2026 ACCA Applied Knowledge Level Exam
New Latest Version with All Questions,
100% Correct Answers and Rationale
PAPER BT (F1): BUSINESS AND TECHNOLOGY
50 Questions - 2 Hours
Question 1
Which of the following best describes the primary purpose of a business organization?
a) To maximize employee satisfaction
b) To create value by producing goods and services
c) To minimize tax payments
d) To provide employment
Correct Answer: b) To create value by producing goods and services
Rationale: The fundamental purpose of any business organization is to create value by
producing goods or services that meet customer needs, thereby generating profit for owners .
Question 2
In a matrix organizational structure, an employee typically reports to:
a) One manager only
b) Two managers (e.g., functional and project)
c) No manager
d) The board of directors directly
Correct Answer: b) Two managers (e.g., functional and project)
Rationale: Matrix structures feature dual reporting relationships, usually a functional manager
and a product/project manager .
Question 3
Which of the following is a characteristic of a partnership?
a) Limited liability for all partners
b) Separate legal entity
c) Unlimited liability for general partners
d) Cannot trade internationally
Correct Answer: c) Unlimited liability for general partners
Rationale: In a general partnership, partners have unlimited liability for business debts.
Partnerships are not separate legal entities in many jurisdictions .
Question 4
According to Mintzberg, which part of an organization is responsible for standardizing work
processes?
a) Strategic apex
b) Technostructure
,c) Middle line
d) Support staff
Correct Answer: b) Technostructure
Rationale: The technostructure includes analysts who design systems, standardize work
processes, and apply analytical techniques .
Question 5
Which of the following is an example of a primary activity in Porter's Value Chain?
a) Firm infrastructure
b) Human resource management
c) Technology development
d) Operations
Correct Answer: d) Operations
Rationale: Primary activities are directly involved in creating and delivering value: inbound
logistics, operations, outbound logistics, marketing and sales, and service .
Question 6
Span of control refers to:
a) The number of levels in an organization
b) The number of subordinates reporting directly to a manager
c) The degree of formalization
d) The centralization of decision-making
Correct Answer: b) The number of subordinates reporting directly to a manager
Rationale: Span of control is the number of direct reports a manager has. A wide span means
many subordinates; a narrow span means few .
Question 7
Which of the following is a feature of a tall organizational structure?
a) Wide span of control
b) Short chain of command
c) Many hierarchical levels
d) Decentralized decision-making
Correct Answer: c) Many hierarchical levels
Rationale: Tall structures have many levels of management and narrow spans of control. Flat
structures have few levels and wide spans .
Question 8
The concept of "unity of command" means:
a) Employees should have multiple bosses
b) Each employee should report to one manager
c) Decisions should be made at the top
d) Rules should be strictly followed
Correct Answer: b) Each employee should report to one manager
Rationale: Unity of command is a classical management principle stating that each subordinate
should report to only one superior to avoid confusion and conflict .
,Question 9
Which of the following is a benefit of decentralization?
a) Improved control from headquarters
b) Faster decision-making at local levels
c) Reduced need for skilled managers
d) Standardized procedures across all units
Correct Answer: b) Faster decision-making at local levels
Rationale: Decentralization empowers local managers to make decisions quickly, improving
responsiveness to local conditions .
Question 10
In Herzberg's two-factor theory, which of the following is a hygiene factor?
a) Achievement
b) Recognition
c) Salary
d) Responsibility
Correct Answer: c) Salary
Rationale: Hygiene factors (maintenance factors) include salary, working conditions, and
company policy. They prevent dissatisfaction but do not motivate. Motivators include
achievement, recognition, and responsibility .
Question 11
According to Maslow's hierarchy of needs, which need must be satisfied first?
a) Esteem needs
b) Social needs
c) Physiological needs
d) Self-actualization
Correct Answer: c) Physiological needs
Rationale: Maslow's hierarchy is typically depicted as a pyramid with physiological needs
(food, water, shelter) at the base, followed by safety, social, esteem, and self-actualization .
Question 12
Which management style is characterized by low concern for people and low concern for
production in Blake and Mouton's Managerial Grid?
a) Country Club
b) Impoverished
c) Authority-Compliance
d) Team
Correct Answer: b) Impoverished
Rationale: The impoverished style (1,1) shows minimal effort and concern for both people and
production .
Question 13
Which of the following is a characteristic of a mechanistic organization?
a) Flexible job descriptions
b) Decentralized authority
, c) Rigid rules and procedures
d) Informal communication
Correct Answer: c) Rigid rules and procedures
Rationale: Mechanistic organizations have rigid rules, formal procedures, and centralized
authority. Organic organizations are flexible and decentralized .
Question 14
The role of a non-executive director is to:
a) Manage day-to-day operations
b) Provide independent oversight and challenge
c) Prepare financial statements
d) Audit the company
Correct Answer: b) Provide independent oversight and challenge
Rationale: Non-executive directors bring independence and experience to scrutinize executive
decisions and protect shareholder interests .
Question 15
Which of the following is a principle of the UK Corporate Governance Code?
a) The CEO should also be the Chair
b) There should be a clear division between Chair and CEO
c) All directors should be executives
d) Audit committee is optional
Correct Answer: b) There should be a clear division between Chair and CEO
Rationale: The UK Code recommends separation of roles to ensure balance of power and
prevent excessive concentration of authority .
Question 16
Corporate social responsibility (CSR) refers to:
a) Maximizing shareholder value only
b) Minimizing tax payments
c) Considering social and environmental impacts of business decisions
d) Avoiding all risks
Correct Answer: c) Considering social and environmental impacts of business decisions
Rationale: CSR involves integrating social, environmental, and ethical concerns into business
operations and stakeholder interactions .
Question 17
Which stakeholder group has a direct financial interest in a company's profitability?
a) Local community
b) Environmental groups
c) Shareholders
d) Competitors
Correct Answer: c) Shareholders
Rationale: Shareholders (owners) have the most direct financial interest in company profitability
through dividends and share price appreciation .
New Latest Version with All Questions,
100% Correct Answers and Rationale
PAPER BT (F1): BUSINESS AND TECHNOLOGY
50 Questions - 2 Hours
Question 1
Which of the following best describes the primary purpose of a business organization?
a) To maximize employee satisfaction
b) To create value by producing goods and services
c) To minimize tax payments
d) To provide employment
Correct Answer: b) To create value by producing goods and services
Rationale: The fundamental purpose of any business organization is to create value by
producing goods or services that meet customer needs, thereby generating profit for owners .
Question 2
In a matrix organizational structure, an employee typically reports to:
a) One manager only
b) Two managers (e.g., functional and project)
c) No manager
d) The board of directors directly
Correct Answer: b) Two managers (e.g., functional and project)
Rationale: Matrix structures feature dual reporting relationships, usually a functional manager
and a product/project manager .
Question 3
Which of the following is a characteristic of a partnership?
a) Limited liability for all partners
b) Separate legal entity
c) Unlimited liability for general partners
d) Cannot trade internationally
Correct Answer: c) Unlimited liability for general partners
Rationale: In a general partnership, partners have unlimited liability for business debts.
Partnerships are not separate legal entities in many jurisdictions .
Question 4
According to Mintzberg, which part of an organization is responsible for standardizing work
processes?
a) Strategic apex
b) Technostructure
,c) Middle line
d) Support staff
Correct Answer: b) Technostructure
Rationale: The technostructure includes analysts who design systems, standardize work
processes, and apply analytical techniques .
Question 5
Which of the following is an example of a primary activity in Porter's Value Chain?
a) Firm infrastructure
b) Human resource management
c) Technology development
d) Operations
Correct Answer: d) Operations
Rationale: Primary activities are directly involved in creating and delivering value: inbound
logistics, operations, outbound logistics, marketing and sales, and service .
Question 6
Span of control refers to:
a) The number of levels in an organization
b) The number of subordinates reporting directly to a manager
c) The degree of formalization
d) The centralization of decision-making
Correct Answer: b) The number of subordinates reporting directly to a manager
Rationale: Span of control is the number of direct reports a manager has. A wide span means
many subordinates; a narrow span means few .
Question 7
Which of the following is a feature of a tall organizational structure?
a) Wide span of control
b) Short chain of command
c) Many hierarchical levels
d) Decentralized decision-making
Correct Answer: c) Many hierarchical levels
Rationale: Tall structures have many levels of management and narrow spans of control. Flat
structures have few levels and wide spans .
Question 8
The concept of "unity of command" means:
a) Employees should have multiple bosses
b) Each employee should report to one manager
c) Decisions should be made at the top
d) Rules should be strictly followed
Correct Answer: b) Each employee should report to one manager
Rationale: Unity of command is a classical management principle stating that each subordinate
should report to only one superior to avoid confusion and conflict .
,Question 9
Which of the following is a benefit of decentralization?
a) Improved control from headquarters
b) Faster decision-making at local levels
c) Reduced need for skilled managers
d) Standardized procedures across all units
Correct Answer: b) Faster decision-making at local levels
Rationale: Decentralization empowers local managers to make decisions quickly, improving
responsiveness to local conditions .
Question 10
In Herzberg's two-factor theory, which of the following is a hygiene factor?
a) Achievement
b) Recognition
c) Salary
d) Responsibility
Correct Answer: c) Salary
Rationale: Hygiene factors (maintenance factors) include salary, working conditions, and
company policy. They prevent dissatisfaction but do not motivate. Motivators include
achievement, recognition, and responsibility .
Question 11
According to Maslow's hierarchy of needs, which need must be satisfied first?
a) Esteem needs
b) Social needs
c) Physiological needs
d) Self-actualization
Correct Answer: c) Physiological needs
Rationale: Maslow's hierarchy is typically depicted as a pyramid with physiological needs
(food, water, shelter) at the base, followed by safety, social, esteem, and self-actualization .
Question 12
Which management style is characterized by low concern for people and low concern for
production in Blake and Mouton's Managerial Grid?
a) Country Club
b) Impoverished
c) Authority-Compliance
d) Team
Correct Answer: b) Impoverished
Rationale: The impoverished style (1,1) shows minimal effort and concern for both people and
production .
Question 13
Which of the following is a characteristic of a mechanistic organization?
a) Flexible job descriptions
b) Decentralized authority
, c) Rigid rules and procedures
d) Informal communication
Correct Answer: c) Rigid rules and procedures
Rationale: Mechanistic organizations have rigid rules, formal procedures, and centralized
authority. Organic organizations are flexible and decentralized .
Question 14
The role of a non-executive director is to:
a) Manage day-to-day operations
b) Provide independent oversight and challenge
c) Prepare financial statements
d) Audit the company
Correct Answer: b) Provide independent oversight and challenge
Rationale: Non-executive directors bring independence and experience to scrutinize executive
decisions and protect shareholder interests .
Question 15
Which of the following is a principle of the UK Corporate Governance Code?
a) The CEO should also be the Chair
b) There should be a clear division between Chair and CEO
c) All directors should be executives
d) Audit committee is optional
Correct Answer: b) There should be a clear division between Chair and CEO
Rationale: The UK Code recommends separation of roles to ensure balance of power and
prevent excessive concentration of authority .
Question 16
Corporate social responsibility (CSR) refers to:
a) Maximizing shareholder value only
b) Minimizing tax payments
c) Considering social and environmental impacts of business decisions
d) Avoiding all risks
Correct Answer: c) Considering social and environmental impacts of business decisions
Rationale: CSR involves integrating social, environmental, and ethical concerns into business
operations and stakeholder interactions .
Question 17
Which stakeholder group has a direct financial interest in a company's profitability?
a) Local community
b) Environmental groups
c) Shareholders
d) Competitors
Correct Answer: c) Shareholders
Rationale: Shareholders (owners) have the most direct financial interest in company profitability
through dividends and share price appreciation .
