Tag: Profit Making

Accounting Multiple Choice Question – 26 July 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Which of the following business structures necessarily has a legal identity that is separate from that of its owners or owners?

Select ONE answer:

  1. A joint venture between two separate limited liability companies
  2. A general partnership
  3. A limited liability partnership
  4. A strategic alliance

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct –> Only the limited liability partnership necessarily exists as an entity separate from its owners. A general partnership is not a separate legal entity from the partners. A joint venture between two limited liability companies is usually another limited company with 50/50 ownership but does not necessarily have to be established in that way. A strategic alliance is an informal contractual or minority cross shareholding arrangement and normally no separate company is formed.
  4. Not correct

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Accounting Multiple Choice Question – 25 July 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Alex plc wishes to expand abroad.

It has decided to agree with a foreign manufacturer of a complementary product to market both products jointly in both countries.

What method of expansion has the company decided on?

Select ONE answer:

  1. A group structure
  2. A joint venture
  3. A strategic alliance
  4. A licensing agreement

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct –> A group structure (A) implies one company owning one or more subsidiaries. A joint venture (B) implies that a third-party business is set up and owned by the joint venturers. A strategic alliance (C) is ”informal” co-operation, while a licensing agreement (D) involves giving permission to another company to manufacture or sell a product, or to use a brand name. In this circumstance, there is no new separate legal company, as would be expected for a joint venture, and no evidence of a licensing agreement. The two companies have instead agreed to enter into a loose and probably short-term strategic alliance.
  4. Not correct

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Accounting Multiple Choice Question – 24 July 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Alex Ltd is facing a period of rapid change and innovation in its operating markets.

According to Tom Burns and G M Stalker, which THREE of the following should the company seek to adopt in order to be effective in its business environment?

A A Theory X management style
B A Theory Y management style
C A wide, flat organisational structure
D A tall, narrow organisational structure
E Extensive use of delegation
F Limited use of delegation

Select ONE answer:

  1. ABC
  2. CDF
  3. BCE
  4. DAE

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct –> In times of change, the Theory Y manager (B) recognises that the employees’ objectives will complement those of the organisation and commitment is a function of the ‘intrinsic’ rewards associated with their achievement (rather than just extrinsic rewards/punishments). The capacity to exercise imagination, ingenuity and creativity in the solution of organisational problems needs to be widely rather than narrowly distributed in the workforce. Wide, flat organisations (C) tend to be flexible, and employees are willing to form teams to tackle issues. Wide, flat organisations also imply a large amount of delegation (E) is needed.
  4. Not correct

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Accounting Multiple Choice Question – 23 July 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Alex plc is a modern manufacturing operation.

It uses components manufactured by suppliers and sub-contractors all over the world to assemble finished goods to customer specifications in its assembly plant.

Operations managers are technically competent and their competence within the area of their expertise is rarely questioned.

There is a high degree of specialisation of labour and procedures ensure that, regardless of who carries out tasks, they are executed in the same way each time.

From this description of Alex plc, identify which of the following statements about the company are likely to be true.

I Innovation is suppressed.
II Employees are concerned with completing the task efficiently, rather than with how the task can be improved upon for the benefit of the organisation.
III Everyone in the organisation finds it easy to learn from their mistakes.

Select ONE answer:

  1. Statements I and II
  2. Statements II and III
  3. Statements I and III
  4. Statements I and II and III

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct –> The company could be described as a bureaucracy or mechanistic organisation. As well as innovation being suppressed (statement I), this type of structure can inhibit creativity, initiative and openness to new ideas and ways of doing things. People would certainly be concerned with completing the task efficiently (statement Il) – task specification and efficiency is a feature of a bureaucratic design. Jobs are generally broken down into narrow areas of work/responsibility to secure the benefits of specialisation. In bureaucracies’ it is hard to learn from mistakes (statement III) due to the lack of feedback (especially upwards).
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 22 July 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Tom Burns and G M Stalker classified organisations as ‘mechanistic’ or ‘organic’.

Which of the following is an appropriate description of a mechanistic organisation?

Select ONE answer:

  1. Commitment to organisation’s mission
  2. Network structure of control
  3. Relatively flexible job descriptions
  4. Suitable for slow moving environments

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – Mechanistic organisations are machine-like and efficient at performing the same task over and over, implying a slow-moving environment. Organic organisations are flexible and adaptable (like a living organism), implying they are suitable for dynamic environments. Employees working for a mechanistic organisation are expected to obey superiors, whereas for those working for an organic organisation, commitment to mission is more highly valued than loyalty as such. In terms of structure of control, the network structure is more prevalent in organic organisations as is the relatively flexible job descriptions. Precise job descriptions and hierarchical structure of control are typical features of a mechanistic organisation.

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