest? 1. An auditor publicly disclosing the identity of a whistleblower at a client organisation 2. An employee at an airline company reporting unsafe practices 3. An auditor of a charity reporting a material fraud 4. An accountant at a listed company reporting illegal accounting to a stock exchange regulator A 2and4only B 1and3only C 2,3and4 D 1,2and3 Q-3 FKT Which of the following is most important when deciding on the content of the proposed code of ethics? Company is considering the introduction of a code of ethics following media criticism of its selling practices. A. The minimum acceptable standards of behaviour and conduct of employees (KEY) B. The legal requirements affecting the sales of core products and services C. The main issues of concern to customers who have made complaints D. The generally accepted standards by other companies operating in the same sector

Q-4 James conducts a systematic review of suppliers delivery notes. Which of the following does the above control relate to? A Distribution B Credit limits C Quality management D Goods inwards Q-5 What is the responsibility of a Public Oversight Board? A The establishment of detailed rules on internal audit procedures B The commissioning of financial reporting standards C The creation of legislation relating to accounting standards D The monitoring and enforcement of legal and compliance standards Q-6 HIJ Co is a large company whose shares are listed on the national stock exchange. The company is compliant with generally accepted standards of corporate governance. The finance department of HIJ Co has completed the preparation of the draft financial statements. To which of the following will these statements be submitted initially for scrutiny? A The external auditors B The audit committee C The board of directors D The internal auditors

Q-7 The preparation and filing of accounts by limited companies each year is required by which of the following? A. Codes of corporate governance B. National legislation C. International Accounting Standards Q-8 In most countries, what is the usual purpose of codes of practice on corporate governance? A To establish legally binding requirements to which all companies must adhere B. To set down detailed rules to regulate the ways in which companies must operate C. To provide guidance on the standards of best practice that companies should adopt D. To provide a comprehensive framework for management and administration Q-9 Ethical behaviour is the same the world over. True or false A B True False

Q-10 IFAC stands for A International Financial Accounting Committee B International Financial Accounting Commission C International Federation of Accountants D International Federation of Accounting Concepts Q-11 Which of the following would prevent a non executive director from being seen as independent? A Not being financially independent of the company B Having share options C Other directorships D Not being a previous employee of the company Q-12 In terms of employment ACCAs ethical guidelines require members to: a. Act responsibly in the way that all other professional due b. Act responsibly but in a way that satisfies organizational demands and pressure c. Act responsibly but in a way that satisfyes the individuals own ethical code d. Act responsibly, honour any legal contract of employment and conform employment legislation Q-13 Which of the following is a disadvantage of having a remuneration committee? A. takes the directors attention away from making strategic decisions about the companys future B. Increase the agency problem C. Increased cost D. Removes the danger of directors being paid excessive salaries Q-14 Non excutive directors can perform an important role in corporate governance in all but one of the following ways: A. they act as independent advisors ensuring that executive directors make decisions in the best interest of shareholders B. They play a role on the remuniration committee to ensure fair pay to dirctors C. They are members of the audit committee to whom internal and external auditors report D. They are responsible for all key business decisions so they should ensure that shareholders interests are taken into account Q-15 ACCA students do not have to comply with either IFACs or ACCAs code of ethics. Is the above statement true or false? A. True B. False Q-16 Which of the following are legitimate stakeholders in a company? 1. Shareholders 2. Past employees now receiving a ension 3. Local government 4. Investors in debentures issued by the company

A. 1 and 2 only B. 1, 2 and 3 only C. 1, 2 and 4 only D. 1,2,3 and 4 Q-17 According to Cadbury report, corporate governance is the system by which companies are: A. Run in the interests of all stakeholders B. Run in the intersts of the shareholders C. Directed and controlled D. Administreted within the law Q-18 Mr X has been asked to act as a NED of company H. Which of the following facts about him would prevent him from taking up this role? 1. He owns 20% of the share capital of company H 2. He is to be paid 20000pa as a fee for acting as a NED 3. Up until last month, he was an executive director in company H a. 1 and 2 b. 1 and 3 c. 2 and 3 d. 3 only Q-19 What is the minimum acceptable number of NEDs to serve on the remuneration committee of a small UK-listed company? a. 1 b. 2 c. 3 d. 4 Q-20 Consider the following statements: 1. traditional profit and loss financial reposting struggles to recognize the benefits of corporate social responsibility 2. A visible CSR programme can assist the huan resources department in recruiting and retaining employees. Which of the above statements is/are true? A. 1 B. 2 C. Both D. Neither Q-21 Which of the followng are the needs of the public at large in their role as a stakeholder group to a company? 1. Ethical behaviour 2. Care of the environment 3. Acceptance of social responsibility 4. High dividend payments a. 1 and 2 b. 1 and 3 c. 1,2 and 3 d. 1,2,3 and 4

Q-22 Which of the following statement is false? a. Companies legislation is intended to protect investors b. Companies legislation is intended to protect lenders c. Companies legislation is identical to the requirements of accounting standards d. Companies legislation is similar in commonwealth countries Q-23 Which section of the accounting department is unlikely to be involved in the preparation of the financial statements? a. Inventory b. Sales ledger c. Treasury d. Non current assets Q-24 Which of the following must be true for financial statements to give true and fair view? a. They must be accurate b. They must show a correct valuation of the company c. They must not be materially misstated d. They must be filed at companies house Q-25 What are the potential consequences of financial statements failing to give a true and fair view? a. The company will be struck off the register of the company b. The company will be forced to place a statement to that effect on its website c. The directors will be forced to resign d. The auditors will give a qualified audit report Q-26 Which of the following produces accounting standards? a. IASB b. SAC c. IASCF d. IFRIC Q-27 What sort of information will management be interested in for the purposes of controlling their business? a. Financial information only b. Non financial information only c. Quantitative information only d. Both financial and non financial information Q-28 The legal duty for a company to pay the correct amount of tax rests with: a. the companys tax advisors b. the tax authority c. the company itself d. the companys auditors Q-29 The treasury department of a company can be run as a profit centre that is expected to generate profits for the company. a. True b. False

Q-30 Which of the following statements about debt and equity finance is correct? a. Debt finance tends to have a higher annual cost than equity finance b. Interest payments can usually be delayed if the company is unable to afford them c. Dividends are an allowable deduction, reducing the companys tax bill d. Equity is often a better source of finance for riskier projects Q-31 You are given a the following extract: the clerk multiplies the hours worked by the hourly rate to determine the gross pay What does the extract describe? a. A system b. A policy c. A procedure d. A guideline Q-32 Tony is trying to design a procedure for the processing of orders from customers. Which of the following is not an objective of that procedure? a. To ensure that orders are processed promptly b. To ensure that goods are only dispatched to customers who are likely to pay c. To ensure that all orders are recorded d. To ensure that customers sign to accept the goods Q-33 Jacob is trying to design a procedure for the calculation of cash wages to employees. Which of the following is not an objective of that procedure? A. To ensure that gross wages are calculated correctly B. To ensure that deductions are calculated correctly C. To ensure that wages are paid only to employees entitled to them D. To ensure that staff are only paid for hours worked Q-34 Safeguarding the companies assets is a purpose of organizational control. Which of the following controls is not designed to achieve this? a. Locking cash in the safe b. Checking the payroll has been calculated correctly c. Reconciliation of cheques received in the post to the amount banked d. Reconciliation of the amount recorded in the cash register with the physical cash. Q-35 Which of the following is not an example of co ordination between the marketing and accounting departments? a. Reviewing advertising cost/ benefit b. Pricing c. Assessing market share d. Assessing credit worthiness