Chapter 1&2 BTF questions (127 questions) Flashcards
BTF Questions 2024 (Chapters 1-2) 1. Which of the following is NOT a secondary objectives of a business
A. Growth Of Sales
B. Improve Productivity
C. Reduce labour turnover
D. Increase shareholder wealth
1 D The primary objective that is profit maximization ultimately aims to increase shareholder wealth
- Mr. Boula-Constantino buys stuff often from Mayor and Dolce’s Groceria. What do you think he expects from the store every time he comes to buy their products?
A. Fair Terms Of Trade
B. Prompt Payment
C. Pension
D. Safe Working Environment
2 A The answer is (A) as Mr. Boula-Constantino is a customer. Prompt payment is expected by suppliers. Pension and a safe working environment are expected by directors/managers and employees/trade unions.
- Madame Salmona likes to eat salmon. She ate it everyday in fact. In her youth, her father ran a small bakery in the middle of town. Each day, she would go out and catch salmon for her father so that her father can make his famous Salmon Au Pan Rustic, a special French baguette with salmon as its filling. As she grew up, she found fishing salmon to be pretty fun and so she set up a company to fish salmon in large quantities. As this was her business, she would frequently take a small batch of salmon back to her house out of the ones which were caught to can for her personal use. One day, one of her friends came for tea and tried it and suggested to Madame Salmona to sell some of canned salmon around the neighborhood as they were very good. In which Madame Salmona did over the next three years. The question now is, what industry does her organization specialize in?
A. Manufacturing
B. Service Industry
C. Agriculture
D. Retailing
3 C The answer is (C). (B) is most definitely out of the picture as she runs no service industry and (A) and (D) is wrong as the questions asks what does her ‘organization’ specialize in. The answer is (C) as her real organization specializes is catching and selling salmon which is also her main form of business.
- A company director writes a statement stating he wishes to spend or invest more in its Research and Development programme in order to improve its technology. Which statement is it referring to?
A. Mission
B. Goal
C. Primary objective
D. Secondary objective
4 D Technology is one of the secondary objectives that support the primary objective of wealth maximisation of its owners.
- The Commercial Banking Manager of HSBC Petaling Jaya has communicated to its direct operational staff to improve on the time taken to serve customers. The manager has set a Key Performance Indicator (KPI) of 5 minutes per customer as a target to be achieved. What kind of standard has the manager of HSBC Petaling Jaya implemented?
A. Quality Standard
B. Cost Standard BTF Questions 2024 (Chapters 1-2)
C. Physical Standard
D. None of the above
5 A Improving on time taken to serve customers does not reflect (B) Cost Standard or (C) Physical Standard thus it refers to (A) Quality Standards as it can take a variety of forms.
- A statement about what an organization wants to become, which sets out an organization’s long term future, is referred to as:
A. Mission
B. Vision
C. Primary objective
D. Secondary objective
6 B Vision is a statement about what an organization wants to become. It should give shape and direction to an organization’s future. A vision should stretch an organization in terms of its current position and performance yet at the same time it should help employees feel involved and motivated to be part of the organization’s future.
- A statement that sets out what the organization purpose is and wishes to achieve in the long term is referred to as:
A. Mission
B. Vision
C. Primary objective
D. Secondary objective
7 A Mission represents what the organization wishes to achieve in the long term. A mission applies to all parts of an organization and in that sense serves to bind the many parts of an organization together.
- Organisations differ in many ways. Which two of the following ways does a public company in the fast food industry differ from a general partnership in the same industry?
A. Activity
B. Legal status
C. Sources of finance
D. Profit or non-profit orientation
8 B, C Both organisations have the same activity and profit orientation. However, a public company has a legal status of a separate entity while a partnership has no separate entity. The sources of finance also differ.
- Two of Moonlight Tours plc.’s stakeholder groups are putting the company under pressure to show more concern for the welfare of their employees. These are most likely to comprise which TWO of the following groups?
A. Customers
B. The public at large
C. The government
D. Lenders
9 B,C The public at large and the government are stakeholders who have concern for the welfare of employees in any business. Customers are concerned about their custom and lenders, about the money lent to the business.
- Which two of the following is the element of mission?
A. Purpose
B. Vision
C. Policies and standards of behaviour
D. Aim
10 A, C Purpose, Values, Policies and Standards; Strategy are elements of a Mission.
- Objectives set should have which of the following characteristics?
A. Time-bound
B. Measurable
C. Sustainable
D. Suitable E. None of the above
11 A, B Objectives should be SMART: Specific, Measurable, Achievable, Relevant, Time-bound
BTF Questions 2024 (Chapters 1-2) 12. What is the common expectation of customers, suppliers and business partners?
A. Fair terms of trade
B. Prompt Payment
C. Continuity of Custom
D. Interest
12 A (B)Prompt payment and (C) Continuity of custom is expectation of suppliers and business partner but not customers. (D) Interest is expectation of lenders.
- Which THREE of the following are mission statements of a business produces handbags?
A. We will be the most popular brand among ladies in the world.
B. We aim to increase 20% revenue in five year.
C. We will use the latest technology in production systems.
D. We intend to produce handbags in newest design. E. We will reduce producing leather handbags up to 30%. F. We intend to join venture with Gucci.
13 A,C,D Mission is the reason for an organisation to exist, so its statement should be general. BTF Questions 2024 (Chapters 1-2)
- The operational goal for Hi-Technology plc. is to lower the cost of production of the smartphones by 5% by 2016 which last year was 4%. Which of the following characteristics of SMART is the goal lacking of?
A. Specific
B. Measurable
C. Achievable
D. Relevant E. Time-bounded F. None of the above
14 F The operational goal is specific by stating the company wants to lower the cost of production by 5% and it is measurable and achievable. The goal is relevant to the company as smartphones production is the main activity of the business. The date of 2016 is time-bounded
- In the past 3 years, directors of Squek Plc. have run the company in a way that is structured to solely increase their prestige in the business. According to Baumol, this is often referred to as:
A. Wealth maximisation
B. Maximisation of sales revenue
C. Cost minimisation
D. Minimisation of social impact
15 B Baumol argued that businesses act to maximise sales revenue wherever managers are rewarded or revered for the size of the organisation for which they work rather than its profitability or performance
- To see whether an organisation is a business or not, it would be necessary to enquire as to the nature of its:
A. Primary objective
B. Mission
C. Vision
D. Secondary objective
16 A Organisations whose primary objective is to make profits for their owners are classified as businesses
- How do managers benefit personally from revenue maximisation? (Choose two answers)
A. Increase of company’s market share.
B. Increase of salaries.
C. Decrease of intensity of rivalry. BTF Questions 2024 (Chapters 1-2)
D. Prestige of running a successful company.
17 B,D Managers benefit personally because of the prestige of running a large and successful company, and because salaries and other benefits are likely to be higher.
- The chief executive of Summerbay Travel is currently involved in preparing a brochure outlining the services provided by the travel agency. In that document the chief executive hopes to see the agency become the largest travel agency in Malaysia by 2020. The executive is stressing the agency’s:
A. Vision
B. Mission
C. Primary objective
D. Secondary objective E. Aim F. Strategy
18 A Vision concern how the agency sees itself at some future time.
- Cashewnut plc’s objective for its marketing department is ‘increasing sales within a year’. On which of the SMART criteria for objectives does this objective fail?
A. Specific
B. Measurable
C. Relevant
D. Time-bounded
19 B The objective is time-bound and specific, and being related to the marketing division it can be said to be relevant. However, there’s no clue of how much the ‘increase’ is to be measured.
- ABC Aid is a charity providing medical services in cities in UK. The chief executive is currently involved in preparing an information document outlining the services provided by the charity. In that document, the chief executive hopes to stress that in providing its services the charity is always seeking to operate at maximum efficiency. In stressing this aspect of the charity’s operation, the chief executive is highlighting the charity’s?
A. Vision
B. Mission
C. Primary Objective
D. Secondary Objective
20 D The primary objective of a non-profit organization is provision of medical services, while doing this efficiently would be an example of secondary objective.
- For each of the following statements, select the one with the operational objective.
A. Customers expect good quality of products or services from business. Banana Car Rental Ltd aims to satisfy all their customers by giving flexible services based on their requirement.
B. Banana Car Rental Ltd plan to increase their revenue by 20% in the next two years.
C. Banana Car Rental Ltd provides training to their workers for better skill development.
21 B A. Non-operational aim is the qualitative goal. Customer satisfaction will change when circumstances change. It is hard to measure and quantify. B. Operational objective is the quantitative goal. The objective is measurable (revenue increase by 20%) and time-bound (the deadline to complete the objective is in the next two year). C. Train their worker for BETTER skill development is not a measurable term, thus the answer is non-operational aim.
- Jacqueline is the managing director of Wongaline Plc. As a risk averse person, she always prioritizes the minimisation of risks. Due to recent relaxation of government regulations, there has been a sharp increase in the number of new entrants into the industry. In response to this, Jacqueline and the other directors decide to reduce the prices of Wongaline Plc’s products to retain market share. BTF Questions 2024 (Chapters 1-2) They believe this is the best strategy to protect Wongaline Plc’s prestige in the industry, and hence protect the prestige of their jobs. What is most likely Wongaline Plc.’s current objective?
A. Profit maximisation
B. Wealth maximisation
C. Revenue maximisation
D. Satisficing profits
22 C The main reason behind the reduction in prices is to retain Wongaline Plc’s market share in the industry - by forcing out any new competitors, and discouraging any potential competitors from entering the industry. To do so, Wongaline Plc is hoping that customers respond to the lower prices by buying Wongaline Plc’s products, thus increasing sales, and possibly, sales revenue.
- In a high-competition and slow-growth industry, a company has a mission of increasing the company’s sales by 30% within one year. Which two of the following criteria are not satisfied by this mission?
A. Specific
B. Measurable
C. Achievable
D. Relevant E. Time Bounded
23 C,D Due to the current conditions faced by the industry - a mission of increasing sales might not be achievable or relevant.
- “Our priority will be focused on generating the revenue effectively instead of increasing the wealth of shareholders.”, said Mr. Bingsu. However, it was reported that the shareholders were pleased and satisfied with the company’s generated profit. This demonstrates that the top managerial staff practices. . .
A. Profit satisficing
B. Wealth maximisation
C. Revenue maximisation
D. Profit maximisation
24 A Shareholders were pleased and satisfied despite the wealth of shareholders not prioritized
- What do employees typically expect of a business? Choose TWO.
A. Fair terms of trade
B. Repayment of capital
C. Career progression
D. Reasonable environmental and other business practices
25 C, D Fair terms of trade are expected by customers and suppliers, while repayment of capital is expected of lenders
- Which one is included in the wide areas of social responsibilities?
A. Product development
B. Management of risk
C. Profit maximisation
D. Impact on the natural environment
26 D BTF Questions 2024 (Chapters 1-2)
- Select the correct sequence of planning and control system (1) Objectives (2) Actual performance (3) Comparison of performance with plans/standard (4) Setting of plans and standard
A. 1,2,3,4
B. 1,4,2,3
C. 2,1,3,4 BTF Questions 2024 (Chapters 1-2)
D. 4,3,2,1
27 B The correct sequence should be setting out objectives > carrying out planning and strategy on ways to achieve the objectives > carry out the plan > compare the actual performance with plans and standard to identify whether control action need to be carried out or not
- Determine which of the following examples meet the requirement for an operational objective (SMART) for a T-shirt company that has an annual output of 8 million T-shirts in the previous year:
A. Achieve sales of $80 million
B. Achieve production goal of 5 million shoes in 3 months
C. Make more shoes than Adidas during the year
D. Produce 9 million T-shirts over the course of 2018
28 D A is not time bound, B is not relevant, C is too vague, D is specific, measurable (9 million), achievable (9 million vs 8 million), Relevant (T- shirt), and time bounded (2018)
- Kevin Ltd is a company that makes chocolate bars, its goal for the year is to achieve a sale of 100000 chocolate bars, to achieve this goal Kevin Ltd must focus all its financial resource on marketing and distributing its chocolate bars, what is Kevin Ltd trying to achieve:
A. Profit maximisation
B. Revenue maximisation
C. Wealth maximisation
D. Satisficing
29 B because its aim is to focus on sales at all cost ignoring profit and any other factors
- Albert Ltd is a company that produces paper, it is known that he pays his suppliers on time, provides good quality goods to his customers, pays his loans before they are due and provides shareholders of the company with a reasonable profit. However, it is also known that environmental specialist claims that the production process in Albert Ltd produces a lot of chemical waste and is polluting the surrounding environment. Albert Ltd is a company that is responsible for all its stakeholders:
A. TRUE
B. FALSE
30 B it did not show responsibility to the environment which is one of its stakeholders.
- X is a new manager and he wishes the company to reach a desired level of performance. Therefore, he went to the company’s factory and observed the workers. He realized some of the workers are redundant and he needs to dismiss some of the workers. What standard is X trying to achieve?
A. Physical standard
B. Cost standard
C. Quality standard
D. Quantity standard
31 B Dismissal of workers reduces payroll cost. A is wrong because physical standard is about units of raw material per unit produced. C is wrong because dismissal of workers doesn’t affect the quality of products produced by company. D is not in the standards to be met to reach the desired level of performance.
- XXX plc only sells their products to some certain specialty stores and charges at a slightly higher price than its competitors. What objective is XXX plc trying to achieve?
A. Maximise profit
B. Market position
C. Compliance
D. Minimise risk
32 B As these products are not easily available to the public, they may believe these products are the top-of-the-line models and would desire them more. In this case, the company positions themselves as having higher quality products in the markets.
BTF Questions 2024 (Chapters 1-2) 33. The chiefs of Cong Ltd have selected three individuals of its unionised workforce to an inner board of trustees. The council makes proposals to the organisation’s fundamental directorate about all parts of the organisation’s procedures and strategies. These arrangements show the organisation’s concern towards which stakeholder?
A. Customers
B. Trade Unions
C. Suppliers
D. Shareholders
33 B
- The actions, obligations and activities of an organisation in achieving sustainability is known as
A. Business ethics
B. Sustainability
C. Corporate responsibility
D. Reversibility
34 C
- The secondary objective for Jake Clothes Ltd is: ‘To increase sales of the clothes up to 40%’. On which of the SMART criteria of objective does this secondary objective fail?
A. Relevant
B. Specific
C. Time-bounded
D. Measurable
35 C
- In a company, which party is not considered as secondary stakeholders?
A. Directors/Managers
B. Government and its agencies
C. Shareholders/partners/proprietor
D. The natural environment
36 C Shareholders/partners/proprietor are the only primary stakeholders in a business, not secondary
- Which of the following is not an element of mission in a business?
A. Policies and standards of behaviour
B. Values
C. Technology
D. Strategy E. Purpose
37 C Technology is a secondary business objective
- The goal of AXA Ltd for year 2017 is to increase the sales by 7% which is an increment of 2% compared to last year’s. Which type of goals is described?
A. Aim
B. Objective
C. Purpose
D. Plan
38 B Objective is quantitative goal involves numerical figures. Aim is qualitative goal. Purpose and plan are not goals at all.
BTF Questions 2024 (Chapters 1-2) 39. What is the correct sequence for the planning and control system? I. Actual performance II. Objectives III. Comparison of performance with plans/standards IV. Plans and standards
A. IV,III,II,I
B. II,IV,I,III
C. II,III,I,IV
D. IV,II,I,III
39 B
- After 5 years since Alibaba Ltd commenced its business, Alibaba plans to expand their business to East Malaysia. After discussing at the Board, they decided to maximize the revenue regardless of the cost, as long as they do not make a loss. The most effective way is to give discounts. All the Alibaba outlets in East Malaysia will be having sales to attract more customers so that people in East Malaysia is aware of their brand. Besides, they plan to spend more money to advertise their brand in all the big cities of East Malaysia. Which priority is Alibaba focusing?
A. Wealth maximization
B. Profit satisficing
C. Revenue maximization
D. Sustainability
40 C
- Sunshine Education is owned by a group of volunteers from various backgrounds, which strives to end education inequality in the country. They recruit young undergraduates and professionals from all over the country to teach in schools in need, especially the ones in rural areas, which do not have sufficient resources for education like teachers. They fund their operations from donations from public and individuals. Lilith Plc is a car manufacturing company owned by a group of foreign investors which aims to make as much profit as they can from the industry. They fund their business operations by issuing shares to the public and obtaining loans from banks. In what ways do Sunshine Education and Lilith Plc differ?
A. Ownership, size and legal factor
B. Activity, profit or non-profit organisation and technology
C. Activity, sources of finance and size
D. Activity, profit or non-profit organisation and sources of finance
41 D Ownership refers to whether it is from private or public sector. Activity refers to what the organisation does (i.e. Sunshine Education focuses on education services while Lilith Plc focuses on manufacturing cars). Lilith Plc is profit-oriented while Sunshine Education is not profit oriented. Sunshine Education funds their voluntary operations from public and individuals donations whereas Lilith Plc raises funds by issuing shares to the public
- ABC College is an organization that is limited by guarantee, thus the organization does not aim to maximize profit or wealth for its owners. However, ABC College focuses on providing goods and services to their beneficiaries at minimized cost. Based on the description above, which type of organization is ABC College?
A. Profit-oriented organization
B. Non-profit organization
C. Limited liability organization
D. Unlimited liability organization
42 B Non-profit organization are structured and run like business, they don’t aim to maximize profit and wealth for their owners, but instead are focused on providing goods and services to their beneficiaries at minimized cost, a guarantee organization has no share capital. BTF Questions 2024 (Chapters 1-2)
BTF Questions 2024 (Chapters 1-2) 43. Puffy is a local cosmetics company located in the urban area. The company complies with the United Kingdom’s laws on animal testing. The business also takes into account that it needs to constantly research and improve the quality of its products. What expectations would this company provide for its community? i. Product development ii. Welfare of customers iii. Jobs iv. Compliance with regulations
A. i,ii
B. ii,iii
C. i,iv
D. All of the above
43 D Puffy is located in the urban area, therefore there is a flow of jobs. Complies with the nation’s laws. Research and development of the product. Lastly, improved products takes into account the welfare of its customers.
- ABC, a newly incorporated company produces tennis rackets and sells them at the price of $50, where the market price is $55. The directors hope that this could increase their market share. The situation above explains revenue maximization.
A. True
B. False
44 A ABC acts to maximize revenue (not necessarily profit or wealth) is in order to maintain or increase its market share, ensure survival, and discourage competition.
- In 2017, the Association of KFC Franchisee Inc. has introduced its new strategy plan. A group of investors who are interested in setting up a franchise in their town had looked into the strategy plan. “The Association of KFC Franchisee Inc. is united to protect, promote and advance the mutual interests of all member franchisees and the Kentucky Fried Chicken system.” The statement is a:
A. Goal
B. Mission
C. Standard
D. Plan
45 B Mission is the business’ basic function in society expressed in terms of how it satisfies its various stakeholders
- Lily is a primary stakeholder of A Ltd. She has invested money into A Ltd, and management of A Ltd will inform her regularly about the current position of the company as she does not manage the company. Lily is?
A. Shareholders
B. Partners
C. Proprietor
D. Customer
46 A Since Lily doesn’t involve in the management of the company, she isn’t a proprietor.
- For a business which aims to maximise profit as much as possible. Which of the following is not one of its secondary objectives to support its primary objective?
A. Technology
B. Profitability
C. Productivity
D. Market position
47 B Profitability is a primary objective
- In the system of planning and control, if there are deviations identified in the comparison of actual performance with plans. What action(s) should be done to correct the difference? BTF Questions 2024 (Chapters 1-2)
A. Adjust the plan
B. Adjust how the plan is performed
C. Adjust the plan or adjust how the plan is performed
D. None of the above
48 C Where there is a deviation from plan, a decision has to be made as to whether to adjust the plan (if it was unachievable) or adjust how the plan is performed (if performance was sub-standard).
- CW plc is a manufacturer of clothes. It manufactures different type and colour of clothes to a huge range of customers across Malaysia. It has a very good reputation in producing quality shirts with reasonable prices. It obtains raw material of their clothes from their own source. Which of the following is their primary and secondary stakeholders?
A. Primary: Shareholders; Secondary: Lenders, Public, Suppliers
B. Primary: Shareholders; Secondary: Customers, Lenders, Public
C. Primary: Shareholders; Secondary: Suppliers, Customers, Lenders, Public
D. Primary: Shareholders; Secondary: Government, Customers, Suppliers, Lenders, Public
49 B Since CW plc is a public company, so they offers shares to the public, their primary stakeholder is their shareholders. The company obtains raw material from their own sources, so their secondary stakeholders exclude suppliers, so B is the most appropriate answer.
- Summer Holiday Ltd is a company offering vacation packages, it has been running the business for a few years now. Due to economic downfall, its sales hasn’t been growing since 2016. Summer Holiday Ltd has just proposed a new objective: “Our company aims to increase sales by 10% by 2017”. Which characteristic is this objective lacking based on the SMART criteria?
A. Specific
B. Measurable
C. Achievable
D. Time-bound
50 C As Summer Holiday Ltd.’s sales has not been increasing for the previous year, it is kind of impractical to increase sales by 10% within a year of time, hence making its mission unachievable