ACCA BT Exam 1

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ACCA BT Exam 1

Test your knowledge with this practice exam

52
Questions
60
Minutes

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Question 1 of 64

1 Mercy Chirwa is advising 40 groundnut farmers near Lilongwe, Malawi, who want to pool their harvests, sell jointly, give each member one vote and share any surplus in proportion to the crop each member supplies. Which type of organisation is MOST appropriate for their plan?
2 Relocating its Addis Ababa warehouse to Adama, Hoopoe Retail Co faces a workers' union that could halt operations through strike action but has shown little interest because members were told their jobs will transfer. Using Mendelow's matrix, which strategy is MOST appropriate for the union?
3 Which data protection principle best explains the compliance concern at Sandgrouse Systems Co in Dakar, which still holds scanned identity cards from a 2017 loan campaign, although the loans were repaid years ago and the scans serve no current purpose?
4 When Nadia Tazi reviews how Flamingo Construction Co in Casablanca, Morocco, holds personal data on 600 site workers, which TWO actions should she recommend to meet data security principles? Select TWO.
5 Workflow software installed at Barbet Enterprises Co in Blantyre now routes approvals directly from supervisors to the finance director. The company has removed two layers of middle management but kept the same number of operational staff. Which term is the MOST appropriate description of this change?
6 Hornbill Energy Co, a charcoal-briquette maker in Nairobi, Kenya, wants to reduce the environmental damage caused by its operations while protecting profit. Which TWO measures are MOST effective for this aim? Select TWO.
7 Small traders who once bought accounting software from Turaco Systems Co in Kenya are now keeping their records through mobile-money transaction statements instead. Which of Porter's five forces best explains the pressure this places on Turaco?
8 In Porter's value chain, how should Egret Pharma Co in Addis Ababa classify its negotiation of a three-year framework contract with a single supplier of active ingredients at a lower unit price? Which classification is MOST appropriate?
9 At the Thiès depot of Oxpecker Logistics Co in Senegal, manager Mamadou Sarr notices that drivers hear of route changes days before the official memo, through a WhatsApp group run by a senior driver. Which response is MOST appropriate for Mamadou?
10 Which potential DISADVANTAGE of the informal organisation at Plover Retail Co's Lilongwe stores should Chipo Banda, the HR officer, watch for most closely?
11 When Youssef El Amrani drafts the structure chart for Falcon Solutions Co in Rabat, it has one managing director, three directors who each have a span of control of five managers, and each manager supervising nine staff. What total headcount should the chart show?
12 Every month Hiwot Tesfaye prepares a report comparing each site's actual cement usage with budget for the project managers of Crowned Crane Construction Co in Addis Ababa, so that they can reallocate materials between sites. At which level of Anthony's hierarchy is this information MOST appropriately placed?
13 Which TWO outcomes are MOST likely when Lovebird Media Systems Co in Dakar moves to a matrix structure in which staff report both to a product manager and to a functional head? Select TWO.
14 Salma Benali has just been appointed secretary of the staff welfare committee at Falcon Solutions Co. Which task is MOST appropriate for her in this role?
15 Project teams at Kestrel Digital Solutions Co form around each client brief, give influence to whoever has the relevant expertise rather than to job titles, and dissolve when the job ends. Which of Handy's cultures best explains this way of working?
16 When marketing at Hoopoe Retail Co in Addis Ababa proposes a 15% discount campaign, the finance director asks the management accountant for information before approving it. Which information is MOST appropriate for this decision?
17 Which TWO financial considerations should Kiprono Cheruiyot, production planner at Barbet Enterprises Co, weigh when deciding whether to build inventory ahead of the peak season? Select TWO.
18 Oxpecker Logistics Co in Dakar must pay a truck supplier USD 2 million in six months, while all of its revenue is earned in XOF. Which function is MOST appropriate to manage the resulting currency exposure?
19 An internal audit review at Plover Retail Co has found weak stock-count controls in the stores managed by the finance director. To whom should the internal audit report MOST appropriately go to protect its independence?
20 Kondwani Phiri, a trainee accountant at Guineafowl Enterprises Co in Lilongwe, Malawi, has these figures: opening inventory MWK 70m, closing inventory MWK 98m, revenue MWK 730m and cost of sales MWK 511m. Using average inventory, what inventory holding period should Kondwani report?
21 Balances over 90 days on Egret Pharma Co's aged receivables report rose from ETB 1.2m to ETB 4.5m in a year, although sales volumes were flat, as Dawit Bekele has found. Which weakness in the credit control system best explains this trend?
22 Which type of control is the MOST appropriate description of the check in Kestrel Digital Solutions Co's payroll package that rejects any overtime entry above 60 hours a month for a single employee before it is processed?
23 Achieng Otieno, finance manager at Hornbill Energy Co in Nairobi, learns that one clerk both sets up new suppliers and releases payments to them. Which TWO controls should she recommend to address this risk? Select TWO.
24 Cash deposits by a client of Fatou Ndiaye, an accountant in practice in Dakar, appear to be split into small amounts to avoid the bank's reporting threshold. What should Fatou do FIRST?
25 Which fraud is MOST appropriately suggested when Mercy Chirwa, reviewing Guineafowl Enterprises Co's ledger, finds that cash received from one customer was posted to a second customer's account, and a later receipt from a third customer then covered the first?
26 Once Oxpecker Logistics Co adds its shipping records to a blockchain shared with its customs agents, no single party can alter a past entry. Which feature of blockchain MOST appropriately explains this?
27 Tigist Alemu, a finance manager at Egret Pharma Co, shows great concern for her team's welfare and harmony but little concern for meeting reporting deadlines. Where on Blake and Mouton's grid is her style MOST appropriately placed?
28 The investment committee of Kestrel Digital Solutions Co approved a costly acquisition after members kept their doubts to themselves to preserve unanimity. Which group behaviour best explains the decision?
29 In the month-end close team at Hornbill Energy Co, Lerato Molefe polishes the final reporting pack, hunts down small errors and worries about missing the deadline. Which Belbin role does she MOST appropriately fill?
30 Sipho Nkosi has just brought together a new audit team at Crowned Crane Construction Co, and it has entered Tuckman's storming stage. Which TWO behaviours would he MOST likely observe? Select TWO.
31 Having reviewed notes on what went wrong at her first stock-take for Sandgrouse Systems Co, Aïssatou Diallo now builds a general rule for planning future counts. Which stage of Kolb's learning cycle best describes this step?
32 Omar Hassan insists on reading the full manual and understanding the principles and models behind a new accounting package before he will use it. Which Honey and Mumford learning style best explains his preference?
33 Following a 10% pay rise at Plover Retail Co, staff complaints fell but productivity did not improve. According to Herzberg, which statement best explains this result?
34 Ngozi Adeyemi decides on a new filing procedure herself and then explains its benefits to her team to win their commitment before it starts. Which Ashridge leadership style is she using?
35 Weeks of duplicated effort and missed deadlines in the payables team of Barbet Enterprises Co have gone unaddressed. Which consequence for the organisation is MOST likely?
36 Which sign MOST clearly shows that the budgeting team at Egret Pharma Co is working ineffectively and should prompt its manager to act?
37 Two department heads at Falcon Solutions Co disagree over a shared training budget. By redesigning the training timetable, they find a solution that fully meets the needs of both departments. Which conflict-handling approach best describes this outcome?
38 Which TWO situations at Hoopoe Retail Co are MOST likely to cause conflict between staff or departments? Select TWO.
39 Each quarter a senior partner at Turaco Systems Co, from outside Neema Mushi's department, meets her to discuss her long-term career goals and professional growth. Which description of this arrangement is MOST appropriate?
40 Which communication pattern best explains how a brainstorming team at Kestrel Digital Solutions Co is working, if each member can communicate directly with each of the others and no central person controls the flow of ideas?
41 Hodan Warsame, an ACCA member at Egret Pharma Co in Addis Ababa, is told by her manager to backdate sales invoices to meet a bonus target. After raising it with him without success, to whom should she MOST appropriately report the matter next?
42 Which TWO features MOST appropriately distinguish accountancy as a profession, such as the one Moussa Traoré of Lovebird Media Systems Co joined when he qualified in Senegal? Select TWO.
43 Salma Benali, an accountant at Falcon Solutions Co in Rabat, is asked by her brother, who owns a supplier, to score his tender more favourably in her evaluation. Which fundamental principle is MOST at risk?
44 For eleven years Tendai Moyo has led the audit of Flamingo Construction Co, and he plays golf each week with its finance director. Which threat to Tendai's compliance with the fundamental principles is the MOST appropriate description of this situation?
45 Crowned Crane Construction Co has appointed an audit firm whose staff also prepared the company's financial statements this year. Which safeguard would be MOST effective against the resulting self-review threat?
46 Although she has never studied lease accounting, Wanjiru Kamau, a payroll accountant at Hornbill Energy Co in Nairobi, is asked to prepare the lease figures under IFRS 16 by Friday. Which fundamental principle should guide her response?

Case 1: Kingfisher Cold Logistics Co

Kingfisher Cold Logistics Co operates refrigerated warehouses in Nairobi and Mombasa, Kenya, storing fresh produce, dairy and medicines for supermarkets and exporters. Revenue comes from renting chilled pallet space, charged per pallet-day.

In January the company raised its price from KES 400 to KES 460 per pallet-day. Monthly demand then fell from 12,000 to 9,840 pallet-days. Managing director Jelani Mwangi wants to know whether the price rise was wise.

Economic background reported by the finance team:

  • The Central Bank of Kenya has raised its policy interest rate from 10.0% to 12.5% to bring inflation back towards target.
  • Inflation is 8%, driven mainly by higher prices for imported fuel and electricity, which have raised the cost of running refrigeration units.
  • Kingfisher has a variable-rate bank loan of KES 150 million used to build its Mombasa site.

A market study commissioned by Kingfisher found that Kenya's urban population is growing by about 4% a year, that more households now shop in supermarkets rather than open-air markets, and that a growing middle class is buying more chilled and frozen food. The study expects these trends to continue for at least ten years.

47 Jelani Mwangi asks what the price elasticity of demand for Kingfisher Cold Logistics Co's pallet space was over the January price change. Which answer, and conclusion, is MOST appropriate?
48 Which TWO statements about the economic background facing Kingfisher Cold Logistics Co are correct? Select TWO.
49 Based on the market study, which long-term effect of these social and demographic trends is MOST likely for Kingfisher Cold Logistics Co?

Case 2: Ibis Learning Group Co

Ibis Learning Group Co runs seven private primary and secondary schools in Addis Ababa and Hawassa, Ethiopia, with 5,400 pupils and annual fee income of ETB 310 million. It was founded twenty years ago by Dr Hiwot Gebre, who is chief executive and chairs the board.

Culture. Every school displays the Ibis crest, pupils wear the same green uniform, and a wall of trophies greets visitors. The published staff charter states the values 'Excellence and Care'. Long-serving teachers say, though it is written nowhere, that everyone knows national exam results are what really count.

Governance. The board has five members, all executives of the company. Dr Hiwot sets her own salary and bonus, which rose by 40% last year while teachers' pay rose by 6%. A private equity fund that bought 35% of the shares last month has asked for governance reforms before it invests further.

Community. A survey by the Hawassa school found that around 60% of local families cannot afford Ibis fees, and the city council has asked private schools to widen access for able pupils from low-income homes. Parents also want less use of single-use plastics in school canteens.

50 In Schein's model of culture, the unwritten belief at Ibis Learning Group Co that national exam results are what really count is an example of which level?
51 The private equity investor wants Ibis Learning Group Co to strengthen its corporate governance. Which TWO steps are MOST appropriate? Select TWO.
52 Which corporate social responsibility initiative MOST appropriately addresses the community needs identified at Ibis Learning Group Co's Hawassa school?

Case 3: Sunbird Mobile Retail Co

Sunbird Mobile Retail Co sells phones, airtime and accessories through 40 shops across Dakar and Thiès, Senegal. Last year it moved its point-of-sale and inventory system to a cloud software-as-a-service package, which staff reach through a web log-in using only a username and password.

Security incident. In March a shop supervisor clicked a link in an email that appeared to come from the software provider and entered her log-in details. Within an hour, an outsider used those details to change the bank account for supplier payments.

Suspected fraud. Internal audit found that the manager of the Thiès shop, who is known to be heavily in debt, has been selling phones for cash without recording the sales. The shop has had no surprise stock counts for two years, and the manager both receives deliveries and records inventory.

Extract from the statement of financial position at 31 December (XOF million):

  • Inventory: 180
  • Trade receivables: 95
  • Cash: 25
  • Trade payables: 150
  • Bank overdraft: 50

Finance manager Aïssatou Ndour has been asked to report the company's liquidity position to the board.

53 When an outsider used a supervisor's stolen log-in at Sunbird Mobile Retail Co, which protection would have been MOST effective at stopping the access?
54 In terms of the conditions for fraud, what does the absence of stock counts at Sunbird Mobile Retail Co's Thiès shop, together with the manager's combined duties, represent?
55 When Aïssatou Ndour reports liquidity to the board, which current ratio and quick ratio should she give for Sunbird Mobile Retail Co, using the extract?

Case 4: Weaver Cashew Enterprises Co

Weaver Cashew Enterprises Co processes raw cashew nuts into graded kernels for export at a factory in Mangochi, Malawi. It employs 320 workers, mostly paid a piece rate of MWK 45 per kilogram of kernels shelled, organised into eight lines each led by a line leader.

Kernel yield has fallen and breakages have risen. A new factory manager, Chikondi Mbewe, was appointed in June. She says a good manager must attend to three things at once: achieving the output target, holding each line together as a team, and meeting the needs of individual workers.

Staff survey. Workers said the canteen and rest rooms were poor, but most said what they wanted above all was recognition when their line did well and more say over quality on their own line.

Appraisal. Once a year each line leader tells workers the rating they have been given and then tries to persuade them to accept an improvement plan. Workers say they have no chance to give their own view, and several now dread the meeting.

Chikondi has budgeted MWK 12 million for changes this year and wants to target it where it will most improve performance.

56 Which appraisal approach are the line leaders at Weaver Cashew Enterprises Co using in their annual meetings?
57 Chikondi Mbewe wants to raise motivation at Weaver Cashew Enterprises Co. Which TWO changes would Herzberg classify as motivators? Select TWO.
58 Which leadership theory best explains Chikondi Mbewe's view of what a good manager at Weaver Cashew Enterprises Co must attend to?

Case 5: Stork Building Solutions Co

Stork Building Solutions Co distributes cement and building materials from three depots in Casablanca, Fès and Marrakesh, Morocco, to about 1,500 contractors. Annual revenue is MAD 420 million.

Sales coordinator. Nadia Alaoui coordinates orders across the three depots. She says she is overwhelmed: she answers every email as it arrives, accepts extra tasks from colleagues, and works on whatever lands on her desk first. Last week she missed a deadline to confirm a MAD 3 million order for a hospital project while she reformatted a colleague's presentation.

Development. At her review, Nadia and her manager agreed that her weakest area is spreadsheet analysis, which she needs for demand forecasting, and that she should draw up a personal development plan.

Information. Each depot sends head office a daily stock report. The reports are accurate and complete, but they are compiled manually and reach head office two days after the date they describe, by which time many orders have already been promised to customers from stock that has since run out.

59 Nadia Alaoui wants to improve her time management at Stork Building Solutions Co. Which action is MOST appropriate for her to take first?
60 Which development objective for Nadia Alaoui's personal development plan at Stork Building Solutions Co is MOST appropriately SMART?
61 Depot stock reports at Stork Building Solutions Co are failing their users. Which attribute of good information best explains why?

Case 6: Heron Hospital Pharma Co

Heron Hospital Pharma Co runs twelve pharmacies inside private hospitals in Nairobi and Kisumu, Kenya. Its finance manager, Kiprono Langat, is an ACCA member.

Code of ethics. After a newspaper story about pharmacists accepting trips from drug companies, the board has decided to publish a corporate code of ethics. A working group has been asked to propose its contents.

Year-end. At the year-end count, medicines costing KES 18 million were found to be past their expiry date. Kiprono prepared a write-off. The chief executive told him that the write-off would push the company below the profit target in its bank loan agreement, and added that 'people who are not team players do not have their contracts renewed'. He asked Kiprono to delay the write-off until next year.

Data request. A drug marketing agency has asked Kiprono for a report of prescriptions dispensed at each pharmacy, broken down by patient age and condition, to help target its advertising. The agency has offered no payment, and Heron's patients have not been asked for consent.

62 Which TWO items are MOST appropriate to include in the corporate code of ethics being drafted by the working group at Heron Hospital Pharma Co? Select TWO.
63 The chief executive's comment to Kiprono Langat about contract renewal at Heron Hospital Pharma Co creates which threat to compliance with the fundamental principles?
64 If Kiprono Langat sends the agency the requested prescription report, which fundamental principle would Heron Hospital Pharma Co's finance manager MOST directly breach?

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