Practice by paper · Finance & Accounting
ACCA BT: Business and Technology Practice Questions
45 original practice questions for ACCA Business and Technology (BT), written for this site with full explanations. They are original questions in the style of the syllabus - not taken from any official exam. Use them to test coverage, then confirm details against ACCA's official materials.
Answered 0 · Correct 0
-
What is the key legal difference between a limited company and a sole trader?
Correct answer: A. A limited company has its own legal personality: it can own assets, sue and be sued, and its shareholders are normally liable only for the amount they invested. A sole trader is not legally separate from the business, so the owner is personally liable for its debts. Company shareholders often appoint directors rather than managing personally, and only companies (not sole traders) can issue shares. -
Which type of organisation is owned by its members and run primarily for their mutual benefit rather than to maximise profit for outside investors?
Correct answer: C. A co-operative is owned and democratically controlled by its members (for example customers or employees), and surpluses are used for their mutual benefit. A public limited company is owned by shareholders seeking a return on investment, a sole trader is owned by one individual, and a government ministry is part of the public sector and is not member-owned. -
A 'tall' organisation structure is characterised by:
Correct answer: B. A tall structure has many layers in the hierarchy, and because each manager supervises only a few people, spans of control are narrow. Few levels with wide spans describes a flat structure. Tall organisations still have a formal hierarchy, and one manager supervising everyone directly would be an extreme flat arrangement, not a tall one. -
In Mintzberg's model of organisational structure, which component is responsible for standardising work processes by designing systems, procedures and controls?
Correct answer: D. The technostructure consists of analysts (such as planners and accountants designing systems) who standardise work processes, outputs and skills. The strategic apex sets overall direction, the operating core performs the basic work of producing goods or services, and the middle line connects the apex to the core through the management hierarchy. -
Which of the following is a well-recognised disadvantage of a matrix organisation structure?
Correct answer: C. A matrix structure overlays project or product management onto functional management, so staff answer to two bosses; this dual authority can produce conflicting demands, ambiguity and stress. Functional departments continue to exist within the matrix, communication across functions generally improves rather than worsens, and matrix structures are typically used in larger, complex organisations. -
Which of the following is an advantage of centralising decision-making authority?
Correct answer: A. Centralisation concentrates decisions at the top, which promotes consistency, coordination and economies of scale, and avoids duplicated effort across units. Faster local response, development of junior managers and decisions taken closer to the customer are all classic advantages of decentralisation, not centralisation. -
What is a shared services centre?
Correct answer: D. A shared services centre brings support processes that were previously duplicated across divisions, such as payables processing or payroll, into one internal unit that serves the entire organisation, cutting cost and standardising quality. Handing the work to an external company is outsourcing rather than shared services, a profit centre selling to outside customers is a different concept, and a shared services centre is a permanent unit, not a temporary team. -
A company removes two layers of middle management, so each remaining manager supervises far more staff. Which outcome is most likely?
Correct answer: B. Delayering flattens the structure: with fewer levels, messages travel between top and bottom more quickly, but spans of control widen, so each manager must supervise more people and may need to delegate more. Spans widen rather than narrow, middle management promotion routes are reduced because posts are removed, and there are fewer levels for information to pass through, not more. -
A small consultancy is dominated by its founder, who takes all significant decisions personally, and there are few written rules. Using Handy's classification, which culture is this, and what is its typical weakness?
Correct answer: B. Control radiating informally from a dominant central figure, with few procedures, is Handy's power culture; it allows fast decisions but depends heavily on that individual's judgement and capacity, so it struggles as the organisation expands. A role culture is rule-bound and bureaucratic, a task culture organises around project teams, and a person culture exists to serve the individuals within it, none of which matches this description. -
Corporate governance is best defined as:
Correct answer: D. The classic definition, associated with the Cadbury Report, is that corporate governance is the system by which companies are directed and controlled, covering the roles of the board, shareholders and other stakeholders. Preparing financial statements, overseeing marketing and managing tax are individual management activities, not the overall governance framework. -
What is the main contribution of non-executive directors to a board?
Correct answer: A. Non-executive directors are not part of the full-time management team, so their value lies in bringing independent judgement, outside experience and challenge to the executives' proposals, particularly on strategy, performance and risk. Day-to-day operations are run by executives, management accounts are prepared by the finance function, and no director can guarantee profits. -
Which board committee normally oversees the company's relationship with its external auditors?
Correct answer: C. The audit committee, made up of non-executive directors, typically recommends the appointment of the external auditors, agrees their fees, monitors their independence and discusses audit findings with them. The remuneration committee deals with directors' pay, the nomination committee with board appointments, and the executive committee with running the business. -
Why do governance codes generally recommend that the roles of chairman and chief executive be held by different people?
Correct answer: D. Combining the leadership of the board (chairman) with the leadership of the business (chief executive) concentrates power in one person and weakens the board's ability to challenge management, so codes recommend splitting the roles. The recommendation is about balance of power, not saving salary costs, dividend rules or the speed of decisions. -
In the context of a company, the 'agency problem' refers to the risk that:
Correct answer: B. In companies, ownership (shareholders as principals) is separated from control (directors as agents), and the agents may prefer their own interests, such as higher pay or empire building, over shareholder value; governance mechanisms exist to reduce this risk. Shareholder interference, staffing agencies and bank credit decisions are not what the agency problem describes. -
Under good governance practice, who should decide the remuneration packages of a listed company's executive directors?
Correct answer: C. Governance codes recommend a remuneration committee of independent non-executive directors so that no director is involved in setting his or her own pay. Executives deciding their own packages is precisely the conflict the committee exists to avoid; shareholders typically vote on the remuneration policy or report rather than setting individual packages, and the external auditor has no role in setting pay. -
Which of the following is a typical responsibility of an audit committee?
Correct answer: A. Audit committees oversee financial reporting integrity, internal control and risk systems, internal audit, and the relationship with the external auditor. Bonuses are the remuneration committee's territory, senior operational appointments involve the nomination committee and the board, and budget preparation is a management task, not a non-executive oversight task. -
Which statement correctly describes a principles-based approach to corporate governance?
Correct answer: A. A principles-based code, such as the UK Corporate Governance Code, operates on 'comply or explain': companies should follow the provisions or explain their alternative arrangements to shareholders, who judge the explanation. Legally binding rules with automatic penalties describe a rules-based regime such as key parts of the US Sarbanes-Oxley framework, such codes are aimed principally at listed companies, and they increase rather than remove disclosure. -
Which of the following is the best example of an agency cost borne by shareholders?
Correct answer: D. Agency costs are the costs of the separation of ownership and control, including monitoring costs incurred so that shareholders can check what their agents are doing; the external audit is a classic monitoring cost. Loan interest is a financing cost, dividends are a distribution of profit to the owners themselves, and production wages are an ordinary operating cost. -
The primary purpose of management accounting is to:
Correct answer: B. Management accounting serves internal users: it produces budgets, costings, forecasts and performance reports that help managers plan, control and decide. Statutory statements for shareholders are the product of financial accounting, tax returns are a tax compliance task, and independent opinions on the accounts are given by external auditors. -
Which part of the finance function is normally responsible for recording sales invoices and chasing overdue customer balances?
Correct answer: C. The receivables (sales) ledger team records invoices issued to customers and maintains customer account balances, while credit control monitors and chases overdue amounts. Payroll deals with employee pay, treasury manages cash and funding, and internal audit reviews controls rather than processing transactions. -
Which of the following tasks falls within the treasury function of a large company?
Correct answer: C. Treasury manages liquidity: cash and bank balances, short and long-term funding, foreign currency and interest rate exposure. Statutory statements belong to financial accounting, employee tax deductions to payroll, and invoice approval to the purchasing and payables process. -
Which statement best distinguishes internal audit from external audit?
Correct answer: B. Internal audit is an internal (or co-sourced) function that examines risk management and controls for the benefit of management and those charged with governance, whereas external audit is an independent statutory examination of the financial statements for shareholders. Internal audit is generally not a legal requirement for every company while external audit often is for larger companies, external auditors must be independent rather than employees, and neither audit function prepares the financial statements. -
Which of the following situations shows a failure of segregation of duties?
Correct answer: D. Segregation of duties requires that authorisation, custody and recording of a transaction are split between different people; one person controlling ordering, approval and payment could place fictitious orders and pay themselves, so this is a clear failure. The other three options each involve two different people or teams sharing the stages of a process, which is exactly what segregation intends. -
The primary purpose of preparing a bank reconciliation is to:
Correct answer: A. A bank reconciliation identifies and explains differences between the cash book and the bank statement, such as unpresented cheques, outstanding lodgements, bank charges and errors, giving assurance that cash records are complete and accurate. It does not compute interest, it can highlight anomalies but cannot guarantee detection of all fraud, and it depends on the cash book rather than replacing it. -
The 'fraud triangle' identifies the three conditions generally present when fraud occurs. They are:
Correct answer: B. The fraud triangle holds that fraud typically requires a pressure or incentive (such as personal debt or aggressive targets), an opportunity (such as weak controls), and a rationalisation that makes the act feel justified to the perpetrator. Planning-execution-concealment describes how a fraud might be carried out rather than its preconditions, and prevention-detection-response describes an organisation's anti-fraud activities. -
Which of the following is a detective control rather than a preventive control?
Correct answer: A. Detective controls identify errors or irregularities after they have occurred, and a reconciliation does exactly that by surfacing differences for investigation. Authorisation limits, access passwords and segregation of duties are all designed to stop problems happening in the first place, which makes them preventive controls. -
Which statement about an external audit of a company's financial statements is correct?
Correct answer: C. External audits are conducted on a test basis using materiality and professional judgement, so they provide reasonable assurance rather than certainty. Audits cannot guarantee the absence of fraud, especially collusive fraud; the going concern review considers the appropriateness of the basis of preparation rather than guaranteeing survival; and auditors sample transactions rather than verifying every one. -
In a PESTEL analysis of the external environment, interest rates, inflation and exchange rates belong to which category?
Correct answer: D. PESTEL groups macro-environmental influences into Political, Economic, Social, Technological, Environmental and Legal categories, and interest rates, inflation and exchange rates are core economic variables affecting demand and costs. Political factors cover government policy and stability, technological factors cover innovation and infrastructure, and legal factors cover legislation and regulation. -
Which of the following is NOT one of Porter's five forces shaping industry competition?
Correct answer: D. Porter's five forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and rivalry among existing competitors. Technological change is an important environmental influence, and it can affect several forces, but it is not itself one of the five forces. -
Which of the following best describes a key benefit of cloud computing for a business?
Correct answer: C. Cloud services let a business rent storage, processing power and applications from a provider, scaling capacity up or down with demand and converting large capital outlays into operating costs. Security risks change form rather than disappear, cloud access depends on connectivity, and providers offer service level commitments rather than an absolute guarantee of zero downtime. -
The characteristics classically used to describe 'big data' are:
Correct answer: A. Big data is usually characterised by the three Vs: volume (very large quantities), velocity (generated and processed at high speed) and variety (structured and unstructured forms such as text, images and sensor feeds); veracity is often added as a fourth. The other options list bookkeeping records, pricing concepts and a generic systems model, none of which describes big data. -
Which types of finance-function task are most readily taken over by robotic process automation (RPA)?
Correct answer: B. RPA software follows defined rules to process structured data, so it suits repetitive, high-volume tasks with clear steps, such as matching invoices to orders, posting transactions and reconciliations. Judgement-based policy choices, strategic decisions and negotiation rely on interpretation and human interaction, which rule-based automation does not replace. -
What is 'phishing'?
Correct answer: A. Phishing uses deceptive emails, texts or websites that impersonate trusted parties to lure users into disclosing credentials or installing malware. Encrypting files for payment is ransomware, flooding a server is a denial-of-service attack, and automated password guessing is a brute-force attack. -
Which of the following best describes a blockchain (distributed ledger) and its potential relevance to accounting records?
Correct answer: B. A distributed ledger is replicated across multiple parties, and new transactions are added through a validation mechanism that links records together, making retrospective alteration very difficult; this tamper-resistance is why it interests accountants for areas like supply chain records and transaction histories. It is the opposite of a single-user private file, it changes rather than eliminates assurance work, and it is a record-keeping technology, not merely a retail card network. -
A rise in interest rates increases financing costs across an economy. In a SWOT analysis prepared by a heavily indebted retailer, this development would most appropriately appear as:
Correct answer: D. In SWOT, strengths and weaknesses are internal attributes of the organisation, while opportunities and threats are external developments; a macroeconomic rate rise is external and potentially damaging to a highly indebted firm, so it is a threat. Classifying it as a weakness is the classic error of mixing external events into an internal category; the company's high debt level itself would be the related internal weakness. -
Which measure primarily protects the confidentiality of data transmitted over public networks?
Correct answer: C. Encryption converts data into a form that is unreadable without the decryption key, so even if a transmission is intercepted the content stays confidential. Backups protect availability and recoverability, an uninterruptible power supply protects availability during power failures, and disk defragmentation is a performance measure with no confidentiality effect. -
Which option correctly lists the five fundamental principles of the ACCA and IESBA codes of ethics?
Correct answer: C. The five fundamental principles are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Independence and professional scepticism are related concepts that support objectivity, particularly in audit work, but they are not among the five fundamental principles, and the other lists mix general virtues that do not match the code. -
The fundamental principle of integrity requires an accountant to:
Correct answer: D. Integrity means being straightforward and honest, and not being associated with information the accountant believes is false or misleading. Keeping information confidential is the separate principle of confidentiality, which itself has exceptions; complying with tax law is only one aspect of professional behaviour; and maximising profit is not an ethical principle at all. -
An accountant is asked to review and sign off financial schedules that she herself prepared in a previous role in the same organisation. Which ethical threat arises most directly?
Correct answer: B. Evaluating work you previously performed creates a self-review threat: people are naturally reluctant to find fault with their own output. A self-interest threat arises from financial or personal interests, an intimidation threat from actual or perceived pressure, and an advocacy threat from promoting a client's or employer's position, none of which is the direct issue here. -
Which statement about the principle of confidentiality is correct?
Correct answer: A. Confidentiality is not absolute: disclosure is allowed when authorised by the client, and permitted or required by law, for example reporting suspected money laundering to the appropriate authority or complying with a court order. Absolute secrecy is therefore incorrect, and sharing information socially or selling it would breach the principle regardless of any promise of secrecy. -
A partner has led the relationship with the same major client for many years and has become close friends with its finance director. Which safeguard most directly addresses the resulting threat?
Correct answer: B. A long, close association creates a familiarity threat, and the standard safeguard is rotating the senior personnel involved so that fresh, independent eyes take over the relationship. Raising fees does nothing to reduce familiarity, accepting hospitality would increase the threat, and the threat depends on the closeness of the relationship, not merely the client's size. -
What is the essential feature of the conceptual framework (threats and safeguards) approach to professional ethics?
Correct answer: C. The conceptual framework approach recognises that no rulebook can anticipate every circumstance, so it requires accountants to identify threats to the fundamental principles, evaluate their significance and respond, by applying safeguards, or by declining or ending the engagement where threats cannot be reduced to an acceptable level. It is the opposite of an exhaustive list, it applies to accountants in business as well as in practice, and it depends on judgement rather than replacing it. -
Which of the following situations creates an intimidation threat?
Correct answer: A. An intimidation threat arises when an accountant is deterred from acting objectively by actual or perceived pressure, and threatening someone's job to force misleading accounting is a direct example. A long close friendship creates a familiarity threat, fee dependence creates a self-interest threat, and reviewing your own work creates a self-review threat. -
An accountant discovers that her employer is deliberately understating provisions to inflate profit. She has raised it with her manager and the finance director, without result. What is the most appropriate next step?
Correct answer: D. The professional response is to exhaust internal escalation, for example to the audit committee or those charged with governance, take confidential advice from the professional body or a lawyer, keep a record of actions taken, and ultimately consider resigning if the misstatement stands; legal disclosure obligations may also apply. Public social media disclosure would breach confidentiality rather than follow proper channels, loyalty never overrides the fundamental principles, and secretly changing figures fails to address the underlying manipulation. -
Which statement best captures the relationship between objectivity and independence?
Correct answer: D. Objectivity is the state of mind of not letting bias, conflicts of interest or undue influence override judgement, while independence comprises both independence of mind and independence in appearance, and it exists to protect and demonstrate objectivity, especially in assurance work. The two concepts are related but distinct, independence is most critical in audit rather than irrelevant to it, and objectivity concerns freedom from bias, not arithmetic.
Practise another paper
Practice questions FAQ
- Are these real ACCA BT exam questions?
- No. These are original study questions written to test understanding of the syllabus. They are not real exam questions, exam dumps, or copied from any provider.
- How should I use these BT practice questions?
- Answer each one, read the explanation (including why the wrong options are wrong), and use the per-area score below to focus your revision. Revisit before exam day.
- Is this enough practice for BT?
- Treat it as a concept check, not a full mock. Pair it with past papers and specimen exams from ACCA and approved content providers - the real paper also tests longer, applied question styles.
- What score means I am ready?
- A good signal is consistently scoring around 80% or higher across every syllabus area on questions you have not seen before, and being able to explain why the wrong options are wrong.
- Should I use exam dumps?
- No. Dumps (real or leaked questions) breach provider policy, can void your qualification, and do not build the understanding the exam actually tests.