lOMoARcPSD|3307897 Foundations in Accountancy/ ACCA ACCOUNTANT IN BUSINESS (FAB/AB) P R A C T I C E & R E V I S I O N Welcome to BPP Learning Media's Practice & Revision Kit for AB In this Practice & Revision Kit, which has been reviewed by the ACCA examining team, we: Include Do you know? Checklists to test your knowledge and understanding of topics Provide you with two mock exams including the Specimen Exam FOR EXAMS FROM SEPTEMBER 2019 TO 31 AUGUST 2020 K I T lOMoARcPSD|3307897 FAB/AB ACCOUNTANT IN BUSINESS First edition May 2011 Eighth edition February 2019 A note about copyright Dear Customer ISBN 9781 5097 2412 Previous ISBN 9781 5097 1753 e-ISBN 9781 5097 2439 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable sustainable sources All our 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 Contains public sector information licensed under the Open Government licence v3.0 We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the exam answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated © BPP Learning Media Ltd 2019 ii What does the little © mean and why does it matter? 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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? lOMoARcPSD|3307897 CONTENTS Contents Page Finding questions Question index v Helping you with your revision viii Using your BPP Practice & Revision Kit ix Passing the FAB/AB exam x Approach to examining the syllabus xi The computer-based examination xii Tackling Multiple Choice Questions .xiii Using your BPP products .xiv Questions and answers Questions Answers 125 Exam practice Mock exam – Specimen Exam Questions 189 Answers 203 Mock exam Questions 213 Answers 227 Review form iii lOMoARcPSD|3307897 FAB/AB ACCOUNTANT IN BUSINESS iv lOMoARcPSD|3307897 USING YOUR BPP PRACTICE AND REVISION KIT Question index Time allocation Page Marks Mins Questions Answers 13 16 125 30 36 126 23 28 128 42 50 11 129 24 29 14 132 16 19 21 133 36 43 22 134 19 23 26 136 24 29 28 138 45 54 37 139 23 28 42 141 27 32 44 143 15 18 46 145 24 29 48 146 Part A: The business organisation, its stakeholders and the external environment Business organisations and their stakeholders Questions 1.1 to 1.8 The business environment Questions 2.1 to 2.18 The macro-economic environment Questions 3.1 to 3.14 Micro-economic factors Questions 4.1 to 4.25 Section A MTQs Questions 5.1 to 5.6 Part B: Business organisation structure, functions and governance Business organisation, structure and strategy Questions 6.1 to 6.10 Organisational culture and committees Questions 7.1 to 7.22 Corporate governance and social responsibility Questions 8.1 to 8.12 Section B MTQs Questions 9.1 to 9.6 Part C: Accounting and reporting systems, technology, compliance and controls The role of accounting Questions 10.1 to 10.27 Control, security and audit Questions 11.1 to 11.14 Identifying and preventing fraud Questions 12.1 to 12.16 Financial technology (Fintech) Questions 13.1 to 13.9 Section C MTQs Questions 14.1 to 14.6 v lOMoARcPSD|3307897 FAB/AB ACCOUNTANT IN BUSINESS Time allocation Page Marks Mins Questions Answers 35 42 55 147 30 36 58 150 16 19 60 152 28 34 62 153 30 36 65 156 28 34 67 158 22 26 70 160 24 29 73 162 31 37 79 163 24 29 81 165 34 41 87 166 24 29 90 168 Part D: Leading and managing individuals and teams Leading and managing people Questions 15.1 to 15.21 Recruitment and selection Questions 16.1 to 16.18 Diversity and equal opportunities Questions 17.1 to 17.10 Individuals, groups and teams Questions 18.1 to 18.17 Motivating individuals and groups Questions 19.1 to 19.18 Training and development Questions 20.1 to 20.17 Performance appraisal Questions 21.1 to 21.13 Section D MTQs Questions 22.1 to 22.6 Part E: Personal effectiveness and communication in business Personal effectiveness and communication Questions 23.1 to 23.19 Section E MTQs Questions 24.1 to 24.6 Part F: Professional ethics in accounting and business Ethical considerations Questions 25.1 to 25.21 Section F MTQs Questions 26.1 to 26.6 vi lOMoARcPSD|3307897 USING YOUR BPP PRACTICE AND REVISION KIT Time allocation Page Marks Mins Questions Answers Mixed Bank 1: Questions 27.1 to 27.23 38 46 93 170 Mixed Bank 2: Questions 28.1 to 28.24 40 48 97 172 Mixed Bank 3: Questions 29.1 to 29.24 40 48 103 175 Mixed Bank 4: Questions 30.1 to 30.24 40 48 106 176 Mixed Bank 5: Questions 31.1 to 31.24 40 48 110 177 Mixed Bank 6: Questions 32.1 to 32.23 38 46 113 179 Mixed Bank 7: Questions 33.1 to 33.25 42 50 117 181 Mock exam (Specimen Exam) 100 120 189 203 Mock exam 100 120 213 227 Mixed Banks Mock exams vii lOMoARcPSD|3307897 FAB/AB ACCOUNTANT IN BUSINESS Helping you with your revision BPP Learning Media – ACCA Approved Content Provider As an ACCA Approved Content Provider, BPP Learning Media gives you the opportunity to use revision materials reviewed by the ACCA examining team By incorporating the ACCA examining team's comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Practice & Revision Kit provides excellent, ACCA-approved support for your revision These materials are reviewed by the ACCA examining team The objective of the review is to ensure that the material properly covers the syllabus and study guide outcomes, used by the examining team in setting the exams, in the appropriate breadth and depth The review does not ensure that every eventuality, combination or application of examinable topics is addressed by the ACCA Approved Content Nor does the review comprise a detailed technical check of the content as the Approved Content Provider has its own quality assurance processes in place in this respect Selecting questions We provide signposts to help you plan your revision A full question index Attempting mock exams There are two mock exams that provide practice at coping with the pressures of the exam day We strongly recommend that you attempt them under exam conditions Mock exam is the Specimen Exam Mock exam reflects the question styles and syllabus coverage of the exam viii lOMoARcPSD|3307897 USING YOUR BPP PRACTICE AND REVISION KIT Using your BPP Practice & Revision Kit Aim of this Practice & Revision Kit To provide the practice to help you succeed in the examination for FAB/AB Accountant in Business To pass the examination you need a thorough understanding in all areas covered by the syllabus and teaching guide Recommended approach Make sure you are able to answer questions on everything specified by the syllabus and teaching guide You cannot make any assumptions about what questions may come up in your exam The examining team aims to discourage 'question spotting' Learning is an active process Use the DO YOU KNOW? Checklists to test your knowledge and understanding of the topics covered in FAB/AB Accountant in Business by filling in the blank spaces Then check your answers against the DID YOU KNOW? Checklists Do not attempt any questions if you are unable to fill in any of the blanks – go back to your BPP Interactive Text and revise first When you are revising a topic, think about the mistakes that you know that you should avoid by writing down POSSIBLE PITFALLS at the end of each DO YOU KNOW? Checklist Once you have completed the checklists successfully, you should attempt the questions on that topic Each question is worth 1, or marks and carries with it a time allocation of 1.2 minutes per mark You should attempt each bank of MCQs to ensure that you are familiar with their styles and to practise your technique Ensure that you read Tackling Multiple Choice Questions on page xii to get advice on how best to approach them Once you have completed all of the questions in the body of this Practice & Revision Kit, you should attempt the MOCK EXAMS under examination conditions Check your answers against our answers to find out how well you did ix lOMoARcPSD|3307897 FAB/AB ACCOUNTANT IN BUSINESS Passing the FAB/AB exam FAB/AB Accountant in Business introduces students (who may not have a business background) to the business entity made up of people and systems which interact with each other There is a lot to learn, but none of it is particularly difficult and a good grasp of these topics will help you in higher-level business exams To access FIA and ACCA syllabuses, visit the ACCA website www2.accaglobal.com/students/fia The exam All questions in the exam are compulsory This means you cannot avoid any topic, but also means that you not need to waste time in the exam deciding which questions to attempt There are 46 questions in Section A of the exam, worth either or marks In Section B of the exam there are multiple task questions (one drawn from each of the six main areas of the syllabus) worth marks each and are a mixture of MCQs and other types of OTQ (number entry, multiple response and multiple response matching) in the CBE This means that the examining team is able to test most of the syllabus at each sitting So you need to have revised right across the syllabus for this exam Topics to revise For this exam it is important to revise the whole syllabus thoroughly Questions can be drawn from any syllabus area Revision This Practice & Revision Kit has been reviewed by the ACCA's examining team and contains questions from the Specimen Exam as mock exam 1, so if you just worked through it to the end you would be very well prepared for the exam It is important to tackle questions under exam conditions Allow yourself just the number of minutes shown next to the questions in the index and don't look at the answers until you have finished Then correct your answer and go back to the Interactive Text for any topic you are really having trouble with Try the same question again a week later – you will be surprised how much better you are getting Doing the questions like this will really show you what you know, and will make the exam experience less worrying Passing the exam The following points will help you pass the exam x Read the question carefully Don't spend more than the allotted time on each question Don't become bogged down If you are having trouble with a question, stop, think, decide on your best option and answer the question Move on! ... answers to find out how well you did ix lOMoARcPSD|3307897 FAB /AB ACCOUNTANT IN BUSINESS Passing the FAB /AB exam FAB /AB Accountant in Business introduces students (who may not have a business background)... lOMoARcPSD|3307897 FAB /AB ACCOUNTANT IN BUSINESS Helping you with your revision BPP Learning Media – ACCA Approved Content Provider As an ACCA Approved Content Provider, BPP Learning Media gives... dispute Taking notes during the meeting (1 mark) 25 lOMoARcPSD|3307897 FAB /AB ACCOUNTANT IN BUSINESS 7.20 Ali is responsible for preparing and issuing documents prior to a meeting, then acting on