PRC-5 Question Bank Solved

Chapter 1
Nature of Business
1. A business is an organization that strives for by providing goods and services desiredby its
customers.
a. Profit
b. Satisfaction
c. Efficiency
d. All of the above
2. Which of the following is a Natural resource?

a. Farmhouse
b. Electricity
c. Coal
d. Building
3. The Board of Directors are the most powerful decision makers of a business. If this is true, what factor can influence
the decision of the Board of directors. Choose the best answer from the following:
a. Opinion of customers
b. Knowledge of the business
c. Employee feedback
d. Opinion of shareholders
4. Which of the following are not considered as External Stakeholders of a company?

a. lenders
b. shareholders
c. both correct
d. both incorrect
5. Which of the following is a reason why the government has an interest in all business organizations?
a. Businesses pay tax on profits, so government has an interest in company profitability.
b. Government wants to encourage business investments.
c. The government is interested in regulating business activity
d. All of the above
6. Business organizations buy goods and services from suppliers. Suppliers will usually agree to allow their
customers some credit only if:
a. Customer will pay what is owed and will not become bad debt
b. supplier has customer’s personal information
c. The government allows sales on credit.
d. The government gives a guarantee that it will provide subsidy on credit sales
7. Firms typically require financial support beyond the capital injected by the owners or their personal assets being used
in the business. Which stakeholder could be a source of funding for a new business?
PRC-5 Question Bank by Shahbaz Saeed ACA|1

a. Lenders and creditors
b. Banks
c. Both correct
d. Both incorrect
8. Which of the following are the advantages that a government of a free-market economy wouldrecognize and
allow businesses to be set up?
a. businesses serve consumers
b. businesses create work for the business owners and employees
c. businesses reduce the country’s unemployment
d. All of the above
9. Which of the following are the main concerns of shareholders in a business?

a. Falling profits and a falling share price
b. A proposal to invest in a major project where the business risk is high
c. A proposed takeover bid for another company or from another company
d. All of these
10. Managers in the middle and junior ranks of a management hierarchy might have ambitions to become senior
managers. Which of the following may be the interests of junior managers and other employees?
a. pay and working conditions
b. job security and satisfaction
c. Both correct
d. Both incorrect
11. Within a business organization, internal stakeholders can be categorized into groups. Which of the following are
NOT internal stakeholders?
a. Mr. Masood who owns 20% shares of the company
b. executive directors and senior managers
c. finance managers
d. Supplier of machinery
12. By using the ________________efficiently, a company can produce more goods and services with the same
resources.
a. Machinery
b. Human resources
c. Factory space
d. Factors of production
13. What is the key question to answer when developing a mission statement?
a. What is our business?
b. What is our value to the customer?
c. What will our business be?
d. All of the above
e. None of the above
14. _____________________ are the people who combine the inputs of natural resources, labor, and capital to

produce goods or services with the intention of making a profit or accomplishing a not-for-profit goal.
a. Factory labor
b. Employees
c. Directors
d. Entrepreneurs
15. What is the single element that sets a mission statement apart from a vision statement?
a. mission statement is present focused while vision statement is the future outlook
b. Mission statement is longer than a vision statement
c. Mission statement is shorter than a vision statement
d. Vision statements are considered to be more important than mission statements
16. Identify the correct hierarchy of Organizations’ goals:

a. Vision, Goals, Mission, Objectives
b. Mission, Vision, Goals, Objectives
c. Vision, Mission, Goals, Objectives
d. None of these
17. How many factors of production are there in a business?

a. Three
b. Four
c. Five
d. None of these
18. Which of the following are not internal stakeholders?

a. Board of directors
b. Shareholders
c. Non-executive directors
d. Employees
19. To prevent a company from being dominated by the personal interests of the executive directors, what kind of
stakeholders are added to the organization?
a. Non-executive director
b. Government
c. Both correct
d. Both incorrect
20. Customer buys a product/ service because he/ she believes to receive ___________ against the money.
a. Value
b. Respect
c. Convenience
d. Quality
21. Repayment installments of a loan comprise of:

a. Principal and interest
b. Principal and dividend
c. Both correct

d. Both incorrect
22. Generally, the Mission statement is issued by____________

a. Board of Directors
b. Government
c. SECP
d. General public
23. Machines, equipment, plant etc. are which kind of factor of production?
a. Capital
b. Natural resource
c. Goods
d. None of these
24. The investors who purchase stock are called _______

a. stockholders
b. shareholders
c. Both correct
d. Both incorrect
25. Shares are also called __________________

a. Stock
b. Securities
c. Both correct
d. Both incorrect
26. As per Mendelow's "power-interest matrix", the stakeholders who have low power but high interest in business,
should be:
a. Monitored only
b. Keep informed
c. Managed closely
d. Ignored
27. What kind of plans deal with day-to-day activities and targets?
a. Strategic
b. Tactical
c. Operational
d. Visionary
28. Labor unions have power to influence the business because they have:
a. Huge funds
b. Foreign investments
c. Claim on human resources
d. CEO in their pockets
29. Which one of the followings is not a connected stakeholder?

a. Non-executive directors

b. Major supplier
c. CEO of company
d. Major customer
30. Objectives should be:

a. Efficient
b. SMART
c. Effective
d. Understandable
31. Connected stakeholder means a stakeholder who:

a. is not a decision-maker
b. is not a part of the permanent (full-time) infrastructure of the organization
c. is nevertheless very influential in shaping the future of the organization and the decisions of its
leaders
d. All of these
32. _________ is the money a company receives by providing services or selling goods to customers.
a. Profit
b. Revenue
c. Both correct
d. Both incorrect
33. To earn profit, a person or organization needs ________ skills to plan, organize, and control the activities of
the business.
a. Management
b. Fighting
c. Negotiating
d. None of these
34. Company’s goals are an example of .

a. Overall purpose
b. General overall aim
c. Future outlook
d. Specific overall aim
35. The stake of is to achieve low level of unemployment.

a. Government
b. Local community
c. Both correct
d. Both incorrect
36. A company has a goal to double its profits in next 5 years. Which of the following might be relevant objectives to
achieve that goal?
a. Increasing revenue by 50% per year
b. Increasing production by 60% per year
c. Both correct

d. Both incorrect
37. “Enabling people to advance with confidence and success”, is the vision statement of---------------
a. Habib Bank Limited
b. Meezan Bank Limited
c. World Health Organization
d. None of these
38. The interests of executive directors and senior managers are affected by matters such as.
a. remuneration
b. power and status
c. career prospects
d. All of these
39. Power of top consultants and banker is example of --------------- --.

a. Position power
b. Claim on resources
c. Both correct
d. Both incorrect
40. On which of the following basis the standard of living among different countries is compared?
a. Quality of goods which is the priority of the customers
b. Factors of production that are the building blocks of business
c. Goods and services people can buy with the money they have
d. None of the above.
41. Which of the following statements is not true?

a. Owners are interested in Profit & growth of organization
b. Bondholders are interested in repayment of principal and interest
c. Both a & b
d. Media Pressure groups are internal stakeholders
42. An important aspect of managing business is creating purpose and providing clear messaging to stakeholders.
This can be done by creation of?
a. Sending email to all stakeholder
b. Creation of mission and vision statement
c. Updating shareholder on daily basis
43. Which of following statement if well written, should be short, simple, specific to the business, leave nothing
open to interpretation?
a. Mission statement
b. Vision statement
c. Both mission and vision statement are descriptive.
d. None of these
44. Select TWO most influential stakeholders generally found in an organization:

a. Shareholders
b. Board of Directors
c. Customers
d. Employees
45. With which of the following do operational plans and aims deal?
a. Action plan and targets
b. General overall aims
c. Detailed longer term targets
d. Implementation targets and budgets
46. Which of the following is more of an inspirational or motivational statement that is meant to drive
employees and also clearly demonstrate an organization’s goals to stakeholders?
a. Mission statement
b. Vision statement
c. Financial statement
d. Visionary statement
47. ___________ are derived from goals of an entity and are aims expressed in a form that can be measured
and should be time bound.
a. Mini goals
b. Mission
c. Objectives
d. Vision
48. Which of the following are usually the least interested stakeholders regarding profitability of business?
a. Customers
b. Shareholders
c. Top management
d. Executive officers
49. Which of the following is not a strategic decision?
a. Being a market leader in next 10 years
b. Hiring managers
c. Both are correct
d. Both are incorrect
50. Senior management and BOD take_____________
a. Tactical decisions
b. Strategic decisions
c. Operational decisions
d. None of these
51. Mardan Marbles (MM), a large Trading Company in KPK, buys its inventory from its sole supplier situated
in a foreign country. The supplier can impact MM due to___________
a. Marketing approach
b. Product’s Pricing to end consumers
c. Control over key resources
d. MM’s activities
52. Vision statement should be_____________?

a. Future outlook of organization
b. Left Open to interpretation
c. Both are correct
53. Which of the following is correct for executive directors?
a. Their remuneration depends on company’s performance
b. They bring new ideas to business as compared to non-executive directors
c. They are not actively involved in company’s operations
d. All of these
54. The Directors a company plans to maximize its sales and lead the market by end of next year. Which
TWO features of SMART Objectives are missing?
a. Specific
b. Timebound
c. Measurable
d. Realistic
55. Which of the following stakeholders are not influenced by remuneration and commission?
a. Executive Directors
b. Non-executive Directors
c. Both correct
d. Both incorrect

Chapter 2
Ownership of Business
1. Which one of the following can be a feature of an entrepreneurial organization?
a. Board of Directors take all the main decisions and delegates tactical decision-making to
subordinates
b. there is a formal management structure
c. operations and processes are likely to be complex and there is too much to handle fora single
owner
d. None of these
2. There are no legal formalities needed to set up a _________

a. Sole Proprietorship
b. Partnership
c. Private Limited Company
d. All of these
3. There are many advantages of setting up business as a sole-trader. Which of the following is not an
advantage?
a. Low cost of setting up
b. Combined Knowledge and Skills
c. Greater flexibility of decision making
d. Both a & c
4. Clubs and societies, non-governmental organizations, Cooperatives and Public sector organizations are
a. Social Organizations
b. Not-for-Profit Organizations
c. Revenue Organizations
d. Social sector Organizations
5. Which of the following can be run as registered or unregistered.

a. Limited Company
b. Sole proprietorship
c. Partnerships
d. None of these
6. Limited Liability Partnerships are incorporated and regulated under ?

a. Limited liability partnership act 2017
b. Partnership act 1932
c. Companies act 2017
d. Contract act 1872
7. Professionals such as lawyers, accountants, and architects often join together in generalpartnerships.
What is one distinctive feature of a general partnership over limited partnerships?
a. All partners are owners of the firm
b. Assets of the firm are divided as per the agreement between partners

c. All partners in a general partnership have unlimited liability
d. All of the above
8. The stockholders elect a to govern and handle the overall management of the
corporation.
a. Board of Directors
b. Board of Stakeholders
c. Both correct
d. Both incorrect
9. Companies must pay income taxes on their profits. In addition, any profits (dividends) paid to stockholders are
taxed as personal income. Which of the following terms explains this regulation on companies?
a. Double regulation
b. Double taxation
c. Unlimited taxation
d. Unlimited liability
10. Which of the followings is an advantage of sole owner/proprietor?

a. Difficulty in raising funds
b. Limited skills
c. Lack of continuity
d. Ease and low cost of formation
11. Find the correct advantage of partnership firm

a. Higher availability to raise funds
b. Dissolution of partnerships
c. Difference of opinion
d. Unlimited liability
12. An organization, which sometimes earns profits but its main purpose is public welfare only. Such organization
shall be called:
a. Business
b. Non-Profit Organization
c. Both are correct
13. Double taxation applies to:

a. Partnership firms
b. Limited Companies
c. Sole proprietor
d. All of these
14. Shareholders have the following rights:

a. Voting rights
b. Right to attend annual general meetings
c. Right to hold the management accountable
d. All of these

15. Profit when comes into the hands of the shareholders of the company, is called:
a. Drawings
b. Distributable profit
c. Owner's Expense
d. Dividend
16. In place of "Profit & Loss statement", Non-profit organization prepares:

a. Balance sheet
b. Cashflow statement
c. Notes to the accounts
d. Income & Expenditure account
17. If income of an NPO exceeds its expenses, it’s called ___________

a. Profit
b. Surplus
c. Both correct
d. Both incorrect
18. If expenses of an NPO exceeds its income, it’s called ___________

a. Deficit
b. Loss
c. Both correct
d. Both incorrect
19. A business that is co-owned by two or more people is referred to as a__________. The co-owners of the
business are called partners and they collectively form the_______.
a. Firm, partnership
b. Partnership, firm
c. Partnership, shareholders
d. Limited Liability, Company
20. Shareholders are also called:

a. Members
b. Owners
c. Stockholders
d. All of these
21. Law that deals with partnership businesses in Pakistan.

a. Partnership Act, 1932
b. Partnership Act, 2017
c. Business Act, 1932
d. Companies Act, 2017
22. In Clubs, the members are drawn towards_________

a. Specific common interest
b. Potential profits

c. Huge investments
d. None of these
23. The Government regulatory institution that deals with Companies registration and compliance is _____:
a. Registrar of Firms
b. Securities and Exchange Commission of Pakistan (SECP)
c. Prime Minister Office
d. None
24. Two types of Partnerships:

a. General & Limited
b. General & Specific
c. Both correct
d. Both incorrect
25. Public sector organizations are funded by the government to achieve ______
a. Growth in GDP of the country
b. National defense of the country
c. Political stability of the country
d. Overall social indicators of the country
26. __________ are association of persons who voluntarily come together to achieve acommon economic end
by making equitable contributions to raise capital and accepting afair share of risks and benefits
a. Partnership
b. Cooperatives
c. Non-government organization
d. Public sector organization
27. Social and sports clubs are examples of non-profit making organizations referred to as "clubs and societies",
the main source of their income is_________
a. Subscription
b. Government fund
c. Both correct
d. Both incorrect
28. To be successful a sole trader must do which of the following?

a. He must register his business with the government
b. He must exhibit strong leadership skills, be well organized, and communicate well with
employees
c. He must share his profits with the individual if any who manages his business
d. All of the above
29. Which of the following is the disadvantage of sole proprietorship?

a. Unlimited employees monitored by a single person
b. Strict government regulation because of its nature of business
c. Difficulty in finding qualified employees

d. All of the above
30. A ___________has at least one general partner, who assumes unlimited liability, and at least one limited partner,
whose liability is limited to his or her investment in the business.
a. General partnership.
b. Limited partnership
c. Limited liability partnership
31. A partnership where liability of all partners is limited.

a. Unlimited liability partnerships
b. General partnerships
c. Limited partnerships
d. Limited liability partnerships
32. The agreement to form partnership is called _____

a. Partnership contract
b. Partnership deed
c. Contract
d. Affidavit
33. Which of the following is not a type of Limited Company?

a. Private limited company
b. Single member company
c. Family limited company
d. Public limited company
34. Mr. X wanted to establish a single member company. How will he denote it?
a. X Textiles (Private) Limited
b. X Textiles (SMC-Private) Limited
c. X Textiles Limited
d. X Limited Liability Corporation
35. A company created through a Charter consists of three components. Which of the followingis least likely to
be a component?
a. Government
b. Management
c. Stockholders
d. Directors
36. Which of the following is true about a partnership?

a. All partners have invested an equal amount of capital
b. A partnership requires at least three people
c. Partnerships do not get favorable tax treatment compared to limited company
d. All partners are personally and severally liable for the debts of the business
37. What is the meaning of the word limited in the name of a limited company?

a. The number of shareholders is limited to 50
b. The liability of the company for its own debts is limited
c. The liability of shareholders for the company debts is limited and they are not liable for Company’s debts
d. There is a limit on the amount of debts that the company can contract
38. A___________________business is one in which income is generated by the resale of product?

a. Manufacturing
b. Trading/ Merchandising
c. Sole Proprietorship
d. Partnership
39. Which of the following documents contains offer to subscribe shares?

a. Memorandum of Association
b. Articles of Association
c. Prospectus
d. Statutory Declaration
40. The owners of a partnership business are known as_______

a. Proprietors
b. Partners
c. Shareholders
d. Managers
41. In which type of business the owner and his business are not considered same in the eyes of law?
a. Sole proprietorship
b. Limited companies
c. Partnership
d. a&c
42. Which of the following forms of business does not protect owners from business creditors?
a. Partnership
b. Sole proprietorship
c. Limited liability company
d. Both a & b
43. The capital of a company is divided into number of parts each one of which are called ________
a. Share
b. Dividend
c. Profit
d. Interest
44. In which case a sole ownership is the most favorable?

a. Large Scale Operations
b. Medium Scale Operations
c. Small Scale Operations
d. None of the above

45. Slab-wise tax rates, resulting in lower rates for low profits and high rates for high profits are applicable
on_________
a. Sole proprietorship
b. Partnership
c. Both correct
d. Both incorrect
46. A_________ partner is an owner who has unlimited liability and is active in managing the firm
a. senior partner
b. general partner
c. silent partner
d. limited partner
47. The independence is one of the key attractions of running a business as

a. Company
b. All business organizations
c. Partnership
d. Sole proprietorship
48. Sole proprietorships may have to pay higher interest rates on funds borrowed from banks than do large
corporations because they are considered____
a. Greater risk of default
b. Lower risk of default
c. Both correct
d. Both incorrect
49. Which form of business can obtain funds by selling shares and bonds to the public to raise money
a. Public Limited Company
b. Private Limited Company
c. Both correct
d. Both incorrect
50. In most cases, the maximum number of partners is

a. 10
b. 20
c. 50
d. No limit
51. What type of agreement can be used to form a partnership business?

a. Written agreement
b. Oral agreement
c. Both are correct
d. Both Are incorrect
52. As a legal entity, which of the following is/ are the rights of the company?

a. Right to receive, own, and transfer property.
b. Company can enter into contracts with individuals or with other legal entities
c. Company can sue and be sued in court of law
d. All of above
53. If ownership of a company is restricted to a small group of investors, then the company is called
a. Public limited companies
b. Private limited companies
c. Single member companies
d. All of above
54. Orient Cement Limited issues 1 million new common shares to General public through stock exchange.
The process is called _________
a. International public offering (IPO)
b. Initial public offering (IPO)
c. Internal public offering (IPO)
d. Integrated public offering (IPO)
55. Each share of stock generally carries

a. One vote
b. Two votes
c. Three votes
d. Four Votes
56. Executives/ officers of a company who are responsible for achieving corporate goals and policies are
a. Directors
b. Chief executive officer (CEO)
c. Secretary
d. All of above
57. Advantages of Company include

a. Limited liability
b. Ease of transferring ownership
c. Unlimited life
d. All of above
58. Disadvantages of Company

a. Double taxation of profits
b. Increased government restrictions
c. Cost and complexity of formation
d. All of above
59. Which of the following is not a disadvantage of forming a Company?

a. Double taxation of profits
b. Increased government restrictions
c. Cost and complexity of formation

d. Limited Liability
60. The Government organizations that are funded by the government to achieve social indicators of the
country are called
a. Non-government organizations
b. Clubs and societies
c. Cooperatives
d. Public sector organizations
61. If a business set-up intends to form a public or private company it is required to complete the requirements
provided in the___________
a. Companies Act 2017
b. Partnership Act 1932
c. Both correct
d. Both incorrect
62. Find the correct statement from the following:

a. Private limited company complies with the Companies Act 2017
b. Public limited company complies with the Companies Act 2017
c. Both are correct
63. Which of the following statements is correct?

a. Limited partnership has at least one general partner
b. General partnership has at least one limited partner
c. Both are correct
64. Partnership where all partners have equal share of profit?

a. Limited partnership
b. General partnership
c. Partnership
d. None of these
65. Which TWO of the following are not advantages of partnership?

a. Limitation for Growth
b. Unlimited liability
c. Combined knowledge and skills
d. Less regulatory control

a. Sole proprietorship are regulated by the Companies Act, 2017
b. Limited Partnerships are regulated by the Companies Act, 2017
c. Both correct
d. Both incorrect

Chapter 3
Organization of Business
1. Any organization that employs a multiple command system and related support mechanisms including an
associated organizational culture is a:
a. Factory organization
b. Functional organization
c. Matrix organization
d. All of the above
2. _________refers to the number of subordinates a superior can effectively manage.

a. Span of control
b. Chain of command
c. Short structure
d. Control ratio
3. One World Limited has an organizational structure focused on its different line of businesses such as
Consumer Products, Industrial Consumers, Retail Business and Customer Services. What type of
structure below best describes One World Limited’s structure?
a. Matrix Organization
b. Narrow Organization
c. Functional Organization
d. Divisional Organization
4. Which of the following is true for Centralized decision making?

a. Decisions by management are more likely to be taken with regard for the corporate objectives of the
entity as a whole.
b. Decisions by management should be coordinated more effectively if all the key decisions are taken
centrally.
c. In a crisis, it is easier to make important decisions centrally
d. All of these
5. Which of the following, if any, can be a feature of a decentralized organization structure?

a. In many situations, junior (‘local’) managers have much better knowledge than senior management
about operational conditions.
b. Giving authority to managers at divisional level and below helps to motivate the management team.
c. Decisions can be taken more quickly at a local level, because they do not have to be referred to head
office.
d. All of these
6. __________is an unbroken line of authority that extends from the top of the organization (e.g., a CEO) all the way
down to the bottom. Fill in the blank.
a. Chain reaction

b. Chain of command
c. Hierarchy
d. Span of control
7. Which of the following stands true about the Chain of Command?

a. Chain of command makes an organization too complex
b. Chain of command cannot exist in a functional organization
c. Chain of command clarifies who reports to whom within the organization
d. All of the above
8. The span of control is wide, and the shape of the organization structure is flat, because of the small number
of management levels. This statement is true for:
a. Wide-flat structure
b. Tall-narrow structure
c. Tall-flat structure
d. Wide-short structure
9. A _____________ organization groups together people who have comparable skills and perform similar
tasks.
a. Matrix
b. Functional
c. Geographic
d. Complex
10. The English Food Co. has organized its workforce based on their expertise. Which organizational structure
does the company follow?
a. Divisional Organization
b. Functional organization
c. Matrix Organization
d. Cannot be determined from the given information
11. An organization structure which is created when management decided to focus a great amount of talent
and resources for a given time period on a specific goal is called_____________.
a. Mechanistic
b. Project
c. Hybrid
d. None of these
12. Work specialization refers to:

a. The basis by which jobs at organization are grouped
b. Unbroken line of authority from top to down management
c. Degree to which tasks in an organization are subdivided into separate jobs
d. Number of subordinates a manager can effectively manage
13. In functional organization structure, there is _______

a. No delegation of authority
b. Delegation of authority

c. Division of responsibilities between managers and functions
d. Both b & c
14. Matrix organization structure has________

a. Unity of command
b. Multiple command
c. Both correct
d. Both incorrect
15. Which of the following has high degree of work specialization:

a. Wide-flat
b. Tall-Narrow
c. Both correct
d. Both incorrect
16. What kind of divisions an organization can develop as per its needs?
a. Customers
b. Products
c. Geographical
d. All of these
17. Organizational structure could be based on following approaches:

a. Nature of work
b. Contemporary and team-based structure
c. Outsourcing
d. All of these
18. Companies having different categories of customers will typically adopt:

a. Customer divisional structure
b. Product divisional structure
c. Satisfaction divisional structure
d. Geographic divisional structure
2. An organization operating in different parts of world will generally adopt the following structure:
a. Entrepreneurial
b. Complex
c. Sophisticated
d. Divisional
19. The main features of an entrepreneurial organization are that:

a. The entrepreneur takes all the main decisions and does not delegate decision-making to anyone
else
b. The organizations are very large
c. Organization sell a large variety of products/services
d. None of these
20. Following are basic types of organization structure

a. Entrepreneurial
b. Functional
c. Division
d. All of these
21. Gourmet Bakers operate in different cities of Pakistan where majority of decisions are taken by regional
managers. This type of structure is known as:
a. Functional
b. Divisional
c. Complex
d. Organic
22. In mechanistic organization, departmentalization is:

a. Flexible
b. Not so important
c. Rigid
d. None of these
23. In this type of structure, each manager has a small number of subordinates reporting directly to her/him:
a. Wide-Flat
b. Short-Flat
c. Tall-Narrow
d. None of these
24. Span of control depends on:

a. Manager's capabilities
b. Nature of Workload
c. Both correct
d. Both incorrect
25. Inappropriate organization structure causes:

a. Conflicts
b. Lack of motivation
c. Both correct
d. Both incorrect
26. In a manufacturing concern, which of the following is a non-core activity that can be outsourced to
specialized vendors, in view of outsourcing approach of organization structure?
a. Accounting
b. IT function
c. Both correct
d. Both incorrect
27. Functional form of organization that group its people by business functions is fairly typical for _____
companies.
a. small size
b. medium to large-size

c. small to medium-size
d. large size
28. Work specialization is also known as

a. span of control
b. chain of command
c. formalization
d. division of labor
29. The higher the ratio of subordinates to superiors

a. the lower the span of control
b. the wider the span of control
c. Both correct
d. Both incorrect
30. _________is the degree to which decision making is concentrated at a single point in the organization
a. Chain of command
b. Centralization
c. Formalization
d. Departmentalization
31. Most small businesses are organized as

a. Entrepreneurial structure
b. matrix structures
c. virtual organizations
d. bureaucracies
32. A ______ relies primarily on outsourcing core functions to specialized business partners.
a. team structure
b. Boundary less organization
c. Virtual organization
d. Strategic alliance
33. The _________ model has extensive departmentalization, high formalization, a limited information network
and little participation by low-level members in decision making
a. mechanistic
b. strategy
c. organic
d. routine
34. A(n) _______ organization uses flat cross-hierarchal and cross-functional teams, has low formalization
possesses, a comprehensive information network and involves high participation in decision making
a. strategy
b. mechanistic
c. organic
d. routine

35. ______________refers to how a business converts its inputs to outputs.
a. Environment
b. Structure
c. Routine
d. Process
36. Chain of command clarifies

a. Who is overall boss
b. Job description of employ
c. who reports to whom within the organization
d. Budgetary process
37. Centralization refers to _________

a. Retention of decision-making authority
b. Dispersal of decision-making authority
c. Creating divisions as profit centers
d. Opening new centers or branches
38. Organizing can be defined as

a. Identifying & grouping various activities
b. Establishing productive relations for the achievement of goals
c. Both correct
d. Both incorrect
39. ___________ involves giving authority and responsibility to subordinates.

a. Division of work
b. Span of control
c. Delegation
d. Centralization
40. Functional structures help to create

a. teamwork
b. specialization
c. project work groups
d. multi-skilled employees
41. ________ is the right to command

a. Authority
b. Responsibility
c. Accountability
d. Both (b) and (c)
42. Uranus Limited is a company dealing in metal products. The work is mainly divided into departments
including production, purchase, marketing, finance and personnel. Identify the type of organizational
structure followed by the organization.
a. Functional structure

b. Relational structure
c. Divisional structure
43. This type of organizational structure is the most suitable when the size of the organization is large, has
diversified activities and operations require a high degree of specialization.
a. Divisional structure
b. Functional structure
c. Network structure
d. Matrix structure
44. Indigo Limited has a staff of 300 people which is grouped into different departments. The organizational
structure depicts that 100 people work in Production department, 150 in Finance department, 20 in
Technology department and 30 in Human Resource department. Identify the type of organizational
structure being followed by the company
a. Functional structure
b. Divisional structure
c. Both correct
d. Both incorrect
45. What is the term for an autonomous business entity within an overall corporate enterprise which is set apart
from other areas of the business?
a. Subsidiary
b. Strategic partnership
c. Strategic alliance
d. Strategic business units
46. An organization have a small number of management layers with high number of subordinates working
under each manager. What is true for such structure?
a. Less specialization
b. Wide-flat structure
c. Both are correct
47. A good organizational structure has the benefits like____________

a. It divides work to be done into specific jobs and departments
b. It clusters jobs into units
c. Both are correct
48. What does an established entrepreneur don’t do?

a. Takes all main decisions
b. Entity is organized around the entrepreneur
c. Runs Production and operations himself
d. None of these
49. Which structure has the drawbacks of homogeneity and lack of communication among different units of

organization?
a. Divisional
b. Functional
c. Matrix
d. None of these
50. Nishat Linen a is textile company in Pakistan, it serves three types of customer-base i.e., Male, female and
children. Which kind of divisional structure is it?
a. Product Divisional Structure
b. Customer Divisional Structure
c. Process Divisional Structure
d. All of these
51. Matrix structure is also called____________

a. Project structure
b. Mix structure
c. Both are correct
52. Find the correct answer from the following statements:

a. line managers are responsible for overall strategy of project
b. line managers responsible for a specific activity of project
c. Both are correct
53. Which of the following is not an element of Organizational structure?

a. Chain of command
b. Levels of management
c. Span of control
d. External environment
54. Any organization that employs multiple command system and related support mechanism is called
_________
a. Functional organization
b. Divisional organization
c. Matrix organization
d. Entrepreneurial organization
55. Matrix organization is combination of _____________

a. Function and Division
b. Function and Head of function
c. Lower and senior management
d. None of these

Chapter 4
Sources of Business Finance

1. _________________management is the art and science of managing a company’s funds so that it can
meet its goals.
a. People
b. Revenue
c. Financial
d. Data
2. Corporations are often required to raise external funding or capital. Which of the following may be reasons
for requirement of additional funding?
a. to expand their businesses into new markets or locations,
b. to invest in research & development,
c. to spend on competitive market campaigns.
d. All of the above
3. What are the key activities of the financial manager?

a. Preparing the financial plan, which projects revenues, expenditures, and financing needs over a
given period
b. Investing the company’s funds in projects and securities that provide high returns in relation to their
risks
c. Obtaining timely funding for the company’s operations and investments and seeking the best
balance between debt and equity
d. All of these
4. What are the differences in Finance and operating lease?

a. Once the finance lease is expired, the lessee can purchase an asset at a bargain price. In operating
lease, generally, the ownership is retained by the lessor during and after the lease term.
b. The lessee can terminate the operating lease even at the short notice and without any significant
penalty, subject to the lease agreement. Usually, finance lease is difficult to be terminated
c. Both correct
d. Both incorrect
5. Which of following is not advantage of Bonds for bondholders:

a. Fixed interest payments to bondholders
b. Provide a medium and long-term source of financing avoiding short-term refinancing risk
c. Most bonds are universally rated by credit rated agencies providing an independent source of analysis.
d. Financial and Non-financial caveats
6. They generally provide fixed interest payments at periodic intervals and are redeemable at a
predetermined date in future

a. Leases
b. Bonds
c. Committed lines of credit
d. Shares
7. A _______ is a contractual agreement whereby one party that is the owner of an asset grants the other
party the right to use the asset in return for a periodic payment.
a. Bank Loan
b. Lease
c. Both correct
d. Both incorrect
8. Lease of asset means __________

a. Selling asset on installments
b. Giving right to use assets against installments
c. Both correct
d. Both incorrect
9. Which of the following is not an advantage of Committed lines of credit?

a. It gives the flexibility to the organization to borrow money when the need arises
b. The interest is only paid on amounts borrowed
c. The facility cannot be used for large borrowings
d. There is less paperwork involved at each drawdown of funds
10. Following are short term financing modes:

a. Trade creditors
b. Factoring
c. Both correct
d. Both incorrect
11. Key activities of a financial manager are:

a. Financial Planning, Budgeting and financing
b. Financial planning, financing and investment
c. Financial planning and financing
d. Risk taking and financing
12. Companies use a variety of sources of finance and the aim should be to achieve an efficient capital
structure that provides:
a. A suitable balance between short-term and long-term funding
b. Availability of adequate cash for day-to-day expenses
c. A suitable balance between equity and debt
d. All of these
13. The science part of Financial Management belongs:

a. to analyzing data and cash flows

b. Pricing
c. Optimum use of resources
d. All of these
14. In the case of ________ preference shares, if the company is unable to pay dividends for one particular
year, the dividend accumulates and is carried forward to the next year.
a. Fixed
b. Cumulative
c. Non-cumulative
d. Common
15. What is a disadvantage of retained earnings?

a. Retained earnings enhance the financial position of a business.
b. Generally, the stock market views the equity issue as doubtful and therefore, these earnings do
not carry a negative connotation.
c. There will be no dilution of control and ownership, in case the company relies on the retained
earnings
d. The opportunity cost of these earnings is relatively high because it shows that amount of
earnings, which have been foregone by the equity shareholders.
16. Following are main methods of issuing new shares for cash:
a. Private placement
b. Initial public offering
c. Both correct
d. Both incorrect
17. The _____________ represent that portion of the equity earnings which is sacrificed by the equity
shareholders and is ploughed back into the company to reinvest these in the core business operations,
such as paying off the debt obligations or purchasing capital assets.
a. Share capital
b. Current liabilities
c. Retained Earnings
d. Overdraft
18. As per pecking order theory, sequence of financing should be:

a. Retained Earnings - Debt financing - Shares issuance
b. Retained Earnings - Shares issuance - Debt financing
c. Both correct
d. Both incorrect
19. Debt finance may come with certain conditions or regulations such as maintaining certain mix of capital
structure, and level of current ratios. Such conditions/regulations are called:
a. SOPs
b. Caveats
c. Incentives
d. Rewards

20. To achieve goals and objectives of a business, which of the following is critical to decide as to which type
of financing is required to maximize shareholders' value?
a. Strategic management
b. Human resource management
c. Information Technology management
d. Financial management
21. Mr. Ali wants to borrow variable funds of Rs. 1 million to Rs. 2 million in 6 months if need arises. Which of
the following is the best advisable source of finance for him?
a. Trade credit
b. Factoring
c. Short term loan
d. Committed line of credit
22. Which of the following is not the provision to achieve an efficient capital structure?
a. Abundant cash out flows compare to inflows
b. Availability of adequate cash for day-to-day expenses
c. A suitable balance between short term and long-term funding
d. A suitable balance between equity and debt in the long term.
23. Which of the following is a drawback of equity financing?

a. Profits are divided among all shareholders including new ones in the form of dividend
b. Shareholders have voting rights; therefore, equity financing makes the management control
weaker
c. Both correct
d. Both incorrect
24. Which of the following is not the advantage of trade credit?

a. It gives increased purchasing power to the organization
b. The organization does not have to pay any interest cost
c. The organization may lose discounts
d. No specific collateral is required
25. ______________ is renting an asset of the organization for a short duration.

a. Pledge
b. Committed lines of credit
c. Operating leasing
d. Factoring
26. What is/ are the basic source of finance?

a. Equity financing
b. Debt financing
c. Both correct
d. Both incorrect

27. Only _______________Companies can offer shares to general public.
a. Private Limited
b. Listed Companies
c. Public Limited
d. None of these
28. Dividend can be paid in the form of:

a. Cash
b. Shares
c. Both correct
d. Both incorrect
29. On the basis of sources of generation of funds which of the following is the internal source of finance?
a. Debenture
b. Bank loan
c. Share capital
d. All of the above
30. Which of the following financial statements is a source of information for financial management of a
company?
a. Balance sheet
b. Income statement
c. Cash flow statement
d. All of the above
31. ____________ focus on cash flow management

a. Financial managers
b. Company secretary
c. production managers
d. Company managers
32. Liabilities and equity are _____________ the for the company
a. Responsibility
b. Resources
c. Sources of finance
d. None of above
33. Risk-return trade-off is the concept to ensure optimum use of resources which means that the _____risk,
the ______return.
a. Higher, lower
b. Lower, higher
c. Greater, lower
d. Higher, greater
34. Which of the following is the factor which may result in potential risk
a. Changing pattern of market demand

b. Interest rates
c. General economic condition
d. All of the above
35. In raising funds through debt financing a public company can borrow money through banks or it can be
done publicly through ________.
a. Share issues
b. Debt issues
c. Both correct
d. Both incorrect
36. Debt issues are known as _________ which allow a wide number of investors to become lenders to the
organization.
a. Corporate shares
b. Corporate bonds
c. Corporate preference shares
d. Long term payable
37. Short term finance is for a period normally.

a. Less than a year
b. More than a year
c. More than 2 years but less than 3 years
d. None of above
38. On the balance sheet, short term financing is shown as _____________

a. Current assets
b. Current liability
c. Long term liability
d. Non-current liability
39. Short term finance is used to finance current assets and support __________________;
a. Needy employees
b. Community
c. Operations
40. Short term financing is needed because of uneven __________ into the business.
a. Profit
b. Revenue
c. Flow of cash
41. Which one of the following is an example of short-term financing?

a. Trade credit
b. Debentures
c. Bonds

d. Shares
42. Trade credit is___________ mode of financing.

a. Secured
b. Safe
c. Unsecured
d. Unsafe
43. Which TWO of the following are the disadvantages of bank loans
a. There is an interest cost involved in obtaining bank loan
b. Banks usually provide large amount of funds
c. The bank loan requires excessive paperwork and some kind of collateral to keep rates lower
d. In some cases, the borrower has to issue shares to get bank loan
44. _______________ is a legal agreement between a financial institution and a borrower with the conditions
of credit line.
a. Operating leases
b. Trade credit
c. Committed credit line
d. Promised credit line
45. In factoring the company sells its ______ to the financial institution at discount.
a. Goods and services
b. Accounts receivable
c. Both correct
d. Both incorrect
46. Discounting is more________________ than a bank loan.

a. Suitable
b. Attractive
c. Expensive
d. All the above
47. On the basis of time period which TWO of the following are the source of long-term finance?
a. Trade credit
b. Factoring
c. Corporate bonds
d. Equity
48. Which of the following is not an advantage of the short-term source of finance?
a. Less interest amount
b. Disbursed quickly
c. Both correct
d. Both incorrect
49. Due to __________ business come into debt trap in which it continues borrowing to repay the previous
unpaid loan.

a. Long term financing
b. Unpaid debentures payable
c. Non repayment of bonds payable
d. Short term financing
50. Due to debt trap the interest rate keeps on increasing and can terribly affect the business and its_______
a. Liabilities
b. Owners’ equity
c. Liquidity
d. Assets
51. _____________represents funding long term assets with short term liabilities on the assumption of
frequent renewals of short-term debts.
a. Asset-liability Mismatch
b. Asset-liability Balance
c. Asset-liability equality
d. none of the above
52. Certain long-term finance options directly form a part of the permanent capital of the organization where
____________ does not even arise.
a. Interest payable
b. Interest receivable
c. Revenue
d. Obligation
53. The primary purpose of obtaining long term funds is to finance_________ and carry out operations on an
expansionary scale.
a. Liquid projects
b. Capital projects
c. Profitable projects
d. Revenue generating projects
54. The companies avail the sources of long-term finance when they have an inadequate _______ and need
funds to carry out its operations for a longer period of time.
a. Profit
b. Shares
c. Cash balance
d. Noncurrent assets
55. Which of the following is not the objective of long-term finance?

a. Pay salaries
b. Pay utility bills
c. Both correct
d. Both incorrect
56. Which of the following statements is true about debt financing?

a. A type of finance where a borrower receive fund either for a specific period of time or possibly in
perpetuity.
b. Acknowledges an obligation to pay interest on the debt as long as the debt remains outstanding.
c. Both correct
d. Both incorrect

a. Company gets cash for issuance of shares
b. Bondholders receive interest before preferred shareholder’s dividend
c. Both are correct
58. Which of the following statements is correct for preferred shares?

a. Annual dividend is fixed
b. They have more voting rights than common shareholders
c. Both are correct
59. Which TWO of the following statements are correct?

a. Company gets cash for issuance of shares
b. Bondholders receive interest before preferred shareholder’s dividend
c. Preferred shares have voting rights
d. Debt finance dilute ownership and control
60. Which of the following statements are not correct for lenders?
a. Customer borrows money from them
b. Repayment of loan by customer comprising of interest and principal
c. They share ownership of the Company
d. All of these
61. Which of the following is a short-term finance?

a. Creditors
b. Factoring
c. Both are correct
62. Multan Fabrics has liquidity problems due to a large number of trade receivables. It should opt
for_____________
a. Creditors
b. Factoring
c. Bank loan
d. Operating lease
63. Debt obtained for more than 1 year is called_____________

a. Equity
b. Long term loan
c. Short term loan
d. Bonds

64. Which of the following is correct?
a. Interest rate in committed lines of credit is higher than a bank loan
b. Less documentation required in long term loan
c. Both correct
d. Both incorrect
65. Which of the following is correct?

a. Repair & maintenance cost in operating lease is borne by lessee
b. Long term finance is used for expansion of business
c. Both correct
d. Both incorrect
66. Which of the following is correct advantage of retained earnings?

a. No interest cost
b. No dilution of ownership
c. Both correct
d. Both incorrect
67. What kind of financing is suitable for an organization which does not know when to borrow and how much
to borrow?
a. Factoring
b. Committed lines of credit
c. Short term loan
d. Bonds
68. Karachi Glass Limited wants to raise the funds of Rs. 50 million for its business. It has three options
regarding sources of finance.
I. It can issue new shares through private placement
II. It can obtain short term from MCB at interest rate of 15% per annum
III. It can use its retained earnings
What should be the most suitable sequence of raising finance?
a) III, II, I
b) III, I, II
c) I, II, III
d) Any of these
69. Role of financial manager is to___________

a. Maximize value of Company to its owners
b. Provide best quality to customers
c. Both are correct
70. A Company looking for funds without any cost or legal documentation should opt for_________
a. Retained earning
b. Debt finance
c. Shares issuance
d. Bonds

Chapter 5
Information Technology
1. The______________ system exists to support the human resources management function in performing its
duties of maintaining an appropriate workforce.
a. Personnel
b. Integrated
c. Management
d. All of the above
2. A computer system comprises four key components. Which of the following is not a key component of
a computer system?
a. Central Processing Unit
b. Input device
c. Output device
d. Data Analysis Unit
3. Printers, disc drives, monitor screens are part of ?

a. Computer hardware
b. Computer software
c. Integrated hardware
4. Which of the following statements is True about the Central Processing Unit?
a. The central processing unit is the ‘brain’ of the computer
b. The central processing unit takes the inputs, processes them and then outputs the results
c. Both correct
d. Both incorrect
5. A_______________ is a hand-operated device with internal sensors that pick up the motion and converts it
into electronic signals which instruct the cursor (pointer) on screen to move.
a. Mouse
b. Keyboard
c. Both are correct
6. What does MICR stand for?

a. Magnetic instrument for character recognition
b. Magnetic ink character recognition
c. Master instrument for character recognition
d. Magnetic illustrator for complex results
7. ___________ capture images and videos in digital form and allow easy transfer to acomputer where they
can be manipulated by software.
a. Digital Cameras
b. CCTV cameras

c. Web Cameras
d. Light cameras
8. What is the function of an Output device?

a. It receives processed data from the computer and presents it in some way
b. It facilitates the introduction of data and information into the system
c. It is a device that processes data and provides results
9. QR codes and Barcodes are examples of

a. Input devices
b. Output devices
c. Both correct
d. Both incorrect
10. __________ device is the part of a computer system that receives the processed data from the computer and
presents it in some way.
a. Processing
b. Input
c. CPU
d. Output
11. ___________ consists of the computers themselves plus all the peripheral equipment connected to a
computer for input, output and storage of data (such as printers and stand-alone disc drives).
a. Computer software
b. Computer hardware
c. Storage devices
d. CPU
12. _____________ requires the input media to be formed of specially formatted characters printed in magnetic
ink.
a. Optical mark recognition
b. Quick response code
c. Magnetic ink character recognition (MICR)
d. Scanners
13. _____________ are the groups of black and white marks with variable spacing and thickness found on
product labels such as those at the supermarket. Each code is unique and can be read automatically.
a. Optical mark
b. Barcodes
c. Both correct
d. Both incorrect
14. Internal temporary storage directly accessible by the CPU that allows it to process data.
a. Secondary
b. Mountable
c. Primary
d. Offline
15. OMR refers to:

a. Optical Mark Reader
b. Optical Measurable Recognition
c. Both correct

d. Both incorrect
16. Which of the followings is not an element of system?

a. Goal
b. Output
c. Motivation
d. Environment
17. Which of the following Information system is used for strategic decisions?
a. Transaction processing system
b. Executive information system
c. Management information system
d. Decision support system
18. What are the kinds of system?

a. Simple and complex
b. Open and closed
c. Internal and external
d. None of these
19. In the context of adaptation to environment, how many types of systems are there?
a. Two
b. Three
c. Four
d. Five
20. Which kind of system adapts the most to environment and is least likely to be computerized?
a. Deterministic
b. Probabilistic
c. Mechanistic
d. Cybernetic
21. _______________ are a set of values of qualitative or quantitative variables about one or more persons or
objects. It can exist in various forms: as numbers or text recorded on paper, as bits or bytes stored in electronic
memory, or as facts living in a person's mind.
a. Idea
b. Data
c. Concept
d. DBMS
22. Select the main types of data base management system.

a. Hierarchical
b. Network
c. Relational
d. All of these
23. Which one of the followings is a disadvantage of Integration?

a. Should ultimately lead to a more efficient operation
b. Would lead to greater customer satisfaction and hence profitability
c. Greater risk that if one module fails the whole system could fail
d. None of these
24. Which of the followings is not a type of Information system?

a. Executive information system

b. Transaction processing system
c. Management support system
d. None of these
25. _______________automate routine and tedious back-office processes such as accounting, order
processing, and financial reporting.
a. Enterprise resource planning
b. Transaction processing system
c. Management information system
d. Decision support system
26. Which one of the following is an advantage of batch processing?

a. Often delays between when a transaction is made and when the master file is updated and the
output generated.
b. Management information is often incomplete due to out-of-date data
c. Less processing power is required as deals with similar updates
d. Often master files kept off line therefore access may not always be available.
27. ___________ helps businesses by providing quantitative data and predictive models that aid problem-
solving and decision-making. It helps managers make decisions using interactive computer models that
describe real-world processes.
a. Management support system
b. Decision support system
c. Both correct
d. Both incorrect
28. ___________ is a computer program that simulates the judgement and behavior of a human or an
organization that has expert knowledge and experience in a particular field.
a. Transaction processing system
b. Expert system
c. Executive information system
d. ERP
29. Personnel system involves the following:

a. Selection
b. Recruitment
c. Staff development and appraisal
d. All of these
30. In the context of time period and importance of decisions, how many levels of information are there?
a. Four
b. Six
c. Three
d. Five
31. In Expert System, Knowledge Acquisition means,

a. How to get required domain knowledge by the expert system
b. System maintenance
c. System implementation
d. None of these
32. Which of the following is a system used to present information to drill down to details for executives of the
company?
a. Decision Support System

b. Executive Support System
c. Expert System
d. Transaction-Processing System
33. Strategic information is needed for _____________ in the organizations.

a. Long term planning
b. Short term planning
c. Regular / daily operations
d. All of these
34. Networking of different computers within an organization is also known as __________

a. Intranet
b. Extranet
c. Freenet
d. Closed net
35. A device that allows users to feed data into a computer for analysis and storage andto give commands to the
computer is called.
a. Output device
b. Input device
c. Both correct
d. Both incorrect
36. Which of the following is used in an optical mouse?

a. Infrared light
b. Light Emitting Diode (LED)
c. Sensor
d. Microwave
37. Which of the following are not input devices?

a. Webcam and Microphone
b. Bar Code Reader and Smart Card Reader
c. Optical Character Reader and Optical Mark Recognition
d. Headphone and Printer
38. Which TWO of the following are input devices?

a. Track ball
b. Printer
c. Keyboard
d. Magnetic Ink Card Reader (MICR)
39. Mouse is commonly known as?

a. Pointing device
b. Control device
c. Monitoring device
d. Gaming device
40. Scanner is ____________Device?

a. Input
b. Output
c. Storage
d. Pointing
41. Which of the following is not an output device?

a. Monitor
b. Printer
c. Voice date entry
d. Speaker
42. The OCR stands for _______

a. Outsized Character Reader
b. Optical Character Recognition
c. Operational Character Reader
d. Only Character Reader
43. Physical structure of computer is called

a. Software
b. Hardware
c. Human ware
d. All of these
44. What amongst the followings are the primary characteristics which must be possessed by information?
a. Availability
b. Timeliness
c. Accuracy
d. All of these
45. It is a necessity of the data to be ___________ before it can be converted into information
a. Processed
b. Transformed
c. Edited
d. None of these
46. A(n) ________ is a collection of procedures for converting data into knowledge and facts
a. Information system
b. Data system
c. Storage system
d. None of these
47. A system is called __________when the inputs method and outputs are all well-known
a. Nondeterministic
b. Deterministic
c. Probabilistic
d. None of these
48. Strategic information and decision-making are important to ____________

a. Executives
b. Supervisors
c. Supporting staff
d. None of these
49. Abdul Rafay woke up and went to the ATM to take money. He then went to grocery store to buy some products
and paid with his credit card. He finished off his day by going to school and registered online for his computer
class. Abdul Rafay has had multiple contacts with what kind of information systems throughout his day?
a. EIS (Executive Information System)
b. MIS (Management Information System)
c. Transaction Processing System (TPS)

50. Computer network that spans a limited physical area usually ranging from a small office to a building is known
as____
a. LAN
b. WAN
c. MAN
d. PAN
51. Computer network that spans a large physical area connecting several sites of an organization across cities
countries and continents is known as_________
a. LAN
b. WAN
c. MAN
d. PAN
52. What is the purpose of a LAN?

a. To allow computers to communicate with each other in the same area
b. To allow computers to communicate with each other - anywhere in the world
c. Both correct
d. Both incorrect
53. What is the purpose of a WAN?

a. To allow computers to communicate with each other in the same area
b. To allow computers to communicate with each other - anywhere in the world
c. Both correct
d. Both incorrect
54. What is a server in a computer network?

a. Someone who manages the network
b. The name for a large number of computer cables
c. A powerful computer that provides a service such as centralized file storage
d. None
55. __________ processes multiple transactions at the same time

a. Batch Processing
b. Real-time Processing
c. Distributed System
d. None of the mentioned above
56. In __________ the results of each transaction are immediately available

a. Batch processing
b. Real-time processing
c. Transaction processing
d. All of the mentioned above
57. Which of the following groups are only input devices?

a. Mouse, keyboard, monitor, Joystick
b. Mouse, keyboard, printer, Light pen
c. Mouse, keyboard, Scanner, Joystick, Light pen
d. Mouse, keyboard, Trackball, projector
58. _______________ reads texts or illustrations printed on paper and translate the information into a format
that a computer can use.
a. Printer

b. Scanner
c. OMR
d. MICR
59. In a control system, what measures output from the system and determines a new value?
a. Comparator
b. Standard
c. Sensor
d. Input
60. Data transmission errors tend to be more in WAN than LAN.

a. True
b. False
c. Varies
d. None of these
61. Which of the following is not an output device?

a. Projector
b. Scanner
c. Printer
d. Headsets
62. Executive information system is used by__________________

a. Senior management and BOD
b. Tactical management
c. Operational management
d. None of these

Chapter 6
Business Ethics
1. ___________________ is defined as “discipline dealing with what is good and bad and with moral duty and
obligation”
a. Ethics
b. Business Ethics
c. Legal Ethics
d. Corporate Social Responsibility
2. ________________ is defined as “set of moral principles which guide organizations what is right, wrong, and
appropriate in the workplace.”
a. Ethics
b. Business Ethics
c. Legal Ethics
3. __________________is defined as “conducting business ethically and with sensitivity towards social, cultural,
economic, and environmental issues”
a. Ethics
b. Business Ethics
c. Legal Ethics
4. Which of the following statements is true in testing ethical decision-making for a project?
a. Select without considering mirror test
b. Select if legality is not obvious but can find a consultant to fix it.
c. Select if primary objective of shareholders’ value maximization is certain ignoring mirror test
d. Select only if mirror test is passed
5. Which of the following statements is not an advantage of being socially responsible?

a. Being a socially responsible organization can bolster an organization’s image and build its brand
b. Social responsibility empowers employees to leverage the corporate resources at their disposal
to do good
c. Both correct
d. Both incorrect
6. Which of the following is an example of socially responsible activities?

a. Environmental efforts
b. Volunteering
c. Both correct
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d. Both incorrect
7. Which of the following statements is not True?

a. Evidence for reputation risk is conclusive
b. Environmental efforts is one of the primary focuses of CSR
c. Mirror testing is a technique for ethical decision-making
d. Avoiding conflict of interest is a consideration for business ethics
8. Organizations that have been exposed to reputation risk include:

a. Organizations accused of buying from suppliers in developing countries that use child labor
b. Organizations accused of polluting the environment
c. Both correct
d. Both incorrect
9. Following TWO are not the key consequences of unethical behavior:

a. Labor practices
b. Conflict of interest
c. Recycling of waste material
d. Charities
10. Which of the following statements is True for corporate code of ethics?
a. It may be formal or informal
b. In UK very few top organizations have it.
c. You can’t train people. It’s a natural instinct.
d. Strongly endorsed from the top
11. ICAP code of ethics requires following?

a. Professional competence
b. Integrity
c. Confidentiality
d. All of the above
12. Following are the ways organizations can reduce the potential for ethical consequences by:
a. Educating their employees
b. Leading through example
c. Both correct
d. Both incorrect
13. Taking care of sensitive information of clients is an example of:

b. Integrity
c. Confidentiality
d. None of these
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14. Sending junior to a client to perform tasks that should be performed by a senior, is an example of lack of:
b. Integrity
c. Confidentiality
d. Leadership
15. Being honest with customer regarding quality of product is ------------------------- --.
a. Ethics
b. Business ethics
c. Effective leadership
d. Confidentiality
16. An organization is in a process of awarding a contract. Son of CEO of same organization has also applied for
the award of contract. This is example of-------------------
a. Confidentiality
c. Ethics
d. Integrity
17. Employees of XYZ Chemicals Limited often spends office time in cafeteria having coffee and discussing
different business operations. This is an example of _______
a. Violating rules
c. Misuse of organization time
d. All of these
18. If you see a colleague forging signature on cheque book, what course of action will you take?
a. Ignore him
b. Discuss the ethical issue with him
c. Report him immediately to seniors
d. Demand a share from the amount stolen
19. Coming late to office on regular basis is example of _____________

a. Violating rules
b. Taking unfair advantage
d. None of these
20. As a procurement manager, you call quotation from a supplier and ask him to add 10% more than what
he is going to quote. You offer him to pay 5% of that extra amount and keep 5% for yourself. This is an
example of ______
a. Violating rules
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c. Abuse of power
d. All of these
21. Billing more than actual travelling expense on business trip is example of--------------
a. Taking something that does not belong to you
b. Misrepresentation of information
c. Dishonesty
d. None of these
22. While purchasing a fabric, the customer is concerned that fabric might bleed color when washed.
However, shopkeeper assures him that it won’t, even though shopkeeper has received such complaints
from other customers. This is an example of _________
a. Taking something that does not belong to you Misrepresentation of information
b. Dishonesty
c. Giving or allowing false impressions
d. None of these
23. Selling a product at super profit margin is __________

a. Legal & ethical
b. Illegal but ethical
c. Legal but unethical
d. Illegal & unethical
24. Thinking about consequences of an unethical decision is ________

a. Mirror test
b. Consequence test
c. Legal test
d. Unethical test
25. Which of the following refers to the obligations to take decisions and perform actions which are desirable
in terms of objectives and values of the society?
a. Charity
b. Social responsibility
c. Social welfare
d. Business responsibility
26. Which of the following is the characteristic of professional competence and due care?
a. To be straight forward and honest in all professional and business relationship.
b. To act the diligently and in accordance with applicable technical and professional standards
c. To respect the confidentially acquired as a result of professional and business relationships
27. Smoke Restaurant offers tasty foods using special recipes. Sikandar Amin, procurement manager
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informed the competitor about materials purchased and used by Smoke Restaurant. This is an example
of _______
a. Violating rules
b. Saying things you know are not true
c. Divulging information
d. All of the above
28. ICAP is a member of ______________

a. IFAC
b. ICAEW
c. ACCA
d. United Nation
29. How many fundamental principles are there in ICAP Code of Ethics?
a. Two
b. Three
c. Five
d. Six
30. As per ICAP’s Code of Ethics, _______ is to be straightforward and honest in all professional and
business relationships.
a. Honesty
b. Competence
c. Integrity
d. Due Care
31. Not providing services on the basis of updated Accounting Standards or Tax Law is violation of the
fundamental principle.
a. Integrity
b. Objectivity
c. Professional Competence & Due Care
d. Professional behavior
32. A Chartered Accountant abused the opponent in a live talk show, he violated _________ Principle of
ICAP’s Code of Ethics:
a. Integrity
b. Professional Behavior
c. Both correct
d. Both incorrect
33. Which of the following is buying or selling of stocks by insiders who possess material without informing
the public?
a. Insider business
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b. Insider transaction
c. Insider stocks
d. Insider trading
34. Multan Detergents Limited, a company engaged in production of washing powder. For the promotion of
its product the company falsely exaggerates the qualities and features of the product in an advertisement
to attract customers even though the company knows that in reality the product does not have such
qualities and features. This is the example of which of the following business ethical issue?
a. Violating rules
b. Reputation risk
c. Condoning unethical actions
d. Saying things you know are not true
35. A soap company offers a packet of three soaps at a discount by offering to save up to Rs 20/- on the
packet. However the company has reduced the size of the soap in the packet from its standard size. This
practice is _____
a. Illegal but ethical
b. Legal and ethical
c. Illegal and unethical
d. Legal but unethical
36. Meat Bites Restaurant offers foods using poor quality ingredients which may be hazardous to the health
of its customers. On visit of food inspector Mr. Fahad, the chef did not give details of the quality of
ingredients being used by the restaurant. This is an example of:
a. Violating rules
b. Saying things you know are not true
c. Hiding information
d. All of the above
37. Selling goods with two year warranty and claiming that the product life is 10 years despite knowing that
the products actual life is only 5 years. This is the example of which of the following business ethical
issue?
a. Giving or allowing false information
b. Violating rules.
c. Taking unfair advantage
38. An individual is made to purchase shares of Elegance Textiles Limited, the CEO of which is cousin of a
minister. The individual has been promised a construction contract on purchase of these shares despite
the fact that the company is under investigation. In case of negative outcome of investigation against the
company it will certainly affect the stake of the individual. This illustration falls under which of the following
head?
a. Buying under influence
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b. Hiding information
c. Taking unfair advantage
39. XYZ Company hires immigrant workers on low pay instead of hiring local workers who demand more pay
for the same work. This is the illustration of which of the following ethical issue?
a. Violating rules
c. Hiding information
d. All of the above
40. As an example of business ethical issue which of the following falls under abusing power and mistreating
individuals?
a. Pay less
b. Improper working condition
c. Harsh behavior
41. XYZ is a multinational company. Its South Africa branch has hired children against the company policy.
But the company does nothing against the branch and remains silent. This illustration represents which
of the following head of business ethical issues.
a. Hiding or divulging information
b. Committing improper personal behavior
c. Permitting organizational abuse
42. The employees of XYZ Company engage in unnecessary activities not related to their work during their
office hours. This is an illustration of which of the following business ethical issue?
a. Violating rules
b. Misuse of organization premises
d. Misuse of designation
43. Which of the following is the least consequence of unethical behavior?

a. Loss of customer
b. High turnover of employees
c. Cost of production increases
d. Low turnover of inventory
44. Select TWO advantages of Corporate Social responsibility (CSR)?

a. It can bolster and organization’s image
b. It can contribute positively to employee’s morale and motivation
c. Both are correct
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45. Which one of the following is NOT a fundamental principle of ICAP Code of Ethics for Chartered
Accountants?
a. Integrity
b. Objectivity
c. Professional competence and due care
d. Punctuality
46. Which of the following questions are asked during Mirror Test?
a. Is it legal?
b. Does it give me financial benefit?
c. Both correct
d. Both incorrect
47. Which of the following does not come under ambit of Ethical issues?
a. Paying less tax than required
b. Selling products at premium rate
c. Paying less than minimum wage to female workers in order to give them jobs
d. None of these
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Chapter 7
Marketing Concepts
1. _____________ is a systematic approach to satisfy consumers.
a. Selling
b. Branding
c. Accounting
d. Marketing
2. Which of the following is not considered characteristics of a product?

a. Name
b. Adaptable
c. Communicated
d. Quality
3. Which of the following are considered main types of product?

a. Trading & Service
b. Consumer and Industrial
c. Both correct
d. Both incorrect
4. Which of the following product type can be sub-divided into convenience, shopping, orshopping
products?
a. Industrial
b. Consumer
c. Both correct
d. Both incorrect
5. Capital items and supplies are sub-categories of which product type?

a. Industrial
b. Banking
c. Manufacturing
d. Consumer
6. A consumer who purchases an ebook or listens to podcasts by paying membership fees, is known as
_____
a. Technical buyer
b. Advanced buyer
c. Contemporary buyer
d. Digital buyer
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7. One of the characteristics of industrial products is that it has:
a. Derived demand
b. Direct demand
c. Local demand
d. Foreign demand
8. One of the characteristics of consumer products is that it has:

a. Many buyers
b. Limited buyers
c. Local buyers
d. Foreign buyers
9. Which of the following is not a factor to describe a target market segment?

a. Demography
b. Geography
c. Equality
d. Specialty
10. Traditionally, the market mix has 4Ps. Which of the following is considered the 5th component?
a. Product
b. Price
c. Both correct
d. Both incorrect
11. Which of the following is the typical product life cycle phases?
a. Introduction, Growth, Expansion, Decline
b. Introduction, Growth, Maturity, Decline
c. Introduction, Expansion, Maturity, Decline
d. Product, Price, Promotion, Place
12. Is a method of identifying products and differentiating them from competing products.
a. Selling
b. Competing
c. Branding
d. Inspecting
13. _____________ refers to the short term need to get an agreement signed.
a. Selling
b. Competing
c. Branding
d. Marketing
14. __________ tends to focus on the general population, whereas _______ tends tofocus on individuals or a small
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group of prospects.
a. Marketing, Selling
b. Selling, Marketing
c. Buying, Selling
d. None of these
15. Products in this category are usually indirect items that contribute to the production of end product. These
products are also called consumables.
a. Capital
b. Supplies
c. Manufactured parts
d. Specialty products
16. Following are the key elements of branding:

a. Brand positioning
b. Brand image
c. Brand ownership
d. None of these
e. All of these
17. Select TWO which depict importance of branding:

a. strongly established brand can increase a business’ value by giving the company more leverage in the industry.
b. Branding generates new customers
c. Creates mistrust within the marketplace
d. Branding increases cost of advertising
a. All of these
18. A____________ is a brand’s form of identification that is legally protected from use byother business:
a. Patent
b. Trademark
c. Copyright
d. Design
19. At this point, most marketing strategies are used to ensure that customers are still aware that the product
exists. Some marketing strategies may offer special discounts to maintain market share. The firm may also
revise the design of the existing product.
a. Introduction
b. Growth
c. Maturity
d. Decline
20. Features, Quality, branding, packaging, services, warrantees etc. belong to which "P" ofMarketing mix?
a. Product
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b. Price
c. Place
d. Promotion
21. Some businesses use a marketing approach, in which they try to appeal everyone and assume that all
buyers have similar needs and wants. It is called:
a. Total market approach
b. Target market approach
c. Revolutionary market approach
d. Market segmentation
22. These are products which are used as input for manufacturing other products. Unlike consumer goods, these
are not for direct consumption. These are meant for business and non-personal use.
a. Dynamic Products
b. Industrial products
c. Factory products
d. Consumer products
23. Anything that can be offered to a market for attention, acquisition, use or consumption thatmight satisfy a
want or need.
a. Prize
b. Success
c. Service
d. Product
24. ___________ is an activity that the marketing department would undertake in order to increase sales or
promote the products. It also helps in differentiating the product from competing alternatives
a. Selling
b. Grading
c. Branding
d. Risk taking
25. If a company uses successful brand names to launch a new or modified product in a new category this
strategy is called
a. Brand extension
b. Co-branding
c. Line extension
d. Multi branding
26. The strategy of using a name logo sign symbol or design etc. to help consumers identify aproduct or
service and also differentiate it from competitors is called
a. Umbrella branding
b. Branding
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c. Mega branding
d. Co-branding
27. __________occurs when a customer feels that the company is delivering the product as its brand had
promised.
a. Brand dilution
b. Brand extension
c. Brand bonding
28. The word “brand” is derived from the Old Norse “brand” meaning ________
a. To Fire
b. To Hurt
c. To Burn
d. To Care
29. Want for a specific product backed by an ability to pay is called _______
a. Demand
b. Need
c. Want
d. Customer
30. ____________ensures repeat purchase and helps marketers overcome competition from other firms.
a. Brand awareness
b. Brand loyalty
c. Brand association
31. Which TWO of the following are intangible ?

a. Investment property
b. Patent
c. Mobile phone
d. Mobile application
32. Sting Energy Drink advertises for teenagers in a football stadium. What kind of approach is this?
a. Total market approach
b. Market segmentation
c. Marketing mix
d. None of these
33. Selling is ______________?

a. Retaining customers
b. Building long term relationship
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c. Selling product or service against money with short term objective
d. All of these
34. At Maturity phase of product life, business should follow___________

a. Extensive marketing
b. Calculated marketing to keep the customers aware about existence of product
c. No marketing
d. Both b & c
35. Selling follows ______ strategy while Marketing follows ______ strategy.
a. Push , Pull
b. Pull, Push
c. Both correct
d. Both incorrect
36. How many phases are there in a product life cycle?

a. Three
b. Four
c. Five
d. Six
37. Ahmad buys milk , biscuits and flour from a shop. The products are called______
a. Shopping products
b. Specialty products
c. Convenience products
d. Supplies
38. Which of the phase of product life cycle has flat volume of sales?
a. Introduction
b. Growth
c. Maturity
d. Decline
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Chapter 8
Human Resource Strategies
1. Human resources cover following types of employees?
a. Full-time
b. Part-time
c. Both correct
d. Both incorrect
2. Which of the following is not a responsibility of the human resource management function?
a. assess the quantity and quality of human resources currently available
b. estimate the quantity and quality of human resources that will be needed in the future
c. encourage employees of low performance to leave
d. consider ways of ‘filling the gap’ and ensuring that the entity has the human resources tha t it needs
3. The ideal duration of a human resource plan is:

a. three to five years
b. three to seven years
c. below three years
d. over three years
4. Which of the following is not an area to be covered in a human resource plan?

a. Staff recruitment
b. Performance appraisal
c. Marketing campaign
d. Redundancy
5. Which of the following is not the purpose of a job analysis?

a. Job description
b. Job specification
c. Both correct
d. Both incorrect
6. Which of the following is not a stage of recruitment?

a. Agree the vacancy
b. Select the candidate
c. Identify the skills
d. Obtain applications
7. Which of the following is not a stage of selection?

a. Agree the vacancy
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b. Select the candidate
c. Interview the candidate
d. None of these
8. Requesting a candidate’s credit/reference check is part of which of the following human resource
management activity?
a. Recruitment
b. Selection
c. Development
d. Retention
9. Which of the following is not a type of on-job-training?

a. Orientation
b. Job instruction manuals
c. Simulation
d. Apprenticeships
10. Which of the following is a tool of development?

a. Secondment
b. Delegation
c. Both correct
d. Both incorrect
11. Employee turnover is defined as:

a. Staff joining the job
b. Staff leaving the job
c. Staff increasing the revenue turnover
d. Staff increasing the sales turnover
12. Usually compensation package includes:

a. Salaries
b. Gratuity
c. Employees Provident Fund (EPF)
d. All of these
13. HR Plans should consider the following environmental factors.

a. population trends, and the total size of the work force
b. the availability of individuals who are trained in a particular skill or vocation
c. competition for high skill human resources from competitors and other businesses
d. All of these
14. Practices like occasional work from home, flexible work arrangements, `ME' time are ways to help employees
maintain a healthy __________
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a. Work-life cycle
b. Work-life balance
c. Both correct
d. Both incorrect
15. Inviting applications to fill certain vacancies is known as:

a. Selection
b. Hiring
c. Induction
d. Recruitment
16. What are the general reasons of change in the work force?
a. Some existing employees leave the organization, for example, to take a job somewhere else or due to
retirement
b. The labor requirements of the organization will change, as new skills requirements are created and
old skills are no longer required.
c. Both correct
d. Both incorrect
17. ABC Limited decided to fill 50 vacancies in its production department and contract was givento Butt Testing
Consultants to provide suitable candidates for selection. What kind of method did ABC Limited use?
a. Job Fairs
b. Induction
c. Open House
d. Recruitment agencies
18. ______________ is a process in which individuals are taught something specific.

a. Development
b. Recruitment
c. Orientation
d. Training
19. Which TWO of the following are the advantages of Training & Development for the employer?
a. higher productivity, therefore lower costs of output
b. Less pay as training and development is sponsored by employer
c. better performance by employees in their jobs; therefore, higher standards of achievement
d. Trained employees never leaves the organization
20. Which of the Following are not the tools of training?

a. Formal training
b. Computer based training (CBT)
c. Induction
d. Firing employees to learn from mistakes
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21. Formal training may end in an examination, leading to a qualification or certificate – such as a professional
accountancy qualification or an MBA degree. Such training tool is known as:
a. Schooling
b. Induction
c. Orientation
d. Formal training
22. National Testing Services, Pakistan Testing Services, are examples of___________________
a. External Recruiting agencies
b. Magazine
c. Both correct
d. Both incorrect
23. State Bank sends its fresh trainee to ___________ for specialized and intensive coursebefore they can start
the actual work.
a. National Bank of Pakistan
b. National Institute of Bank & Finance
c. Securities and Exchange Commission of Pakistan
d. None of these
24. __________ means making the job ‘richer’ by building more responsibility into it.
a. Job enlargement
b. Job enrichment
c. Job rotation
d. Job satisfaction
25. Appraisal & reviews must be ____________

a. Hard
b. Straightforward
c. Transparent and fair
d. None of these
26. Letting your employees know that you appreciate their efforts, recognizing and highlighting impactful
outcomes is called _____________
a. Recognition
b. Identification
c. Both correct
d. Both incorrect
27. A ___________ is a formal description of a job its purpose and scope and the formal duties and
responsibilities of the job holder
a. Job Analysis
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b. job description
c. Job Specification
d. None of these
28. Which is not an advantage of internal Source of recruitment

a. Time saving
b. New blood
c. Less expensive
d. Motivates existing employees
29. Which is not an advantage of external Source of recruitment

a. New blood
b. More competition
c. Less expensive
d. None of these
30. ______________ can be defined as process of choosing the right person for the right job.
a. Selection
b. Recruitment
c. Induction
d. Orientation
31. Identifying the ________ candidates and _____them to apply for the job is called Recruitment
a. Available, insisting
b. Available, making
c. Potential, Attracting
d. Potential, insisting
32. The advantage of external recruiting is that_____________?

a. They ensure consistency from opening to closing
b. They are useful for companies too small to have dedicated recruiters
c. They are very inexpensive
d. Time Consuming
33. Recruitment is concerned with _______

a. Quantity
b. Quality
c. Both correct
d. Both incorrect
34. A_________ describes the qualifications and skills necessary for a specific job in terms of education
experience personal characteristics and physical characteristics
a. job specification
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b. Job Analysis
c. Both correct
d. Both incorrect
35. During initial screening an applicant completes

a. an application form
b. submits a resume
c. has a brief interview
d. all of above
36. The job application includes information about

a. educational background
b. previous work experience
c. Previous job duties performed
d. All of above
37. Ability and performance tests are used to determine whether an applicant has the skills necessary for the job.
Which of the following tests could not be conducted in this regard
a. Aptitude test
b. Technical test
c. Personality tests
d. Wealth Test
38. A_________ is a straightforward process that a person or company uses to verify a person’s identity, legal
records and education or work history.
a. Background check
b. Financial check
c. Both correct
d. Both incorrect
39. In selection process to identify the most suitable applicant for a job vacancy which of the following documents
could be used
a. Job description
b. job specification
c. Both correct
d. Both incorrect
40. Planning about a job vacancy and getting applications from candidates is called_____
a. Recruitment
b. Job analysis
c. Job description
d. Selection
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41. Miss Angelina, an HR Manager is in the process of preparing a job specification for the vacancy of
Manager Accounts. Select TWO the relevant points in it?
a. Candidate should have 18 years of education
b. Job Responsibilities of candidate
c. To whom shall the candidate report
d. Experience of candidate
42. What are the TWO potential benefits of internal recruitment?

a. Less cost as compared to external recruitment
b. Organization gets new young blood
c. Motivation and productivity of employees increase
d. New ideas
43. What is the first step of on-the-job training?

a. Coaching
b. Job instruction manuals
c. Orientation
d. Work shadowing
44. Which of the following is not an off-the-job training?

a. Game theory sessions
b. Simulations
c. Team building meets and activities
d. Coaching
45. Which of the following does not fall under selection phase?
a. Orientation
b. Interview
c. Test
d. None of these
46. Which of the following is external recruitment?

a. Performance appraisal
b. Internship programs
c. Company magazine
d. List of potential employees ready for promotion
47. The “ME” Time refers to______________?

a. Keeping a chunk of time to pursue a hobby of choice to maintain healthy work-life balance
b. Feeling organization like second home
c. Both are correct
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Chapter 9
Business operations of a manufacturing organization
1. The process to convert resources into finished goods is the responsibility of ___________
a. Finance
b. Sales
c. Operations
d. Marketing
2. Which of the following is not an objective of operations management?

a. focus on quality
b. minimize the costs of materials and labor
c. maximize the sale
d. eliminate all costs that add no value to the finished product
3. Which of the following describes the type of production process that “the firm produces goods one at a time
according to the specific needs or wants of individual customers”?
a. Mass-production
b. Mass-customization
c. Mass-communication
d. Customization
4. Which of the following is a correct statement?

a. In process manufacturing, the basic inputs are converted into one or more outputs.
b. Airplane manufacturing is an example of process manufacturing.
c. Both correct
d. Both incorrect
5. Which of the following is not a factor for selecting a right location for a manufacturing facility?
a. Proximity to resources
b. Proximity to government
c. Proximity to market
d. Manufacturing zone
6. Which of the following is not a type of production facility design arrangement?

a. W-shaped
b. Cellular
c. Fixed
d. U-shaped
7. Which of the following is not a key system for resource planning?

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a. MRP
b. MRPII
c. SQL
d. ERP
8. Which of the following are types of human resource in a manufacturing set-up?

a. Executive management and production manager
b. Line supervisor and cost accountant
c. Both correct
d. Both incorrect
9. Which of the following is not a criterion to group employees by a manufacturing company under the traditional
structuring?
a. Product
b. Process
c. Geography
d. Education
10. Which of the following is not a benefit of a manufacturing operations management?

a. Profitability improvement
b. Efficiency enhancement
c. Teamwork manipulation
d. Waste reduction
11. Decisions regarding type of production process, site selection, facility layout, and resource planning are taken
by_____
a. Fiscal planning
b. HR planning
c. Production planning
d. Financial planning
12. Which of the followings is not a scheduling tool for production control?
a. Critical path method (CPM)
b. Pie graphs
c. Program evaluation and review technique (PERT)
d. Gantt charts
13. How many types of production process are there?

a. 3
b. 5
c. 2
d. 4
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14. How many types of layouts of factory are there for a manufacturing business?
a. Two
b. One
c. Four
d. Three
15. The ______________ layout is a facility arrangement in which the product stays in one place and workers and
machinery move to it as needed.
a. Fixed-position layout
b. Process layout
c. Product layout
d. None of these
16. ________________ is a process the manager uses in distributing work to the subordinates.
a. Mentoring
b. Delegation
c. Both correct
d. Both incorrect
17. Which TWO of the following are factors for selecting a right location for a manufacturing facility?
a. Proximity to resources
b. Illegal objectives
c. Proximity to Government
d. Proximity to marketplace

a. Mass-customization means manufacturing many identical goods at once.
b. Mass-production means manufacturing unique products as per customer’s specific demand
c. Both correct
d. Both incorrect

a. Continuous process is best for high-volume low-variety products with standardized parts such as
nails glass and paper
b. Intermittent process is best for low-volume high-variety products such as those produced by mass
customization or customization.
c. Both correct
d. Both incorrect
20. Find the correct answer from the following statements:

a. division of labor helps specialization and skilled labor
b. Gantt charts and CPM helps in operational management
c. Both are correct
11
67
21. For a manufacturing process, which of the following is more relevant?

a. Recruitment
b. Procurement and logistics
c. Both are correct
22. Which of the following is not an objective of operational management?

a. To focus on quality
b. To minimize cost of material and labor
c. To decrease number of customers for better delivery
d. To eliminate all costs that add no value to finished product
23. Research and Development (R&D) Function is responsible for

a. Developing new products and processes and improving existing ones
b. Ensuring right price is being charges to customers
c. Both are correct
11
68
Chapter 10
Industries of Pakistan
1. During year 2000, Pakistan’s power sector consisted of two Government owned utilities.
a. WAPDA & K-Electric (KE)
b. WAPDA & KESC
c. KESC & KE
d. LESCO & WAPDA
2. KESC was privatized in ___________ as KE.

a. 2004
b. 2005
c. 2006
d. 2007
3. WAPDA unbundled into various GENCOs, DISCOs and ---------------------- --.

a. K-Electric (KE)
b. KESC
c. NTDC
d. O&M
4. Upstream part of power supply value chain is called------------------------ --.

a. Transmission
b. Generation
c. Distribution
d. None of these
5. Which of the following are not used as fuel sources?

a. Natural gas
b. Coal
c. Diesel
d. Plastic
6. Tarif in power sector is determined by_________________

a. WAPDA
b. OGRA
c. NEPRA
d. PEMRA
7. Shortfall of electricity between energy generated and energy billed is called__________________

a. Power losses
b. Line losses
c. Distribution & transmission losses
d. None of these
8. When turbines generate electricity, the voltage is increased by passing it through -------------------------------- --.
a. Grid station
b. Step-up transformer
c. Pole-mounted transformer
d. Distribution lines
9. Textile sector represents approx. -------------------------------------------- % of Pakistan’s total export in 2021.

a. 54
b. 43
c. 57
d. 65
10. All Pakistan Textiles Mills (APTMA) has ______________ numbers of spinning, weaving and
composite units respectively:
a. 315, 124, 165
b. 200, 192, 12
c. 315, 44, 37
d. 110, 202, 20
11. Primary raw materials of Textile industry are cotton, viscose and ______________
a. Thread
b. Polyester
c. Nylon
d. Grass
12. A typical value chain of Textile industry is ____________

a. Spinning, Weaving, Garment manufacturing, Processing
b. Spinning, Raw Material, Weaving, Garment manufacturing, Processing
c. Ginning, Spinning, Weaving, Processing, Garment manufacturing
d. None of these
13. _____________________is a process to convert raw materials into yarn.

a. Weaving
b. Ginning
c. Manufacturing
d. Spinning
14. The longitudinal thread is called----------------------

a. Spin
b. Weft
c. Raft
d. Warp
15. In _____________ process, number of ends required for a given fabric quality are taken from multiple warping
beams to weaving beams:
a. Sizing
b. Drawing
c. Folding
d. Warping
16. ______________ is a process of adding color whereas ____________ is a process of applying color design
and patterns to the fabric.
a. Printing, Designing
b. Dyeing, Printing
c. Printing, Dyeing
d. Designing, Printing
17. There are less than ____________ multinational pharmaceutical companies in Pakistan.
a. 50
b. 30
c. 40
d. 20
18. Pharmaceutical industry is regulated by:

a. NEPRA
b. DRAP
c. PEMRA
d. All of these
19. Pharma companies do not pay following type of fee to regulatory authority:
a. New Drug registration fee
b. Scientific experiment fee
c. Drug manufacturing license fee
d. Drug disposal fee
20. ____________ are undertaken to develop medical research evidence to understand the efficacy of new
medicines in treating diseases.
a. Clinical experiments
b. Diagnostics
c. Medical trials
d. Clinical trials
21. The healthcare sector in Pakistan as a result of poor healthcare services present --------------------- to
pharmaceutical companies.
a. Threat
b. Opportunity
c. Weakness
d. Strength
22. The access to pharma products can be increased by providing__________ to general public.
a. Subsidies
b. National health insurance
c. Life insurance
d. All of these
23. Oil & Gas sector is categorized in three major segments, namely:
a. Upstream, retailing, downstream
b. Upstream, Mid-stream, Down stream
c. Upstream, downstream, retailing
d. Strategic and tactical
24. Gas sector contributes to approximately ____________of total energy supply in Pakistan.
a. 25%
b. 35%
c. 45%
d. None of these
25. Refineries operate in ___________ of oil and gas sector

a. Upstream
b. Mid-stream
c. Down-stream
d. None of these
26. Gas supply chain is relatively _______ than oil supply chain.
a. Simple
b. Complex
c. Difficult
d. Cheaper
27. In ___________, bulk of petroleum products required by Pakistani market are transported by roads, oil
pipelines and railways.
a. Upstream
b. Midstream
c. Down stream
d. None of these
28. Oil is explored and produced in ________ category of Oil & Gas sector.
a. Upstream
b. Midstream
c. Both correct
d. Both incorrect
29. Which one of the following is the biggest company of Exploration & Production sector inPakistan?
a. ENI Pakistan
b. OMV Pakistan
c. Pakistan Oil Fields Limited
d. None of these
30. How many refineries are in Pakistan?

a. 5
b. 7
c. 9
d. 11
31. How many Oil Marketing Companies (OMCs) are in Pakistan?

a. 25
b. 22
c. 28
d. 32
32. Sui Southern Gas Company Limited (SSGCL) distributes Gas to the consumers of___________?
a. Islamabad
b. Punjab and KPK
c. AJK, Islamabad & Punjab
d. Sindh & Baluchistan
33. Bangladesh and India have many _____________approved pharmaceutical plants.

a. Food & Drug Administration (FDA)
b. Food & Chemical Administration (FCA)
c. Both correct
d. Both incorrect
34. The top value-added textile export products of Pakistan are___________

a. Cotton Fabrics
b. Ready Made Garments
c. Caps and shorts
d. Carpets
35. Which TWO of the following are big challenges of Power Industry?
a. Circular debt issue
b. Low demand of energy
c. Timely collection of bills
d. Competition in market
36. Which TWO of the following are salient features of Power Industry?
a. Low-cost industry
b. Run by multinational companies
c. Capital intensive
d. Fixed return ensured to investors
37. _________________ is a process where longitudinal threads and lateral threads are interlaced to
manufacture fabric.
a. Spinning
b. Weaving
c. Ginning
d. Processing
38. _________________ is a process where longitudinal threads and lateral threads are interlaced to
manufacture fabric, while __________________ is the process where raw materials including raw
material and polyester are converted into yarn.
a. Spinning, Weaving
b. Weaving, Spinning
c. Ginning, Weaving
d. Processing, Ginning
39. Payments to healthcare professionals are made mainly for___________

a. Sales of medicines or drugs
b. Lectures, conferences, seminars and discussions
c. Both correct
d. Both incorrect
40. Major cities representing Textile Industry are__________

a. Karachi, Faisalabad, Lahore
b. Lahore, Multan, Sargodha
c. Karachi, Rawalpindi, Gujranwala
d. Faisalabad, Multan, Sialkot
41. What does Midstream do in Exploration and Production?

a. Production
b. Refining
c. Distribution
d. Recovery
42. Which TWO of the following are salient features of Pharmaceutical Industry?
a. Timely collection of bills
b. Payments to DRAP
c. Scientific information
d. Tariff setting
43. Making of Yarn from raw material is called ___________

a. Ginning
b. Spinning
c. Weaving
d. Knitting
44. Which of the following is not a part of Exploration & Production industry?
a. Upstream
b. Lowstream
c. Downstream
d. Midstream

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Chapter 1

2. Which of the following is a Natural resource?

4. Which of the following are not considered as External Stakeholders of a company?

PRC-5 Question Bank by Shahbaz Saeed ACA|1

9. Which of the following are the main concerns of shareholders in a business?

PRC-5 Question Bank by Shahbaz Saeed ACA|2

16. Identify the correct hierarchy of Organizations’ goals:

17. How many factors of production are there in a business?

18. Which of the following are not internal stakeholders?

21. Repayment installments of a loan comprise of:

PRC-5 Question Bank by Shahbaz Saeed ACA|3

22. Generally, the Mission statement is issued by____________

24. The investors who purchase stock are called _______

25. Shares are also called __________________

29. Which one of the followings is not a connected stakeholder?

PRC-5 Question Bank by Shahbaz Saeed ACA|4

30. Objectives should be:

31. Connected stakeholder means a stakeholder who:

34. Company’s goals are an example of .

35. The stake of is to achieve low level of unemployment.

PRC-5 Question Bank by Shahbaz Saeed ACA|5

39. Power of top consultants and banker is example of --------------- --.

41. Which of the following statements is not true?

44. Select TWO most influential stakeholders generally found in an organization:

PRC-5 Question Bank by Shahbaz Saeed ACA|6

PRC-5 Question Bank by Shahbaz Saeed ACA|7

PRC-5 Question Bank by Shahbaz Saeed ACA|8

2. There are no legal formalities needed to set up a _________

5. Which of the following can be run as registered or unregistered.

6. Limited Liability Partnerships are incorporated and regulated under ?

PRC-5 Question Bank by Shahbaz Saeed ACA|9

10. Which of the followings is an advantage of sole owner/proprietor?

11. Find the correct advantage of partnership firm

13. Double taxation applies to:

14. Shareholders have the following rights:

PRC-5 Question Bank by Shahbaz Saeed ACA|10

16. In place of "Profit & Loss statement", Non-profit organization prepares:

17. If income of an NPO exceeds its expenses, it’s called ___________

18. If expenses of an NPO exceeds its income, it’s called ___________

20. Shareholders are also called:

21. Law that deals with partnership businesses in Pakistan.

22. In Clubs, the members are drawn towards_________

PRC-5 Question Bank by Shahbaz Saeed ACA|11

24. Two types of Partnerships:

28. To be successful a sole trader must do which of the following?

29. Which of the following is the disadvantage of sole proprietorship?

PRC-5 Question Bank by Shahbaz Saeed ACA|12

31. A partnership where liability of all partners is limited.

32. The agreement to form partnership is called _____

33. Which of the following is not a type of Limited Company?

36. Which of the following is true about a partnership?

PRC-5 Question Bank by Shahbaz Saeed ACA|13

38. A___________________business is one in which income is generated by the resale of product?

39. Which of the following documents contains offer to subscribe shares?

40. The owners of a partnership business are known as_______

44. In which case a sole ownership is the most favorable?

PRC-5 Question Bank by Shahbaz Saeed ACA|14

47. The independence is one of the key attractions of running a business as

50. In most cases, the maximum number of partners is

51. What type of agreement can be used to form a partnership business?