Mock exam mistakes

Question 1

Is a strategic alliance a separate legal entity?

Answer 1

No

Question 2

What components make up a financial system?

Answer 2

Markets
Securities
Intermediaries

Question 3

What happens to supply and demand when factor costs rise?

Answer 3

Both contract

Question 4

What does a redistribution of wealth address?

Answer 4

Lack of equity

Question 5

What is a distributed ledger?

Answer 5

System that allows people who don’t know each other to trust shared record of events

Question 6

What do management controls include?

Answer 6

All aspects of business management

Question 7

Where are bonds sold?

Answer 7

Capital and secondary market

Question 8

What is supply side economics?

Answer 8

Behaviour of AS curve

Question 9

What should be the make up of a board?

Answer 9

1/2 the board needs to be NEDs, therefore 5

Question 10

What security measures are applied to digital assets?

Answer 10

Encoding
Encryption
Watermarks

Question 11

What are 2 disadvantages being a sole trader?

Answer 11

Floating charge cannot be used to secure borrowing

Owner has unlimited liability

Question 12

What are 3 characteristics of management accounting information?

Answer 12

Looks forward and backwards

Likely to include cash flow

Likely to include budgeting info

Question 13

What methods can be used by a company to obtain a new London Stock Exchange listing for its shares?

Answer 13

Offers for sale

Placing

Offer for subscription

Question 14

If the agency problem is behind the need for sound corporate governance, who is the principal?

Answer 14

Shareholders

Question 15

What are 3 characteristics of perfect competition?

Answer 15

Suppliers earn normal profits

Consumers lack influence over market price

Single selling price

Question 16

Is bulk buying a source of economies of scale?

Answer 16

Yes

Question 17

In addition to a fine, what is a punishment for collusion?

Answer 17

Innovation

Question 18

The market for a product is a natural monopoly. Production of the product must be associated with:

Answer 18

low marginal costs

Question 19

Does the use of advanced accounting software reduces the need for auditors to audit transactions and verify the ownership of assets.

Answer 19

Yes

Question 20

The use of advanced accounting software reduces the need for auditors to audit transactions and verify the ownership of assets.

Answer 20

Yes

Question 21

Alain is a Manager with Glasnow Ltd. He always looks for opportunities to praise his subordinates
and takes great pleasure in promoting staff who perform well. As far as his subordinates are concerned, Alain’s actions meet their:

Answer 21

Status/ego needs

Question 22

What suggests that increased spans of control are possible?

Answer 22

Subordinates carry out very similar tasks

Question 23

How is cyber risk classified?

Answer 23

Operational risk

Question 24

Stewardship of the organisation’s financial resources is part of which of its finance function’s tasks?

Answer 24

Recording financial transactions

Question 25

The finance director of Boiled Sweets plc wants to specify the levels of performance that underpin the company’s control system. What are the main components of the company's control system?

Answer 25

Measurement of actual performance and comparison against targets Establishment of standards or targets to express planned performance Follow-up action to correct adverse results or to exploit favourable variances

Question 26

What is true about an overdraft facility?

Answer 26

Legal documentation is minimal in comparison with other types of loan. The facility is repayable on demand. Assets are not normally required as security.

Question 27

What is the inability to finance the credit given to customers?

Answer 27

Liquidity risk

Question 28

What measure of spread is most useful when comparing the risk of two data sets, where the values of the data in the first set are much smaller than the values of the data in the second set?

Answer 28

Coefficient of variation

Question 29

what are 3 market imperfections associated with financial markets

Answer 29

Information asymmetry Transaction costs Insider dealing

Question 30

What is true of companies that adopt the Water Principles?

Answer 30

They must apply the principles and explain how they have applied them. They do not need to follow the guidance.

Question 31

What is an IS that combines data and analytical models to help with semi-structured and unstructured problem solving of an operational nature.

Answer 31

Decision Support system

Question 32

What are 3 ways in which data analytics of big data can create value for a business?

Answer 32

Risk management Innovation Performance improvement