BPP ACCA F12FFAB accountant in business 2017

Foundations in Accountancy FAB /ACCA F1 s.pk ACCA approved content provider k k p p s s BPP Learning Media is dedicated toksupporting aspiring business professionals k o o o o with top-quality learning e material b as they study for demanding professional b e e e r r exams, often whilst Fworking full time BPP Learning Media’s commitment F to student success is shown by our record of quality, innovation and market leadership in paper-based and e-learning materials BPP Learning Media’s study materials are written by professionally qualified specialists who know from personal experience the importance of top-quality materials for exam success • Chapter activities to test your understanding of the topics covered • Key terms extracted from the text and highlighted in ‘key term’ boxes • Exam focus points highlighting ways in which topics might be examined • A question and answer bank prepared by BPP Learning Media authors • Icons to highlight activities, key terms, PER alerts and quick quizzes • Regular fast forward summaries emphasising the key points in each chapter k p s ok o b e re F Contact us o b e re F k p s ok o b e Fre Fr k p s ok o b e e Feburary 2016 £25.00 s.pk FI31ST16 (RICOH).indd 1-3 eb e r F o k p s ok For exams from September 2016 to 31 August 2017 BPP House 142-144 Uxbridge Road London W12 8AA United Kingdom T 0845 075 1100 (UK) T +44 (0)20 8740 2211 (Overseas) E Learningmedia@bpp.com bpp.com/learningmedia k p s ok Interactive Text s.pk In addition to ACCA examining team reviewed material you get: Accountant in Business s.pk Foundations in Accountancy FAB / ACCA Paper F1 Accountant in Business This Interactive Text for Foundations in Accountancy FAB Accountant in Business and ACCA Paper F1 Accountant in Business has been comprehensively reviewed by the ACCA examining team This review guarantees appropriate depth and breadth of content and comprehensive syllabus coverage bo e e Fr k p s ok ACCA APPROVED CONTENT PROVIDER k p s ok o b e re F k p s ok o b e re F ACCA Approved Interactive Text k p s Foundations in Accountancy FAB / k o o ACCA e Paper eb F1 r F Accountant in Business k p s ook eb e r F k p s ok o b e Fre Free access to our Exam Success siteks.pk o o b eLooke inside Fr For exams from September 2016 to 31 August 2017 eb e r F o k p s ok k p s ook b e Fre 02/02/2016 10:57 ACCA APPROVED CONTENT PROVIDER pk ks o o eb o b e re k p s ok re F F As the first accredited publisher of ACCA materials, BPP Learning Media has set the benchmark for producing exceptional study materials for students and tutors alike Our Study Texts, Practice & Revision Kits and i-Passes (for exams on demand) are reviewed by the ACCA examining team and are written by our in-house authors with industry and teaching experience who understand what is required for exam success EXAM SUCCESS SITE To help maximise your chances of succeeding in your exams, we’ve put together a suite of exclusive ACCA resources Our Exam Success site provides you with access to a free digital version of this publication, as well as extra resources designed to focus your efforts on exams and study methods k p s ok k p s ook To access the Exam Success site, please email learningmedia@bpp.com with the subject line “Access to Exam Success site - eBook”, including your order reference number and the name of the book you’ve bought (ie ACCA F5 Study Text) for your access code Once you have received your code, please follow the instructions below: o b e re F b e Fre To access the BPP ACCA Exam Success site for this material please go to: www.bpp.com/ExamSuccessSite n Create a user account if you don’t already have one Make sure you reply to the confirmation email n Log in using your registered username and password k p s ok k p s k o o eb Select the paper you wish to access o eb e r F n Enter the code you received when prompted You will only have to this once for each paper you are studying eb e r F k p s ook Fre e e r F b k p s ook k p s k o o eb Foundations inF Fre Accountancy FAB k p ACCA s k o o b ree F PAPER F1 o b e re I N T E R A C T.pk s kI o o eb e r F V E ACCOUNTANT IN BUSINESS T E X T BPP Learning Media is an ACCA Approved Content Provider for the Foundations in Accountancy qualification This means we work closely with ACCA to ensure this Interactive Text contains the information you need to pass your exam k p s ok k p s ok In this Interactive Text, which has been reviewed by the ACCA examination team, we: o b e re    o b e re Highlight the most important elements in the syllabus and the key skills you need F Signpost how each chapter links to the syllabus and the study guide k p s ok F Provide lots of exam focus points demonstrating what the examination team will want you to  Emphasise key points in regular fast forward summaries  Test your knowledge in quick quizzes  Examine your understanding in our practice question bank  Reference all the important topics in our full index BPP's Practice & Revision Kit also supports this paper FOR EXAMS FROM SEPTEMBER 2016 TO 31 AUGUST 2017 F o b e re k p s ok F o b e re k p s ok FAB/F1 ACCOUNTANT IN BUSINESS k p s k o o eb o b e re First edition March 2011 Fifth edition January 2016 Fre F ISBN 9781 4727 4589 Previous ISBN 9781 4727 3524 eISBN 9781 4727 4630 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library BPP Learning Media Ltd BPP House, Aldine Place 142-144 Uxbridge Road London W12 8AA www.bpp.com/learningmedia o o b ee k p s k Printed in the United Kingdom by Ricoh UK Limited Unit Wells Place Merstham RH1 3LG Fr Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable sustainable sources All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media k p s ok We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the practice answer bank have been prepared by BPP Learning Media Ltd o b e re F © BPP Learning Media Ltd 2016 ii F A note about copyright Dear Customer What does the little © mean and why does it matter? Published by o b e re k p s ok Your market-leading BPP books, course materials and elearning materials not write and update themselves People write them on their own behalf or as employees of an organisation that invests in this activity Copyright law protects their livelihoods It does so by creating rights over the use of the content k p s ook Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics b e Fre With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media:  Photocopying our materials is a breach of copyright  Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to Facebook or emailing them to your friends is a breach of copyright You can, of course, sell your books, in the form in which you have bought them – once you have finished with them (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single user licence basis: we not supply 'unlock' codes to people who have bought them secondhand And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that If they act illegally and unethically in one area, can you really trust them? k p s ok o b e re F k p s ok k p s ok F o b e re CONTENTS k p s k o o Contents eb e r F o b e re k p s ok F Page Introduction Helping you to pass v Chapter features vi Studying FAB/F1 vii The Computer-Based Examination xxi Tackling Multiple Choice Questions .xxii Part A The business organisation, its stakeholders and the external environment Business organisations and their stakeholders The business environment 19 The macroeconomic environment 57 Microeconomic factors 85 Part B Business organisation structure, functions and governance k p s ook b e Fre b e Fre Part C Accounting and reporting systems, controls and compliance 10 k p s ook Business organisation, structure and strategy 123 Organisational culture and committees 145 Corporate governance and social responsibility 177 The role of accounting 201 Control, security and audit 237 Identifying and preventing fraud 265 Part D Leading and managing individuals and teams 11 12 13 14 15 16 17 Leading and managing people 293 Recruitment and selection 319 Diversity and equal opportunities 345 Individuals, groups and teams 357 Motivating individuals and groups 379 Training and development 399 Performance appraisal 421 Part E Personal effectiveness and communication in business 18 Personal effectiveness and communication 437 Part F Professional ethics in accounting and business 19 k p s ok k p s ok Ethical considerations 477 o b e re o b e re Practice question bank 517 F F Practice answer bank 537 Index 551 Review form F o b e re k p s ok k p s ok F o b e re iii FAB/F1 ACCOUNTANT IN BUSINESS Fre k p s k o o eb k p s ook b e Fre o b e re iv F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re INTRODUCTION k p s k o o eb Helping you to pass o b e re re Learning Media – ACCA Approved ContentFProvider FBPP k p s ok As an ACCA Approved Content Provider, BPP Learning Media gives you the opportunity to use study materials reviewed by the ACCA examination team By incorporating the examination team's comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Interactive Text provides excellent, ACCA-approved support for your studies The PER alert! To become a Certified Accounting Technician or qualify as an ACCA member, you not only have to pass all your exams but also fulfil a practical experience requirement (PER) To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve different performance objectives, we have introduced the 'PER alert' feature You will find this feature throughout the Interactive Text to remind you that what you are learning in order to pass your Foundations in Accountancy and ACCA exams is equally useful to the fulfilment of the PER requirement k p s ook k p s ook Your achievement of the PER should now be recorded in your online My Experience record b e Fre Tackling studying b e Fre Studying can be a daunting prospect, particularly when you have lots of other commitments The different features of the Interactive Text, the purposes of which are explained fully on the Chapter features page, will help you whilst studying and improve your chances of exam success Developing exam awareness Our Interactive Texts are completely focused on helping you pass your exam Our advice on Studying FAB/F1 outlines the content of the paper and the necessary skills you are expected to be able to demonstrate Exam focus points are included within the chapters to highlight when and how specific topics might were examined, or how they might be examined in the future Using the Syllabus and Study Guide k p s ok k p s ok You can find the syllabus and study guide on page viii of this Interactive Text o b e re Testing what you can F o b e re F Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt We include Questions – lots of them – both within chapters and in the Practice Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content F o b e re k p s ok k p s ok F o b e re v FAB/F1 ACCOUNTANT IN BUSINESS k p s k o o eb Chapter features Fre o b e re k p s ok Each chapter contains a number of helpful features to guide you through each topic Topic list What you will be studying in this chapter and the relevant section numbers, together with the ACCA syllabus references Introduction Puts the chapter content in the context of the syllabus as a whole Study Guide Links the chapter content with ACCA guidance Fast Forward k p s ook EXAMPLE b e Fre o b e re Summarises the content of main chapter headings, allowing you to preview and review each section easily k p s ook Demonstrates how to apply key knowledge and techniques b e Fre Key Term Definitions of important concepts that can often earn you easy marks in exams Exam Focus Point When and how specific topics were examined, or how they may be examined in the future Formula Formulae that are not given in the exam but which have to be learnt PER Alert Gives you a useful indication of syllabus areas that closely relate to performance objectives in your Practical Experience Requirement (PER) Question Gives you essential practice of techniques covered in the chapter k p s ok k p s ok o b e re Chapter Roundup A full list of the Fast Forwards included in the chapter, providing an easy source of review Quick Quiz A quick test of your knowledge of the main topics in the chapter Practice Question Bank Found at the back of the Interactive Text with more comprehensive chapter questions Cross referenced for easy navigation F vi F F o b e re F k p s ok k p s ok F o b e re INTRODUCTION k p s k o o eb Studying FAB/F1 re to Use this Interactive Text FHow o b e re k p s ok F Aim of this Interactive Text To provide the knowledge and practice to help you succeed in the examination for Paper FAB/F1 Accountant in Business To pass the examination you need a thorough understanding of all areas covered by the syllabus and teaching guide Recommended approach (a) To pass you need to be able to answer questions on everything specified by the syllabus and teaching guide Read the Interactive Text very carefully and not skip any of it (b) Learning is an active process Do all the questions as you work through the Interactive Text so you can be sure you really understand what you have read k p s ook b e Fre k p s ook b e Fre (c) After you have covered the material in the Interactive Text, work through the Practice Question Bank, checking your answers carefully against the Practice Answer Bank (d) Before you take the exam, check that you still remember the material using the following quick revision plan (i) Read through the chapter topic list at the beginning of each chapter Are there any gaps in your knowledge? If so, study the section again (ii) Read and learn the key terms (iii) Look at the exam focus points These show the ways in which topics might be examined (iv) Read the chapter roundups, which are a summary of the fast forwards in each chapter (v) Do the quick quizzes again If you know what you're doing, they shouldn't take long This approach is only a suggestion You or your college may well adapt it to suit your needs Remember this is a practical course (a) o b e re (b) F k p s ok o b e re Try to make as many links as you can to other papers at the Introductory and Intermediate levels F For practice and revision use BPP Learning Media’s Practice & Revision Kit and Passcards o b e re F k p s ok Try to relate the material to your experience in the workplace or any other work experience you may have had k p s ok k p s ok F o b e re vii FAB/F1 ACCOUNTANT IN BUSINESS k p s k o o eb What FAB/F1 is about o b e re k p s ok The overall aim of the Accountant in Business syllabus is to introduce accountancy firmly in its context as a central business function This encompasses: Fre        F Business organisation, stakeholders and the business environment Business structure, functions and governance, including social responsibility Accounting and its relationship with other business functions Audit and internal control People management issues Effectiveness and communications Professional ethics in the business environment Brought forward knowledge There is no assumed brought forward knowledge for this paper Approach to examining the syllabus k p s ook k p s ook Paper FAB/F1 is a two-hour paper It can be taken as a written paper or a computer-based examination The questions in the computer-based examination are objective test questions or multiple task questions – multiple choice, number entry, multiple response, multiple response matching, picklists and hotspots (See page xxiii for frequently asked questions about computer-based examinations.) b e Fre The written examination is structured as follows: b e Fre Number of marks 16 60 24 16 one mark objective test questions 30 two mark objective test questions four mark multiple task questions (One on each area of the syllabus) o b e re k p s ok F viii F o b e re k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re NOTES Fre k p s k o o eb k p s ook b e Fre o b e re F F k p s ook b e Fre k p s ok F o b e re o b e re k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re FAB ACCOUNTANT IN BUSINESS (01/16) pk Review form ks o o b ree Name: F F During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) How have you used this Interactive Text? (Tick one box only) Home study (book only) On a BPP in-centre course Our advertisement in ACCA Student Accountant On a BPP online course Our advertisement in Teach Accounting On a course with another college Other advertisement Other Why did you decide to purchase this Interactive Text? (Tick one box only) k p s k Have used BPP Texts in the past o o b ee Our brochure with a letter through the post ACCA E-Gain email k p s ook BPP email Our website www.bpp.com Recommendation by friend/colleague Fr o b e re Address: k p s ok Recommendation by a lecturer at college Saw advertising Other b Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) e Fre Prices and publication dates of new editions Which BPP products have you used? Text Kit i-Pass Information on Interactive Text content Passcards Facility to order books None of the above Your ratings, comments and suggestions would be appreciated on the following areas Very useful Useful Not useful Introductory section (How to use this Interactive Text) Key terms Examples Questions and answers Fast forwards o b e re Quick quizzes k p s ok k p s ok o b e re Exam alerts F F Practice Question Bank Practice Answer Bank Index Structure and presentation Icons Excellent Good Adequate Poor Overall opinion of this Interactive Text Do you intend to continue using BPP products? Yes Please note any further comments and suggestions/errors on the reverse of this page The author of this edition can be emailed at: accaqueries@bpp.com No k p s ok k p s ok Please return this form to: Head of ACCA & Foundations in Accountancy Programmes, BPP Learning Media Ltd, FREEPOST, London, W12 8AA F o b e re F o b e re FAU FOUNDATIONS IN AUDIT k p s k o o eb Review form (continued) o b e re Please note any further comments and suggestions/errors below Fre k p s ook b e Fre o b e re F o b e re F k p s ook b e Fre k p s ok F k p s ok k p s ok o b e re F k p s ok k p s ok F o b e re ... Size The business may be a small family business or a multinational corporation (g) Sources of finance Businesses can raise finance by borrowing from banks or government funding or issuing shares... communications with internal and external colleagues, maintaining good business relationships, drafting reports, making presentations, using technology effectively and even addressing complaints It all... explain why they are formed (b) Describe common features of business organisations (c) Outline how business organisations differ (d) List the industrial and commercial sectors in which business