PRC - 5

INTRODUCTION TO BUSINESS

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN i

First edition published by
The Institute of Chartered Accountants of Pakistan
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Clifton
Karachi – 75600 Pakistan
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© The Institute of Chartered Accountants of Pakistan, February 2024

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The Institute of Chartered Accountants of Pakistan has made every effort to ensure that at the time of writing, the
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ii THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

 TABLE OF CONTENTS

CHAPTER PAGE

Chapter 1 Nature of business 1

Chapter 2 Ownership of business 11

Chapter 3 Organization of business 21

Chapter 4 Sources of business finance 31

Chapter 5 Information systems 41

Chapter 6 Business ethics 51

Chapter 7 Marketing concepts 61

Chapter 8 Human resource strategies 71

Chapter 9 Business operations of a manufacturing organisation 81

Chapter 10 Industries of Pakistan 91

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iv THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN
 CHAPTER 1

NATURE OF BUSINESS

1. Sports shoe brands constantly update their product lines by making use of innovative technology, as competitive
business world require to provide.
a) Customer care
b) Quality of products
c) Value for money
d) All of the above

2. Non-profit organizations do not engage in marketing activities to help reach their goals.
a) True
b) False

3. SMART objectives created by an airline company.

a) May generate stress through a constant pressure
b) Achieve market growth
c) Develop investors trusts
d) All of the above

4. Manager of favFood outlet is keen to serve customers with smile not because.
a) Customers are key stakeholders
b) Profit is generated by continuous sales
c) It is a legal compliance
d) Environment responsibility

5. Every business begins as a result of ideas about a product or service by one or more entrepreneur.
a) True
b) False

6. Aina is working for Breez town. She is responsible for services to clients with excellent level of service. She
delivers services with motto of “best care” which is a part of:
a) Mission statement
b) Vision statement
c) Goals
d) Objectives

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CHAPTER 1: NATURE OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

7. Telefar is a telecommunication company that also serves all poor people in town with free meals. It is part of:
a) Objectives
b) Social responsibility
c) Mission
d) Vision

8. 50 percent of the total sales of Suits4all is being spent on advertising campaigns since 4 years. This is a part of:
a) Strategy
b) Marketing
c) Goals
d) Objectives

9. SAMSUNG has partnered with a supplier of cooling systems to replace all ACs in the head office. Samsung is
working with:
a) Internal Stakeholder
b) External Stakeholder
c) Connected Stakeholder
d) None of above

10. In a university Management of admission department during admissions with 80 seats and 500 applicants have:
a) High Level of power, low level of interest
b) High level of power, high level of interest
c) Low level of power, low level of interest
d) Low level of power, high level of interest

11. University management of admission department in upper case is:

a) Internal stakeholder, key players
b) Internal stakeholder. Keep satisfied

12. . A mission statement is:

a) Where you are and why you do what you do.
b) Defines values of organisation
c) Is well understood by the employees of the organization
d) All of the above

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 1: NATURE OF BUSINESS

13. To achieve and maintain profitability, businesses have found that they must do the following:
a) Operate efficiently
b) Be socially responsible
c) None of the above
d) A and B

14. The money a company receives by providing services or selling goods to customers:
a) Revenue
b) Cost
c) Profit
d) Expenses

15. Building a high quality of life is a combined effort of:

a) Businesses
b) Government
c) Not-For-Profit Organizations
d) All of the above

16. Quality of Life can be achieved by organization activities like:

a) Employment generation
b) Services
c) Products
d) All of the above

17. Earning profits contributes to society by providing employment, which in turn provides money that is
reinvested in the economy. In addition, profits must be earned in:
a) Ethical and socially responsible manner.
b) Local currency only
c) Strategic manner
d) Competitive markets

18. To ____________, a person or organization needs management skills to plan, organize, and control the activities of
the business and to find and develop employees so that it can make products consumers will buy
a) Run a business
b) Earn profit
c) Manage Sole proprietorship
d) Control partnership

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CHAPTER 1: NATURE OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

19. PharmaSafe is producing various lifesaving drugs. PharmaSafe should operate within the confined boundaries
of _____________ to avoid any problem from the government.
a) Marketing and sales
b) Policies and strategies
c) Laws and regulation
d) Taxes and costs

20. Fine paper (Pvt) Ltd is a paper manufacturing company. Fine paper is under a lot of pressure from key rivals
that are able to produce low price paper to acquire a bigger market share. As a response strategy, management
of fine paper is stressing to reduce the production cost by 20% so that they can stay competitive by reducing
the prices of their products. Fine paper is focusing on:
a) Strategy
b) Tactics
c) Policies
d) Procedures

21. Top oil refinery in the country is leading the oil industry for the last decade. The reason behind this success is
attributed to the strategic planning of the management in the strategic planning process.
a) Goals, objectives and strategies should be decided with the aim of fulfilling the entity’s purpose.
b) Developing SMART goals
c) Stakeholders’ analysis is key to success
d) All of the above

22. Which of the following does not really discuss the present state of the organization but more what the
organization wants to be and how it wants to be viewed?
a) Mission statement
b) Goals
c) Objectives
d) Vision statement

23. Mission statement is formally communicated in written form to all the key stakeholders of the business. It acts
as value driven force for strategist and action teams. Which statement best describes on of the key
characteristics of the mission statement.
a) Mission statement is time bound
b) Mission statement is changed yearly
c) Mission statement is based on industry
d) Mission statement is rarely modified

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 1: NATURE OF BUSINESS

24. The main difference between mission and vision is that mission statement reflects
a) Product and services
b) Stakeholders
c) Current perspectives
d) Resources and capabilities

25. A corporate objective might be to double the share price within the next ten years. Which of the following is the
key characteristic of objectives?
a) Objectives are always quantified
b) Objectives are always qualitied
c) Objectives are broader goals
d) None of above

26. Musa and Co are tax consultants operating under the arrangement of partnership. Ideally, the mission
statement of Musa and Co is developed by:
a) Owners
b) Directors
c) Managers
d) Employees

27. Physical facilities are typically necessary to produce many goods and services. Especially in recent years,
technology has enabled businesses to use their capital more effectively. Which of the following could be an added
advantage of use of technology in the business organizations?
a) It adds efficiency
b) Used for efficiency
c) Efficiency and effectiveness are enhanced
d) Use for Management goals

28. Suppliers provide a business with:

a) Raw material and supplies
b) Finished goods and services
c) Consultancy
d) None of the above

29. WINTERGas is gas supplier to domestic users. It is governed by board of directors that include highly
experience individuals appointed as Non-Executive Directors (NEDs). Appointing independent NEDs to the
company board of directors is good for:
a) Corporate governance practice
b) Government regulation
c) Supporting corporate strategies
d) Company law compliance

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CHAPTER 1: NATURE OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

30. Organizations’ strategies regard stakeholders’ power as vital for operations’ success. Power-interest matrix is
used to categorize relevant stakeholders based on their power or influence and level of interest in a project or
an entity
a) True
b) False

31. Family members having medical experience, initiated a private hospital. All members will exercise equal
control over business
a) True
b) False

32. Public sector organizations are one of types of not-for-profit organization that are funded by the government to
achieve social indicators of the country like:
a) Employment
b) Quality of life
c) Education
d) All of the above

33. Government interest in commercial organization include all of the following EXCEPT:
a) Taxes
b) Employment generations
c) Economic boast
d) Voter influences

34. Select two Factors of productions which constitute people.

a) Labor
b) Entrepreneurship
c) Board of directors
d) CEO

35. Customers can switch from one product to another product if their interests are not satisfied because
customers have high ____________
a) Position power
b) Market power
c) Decision power
d) Buying power

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 1: NATURE OF BUSINESS

36. Environmentalist are raising their concern about factory air pollution. They have High interest and high level of
power to influence operations of the businesses.
a) True
b) False

37. GENmate health products is affirm on improving health standards for everyone. This is reflected in firm’s
_______________
a) Mission statement
b) Aims
c) Slogans
d) Strategies

38. Vision is established by companies only.

a) True
b) False

39. Goals are expectations of stakeholders and termed in quality

a) True
b) False

40. Quantitative objectives can serve as:

a) Motivation for employees
b) Market trend setters
c) Basis for production schedules
d) Process mile stones

41. Core activities of a cement factory include cash management from daily sales. Which of the following area
covers cash management?
a) Strategic plan
b) Mission statement
c) Operational plan
d) Tactical plan

42. Departmental manager of each business function is responsible for the department’s
a) Operational plans
b) Tactical plans
c) Task efficiencies
d) All of the above

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CHAPTER 1: NATURE OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

43. Operation plans mainly focus on efficient production of goods and services with an effort to save costs.
a) True
b) False

44. Setting sales targets for each salesperson for the next quarter is a ___________ objective.
a) Specific
b) Measurable
c) Agreed upon
d) Time bound

45. The capital as a factor of production only includes money in banks and in the form of cash.
a) True
b) False

46. Modern business in competitive world run on another vital factor of production considered as fifth factor. This
fifth factor is called as:
a) Energy
b) Power
c) Technology
d) Knowledge

47. Business in tough competition is forced to change its products and services to meet customers’ demands. The
business in such competitive environment should focus on:
a) Strategic plan
b) Operational plans including change
c) Tactical plans considering innovation in each task
d) All of the above

48. Which of the following is not SMART in terms of setting objectives?

a) Specific
b) Maintained
c) Agreed
d) Realistic
e) Time bound

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 1: NATURE OF BUSINESS

49. Non for profit organization have:

a) Goals
b) Objectives
c) Aims
d) All of the above

50. Top hotels chains reflect employee’s role in

a) Vision
b) Mission

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CHAPTER 1: NATURE OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

ANSWERS TO SELF TEST QUESTIONS

1 D 11 B 21 A 31 B 41 C

2 B 12 D 22 D 32 D 42 B

3 D 13 D 23 D 33 D 43 A

4 C 14 A 24 C 34 A, B 44 B

5 A 15 D 25 A 35 D 45 B

6 A 16 A 26 A 36 B 46 D

7 B 17 A 27 C 37 A 47 D

8 D 18 B 28 B 38 B 48 B

9 B 19 C 29 A 39 A 49 D

10 A 20 B 30 A 40 A 50 B

10 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

 CHAPTER 2

OWNERSHIP OF BUSINESS

1. MezBox computers is a sole owner business producing and selling industrial computers. The business has
pending payments to suppliers for a quantity of components purchased the delayed payments are completely a
responsibility of:
a) Owner
b) Line Managers
c) Shareholders
d) Finance Manager

2. NoshShoes is a Private Limited company that is facing a legal action from the basketball players who suffered
foot injury due to poor finishing of their sportswear range. The case will be:
a) Player Vs. Directors
b) Player Vs. Stakeholders
c) Player Vs. Noshshoes
d) Player Vs. Management

3. Mr. Ali as a director of Poppan co. is accused of a financial fraud involving customers and company account. Mr.
Ali is required to make payments to court from:
a) Company Account
b) Personal Account
c) Family Account
d) Drawings

4. A Company is owned by family of 5 individuals who all collectively run the business. It would be recognized as:
a) Corporation
b) Private Limited
c) Partnership
d) Public Limited

5. The profit earned by Tour and Travels for the year 2021 will be retained to expand the business. ___________
business has the discretion to use the profit in whatever mean it wants.
a) Partnership
b) Limited company
c) Sole proprietorship
d) NGO

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CHAPTER 2: OWNERSHIP OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

6. A portion of business ownership which is traded in the stock market is known as:
a) Shares
b) Bonds
c) Credits
d) none of the above

7. In a public company with its shares traded in stock market who would be responsible for formulating the
business strategy:
a) Employees
b) NED
c) CEO
d) Chairman

8. Who is concerned that whether board of directors are operating within the framework of cooperate
governance:
a) CEO
b) NED
c) Chairman
d) Manager

9. MAXPower produce batteries in huge quantity optimizing space and labor. Such large scale production with the
aim of saving cost is a part of:
a) Strategy
b) Financial Management
c) Economy
d) Economies Of Scale

10. A public limited company wishes to convert back to private limited company. They have to:
a) Reregister
b) Private Limited
c) Buy back all the share issued to general public
d) Declare Insolvency

11. Risk of failure of a business is high due to dependency on single person in:
a) Public Limited
b) Private Limited
c) Sole Proprietorship
d) Partnership

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 2: OWNERSHIP OF BUSINESS

12. Board of directors of public limited company act as:

a) Agents of the Company
b) Agents of the Shareholders
c) Agents of The Stakeholders
d) Agents of The Owners

13. A small coffee house in city is operated by Saad. He manages all operations and ensure customers are served
with satisfactions as he is a sole proprietor, he is working in the capacity of:
a) Business owner
b) Business manager
c) Business employee
d) All of the above

14. As a sole proprietor Moona is running her own beauty salon. She received the training from a local beautician
college. Being sole owner of the business, she may have her limits in which of the following capacities:
a) Managerial
b) Technical
c) Purchase of beauty products
d) All of above

15. The life of sole proprietorship is very:

a) Stable
b) Very Short Life
c) Unstable
d) Long Life

16. Sole proprietorship may come to an end due to

a) Failure
b) Insanity
c) Death
d) All Of the Above

17. Meeshah is running an interior design shop as a Sole proprietorship business owner. she bears:
a) Restricted Liability
b) No Liability
c) Limited Liability
d) Unlimited Liability

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CHAPTER 2: OWNERSHIP OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

18. New bookshop’s owner needs some funds to purchase books. It is fairly easy for the owner to approach
financial institutions such as banks and take loan from then without any problem.
a) True
b) False

19. When a doctor or lawyer wants to set up consulting services, government may require which of the following
certification:
a) Company incorporation certificate
b) Professional qualification Certification
c) Trade Regulator Certification
d) All of The Above

20. Following is NOT an essential element of partnership:

a) At Least Two People
b) There Is an Agreement Between All Partners
c) Equal Share of Profit
d) Partnership Agreement for Some Business

21. Sami and Jamal decided to set up a combined business with equal investment and profit sharing. The best
approach is that they should register their business under:
a) Sole proprietorship
b) Company
c) Partnership
d) NGO

22. What should be the minimum number of people to form a partnership:

a) 2
b) 7
c) 10
d) 20

23. When all partners are running the firms, handling disputes is the responsibility of SECP
a) True
b) False

24. Liability of general partners in a limited partnership is:

a) Fixed
b) Unlimited
c) Not Defined in The Law
d) Limited to The invested Capital Only

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 2: OWNERSHIP OF BUSINESS

25. Which element is most essential for dissolution of partnership

a) Compliance to law
b) Division of assets
c) Tax payment
d) Completions of assignments

26. Sr. Manager of ColaCool is making plan for next year marketing in the cricket league matches, this is critical for
the next year sales and profit targets, marketing plan is part of:
a) Strategy
b) Responsibility
c) Crowding
d) Authority

27. Managers in functional departments are responsible for all department activities. Line of authority refer to use
of resource as per given task:
a) True
b) False

28. CEO of ZIPZAP toys is keen in knowing the overall environmental impact when toys are disposed of. This falls
under:
a) Making overall plans
b) Ensuring contracts are completed on time
c) Formulating strategy for the company
d) Financial management

29. The total investment to be made in a new project in a limited company is usually authorized by:
a) Board of Directors
b) CEO
c) Shareholders
d) Chairman

30. Registering a business as a limited partnership is advisable when the business risk is:
a) High
b) Low

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CHAPTER 2: OWNERSHIP OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

31. Corporations pay tax for the sake of regulations as they are incorporated, and it is mandatory for the
corporations to follow tax laws. Which of the following statement is true concerning taxation of a company.
a) Taxes are deducted on fixed rate
b) Taxes are part of revenue
c) Taxes are calculated from sales
d) Taxes are paid from personal accounts of owners

33. The decision making in partnership can be delayed due to:

a) absence of one partner during decision making process
b) conflict amongst partners during decision making process
c) complaints from the customer
d) Strike by the employees

34. Sole proprietor personal assets are can be sold when settling the liabilities
a) True
b) False

35. Private and public companies are incorporated under company law, Company law is NOT designed to
a) Protect stakeholders’ rights
b) Encourage investments
c) Ensure Ethical practices
d) Maintain production efficiency

36. Which organizations has higher degree of decision-making freedom

a) Sole proprietor
b) Public limited
c) Public Sector
d) Clubs

37. People become owners of a company by purchasing shares of stock. It is possible when companies go through:
a) IPOs
b) Investments
c) supply chain
d) Value added services

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 2: OWNERSHIP OF BUSINESS

38. Which of the following is not responsible for achieving corporate goals and objectives in a public limited
company
a) CEO
b) CFO
c) Managers
d) Shareholders

39. SenseAI is software company listed in Karachi stock market. The company made a profit of Rs. 200 million last
year. The company has also announced a dividend of 20% on profit after tax. The tax will be charged on:
a) Profit of the year
b) Dividends received by shareholders
c) Both a and b
d) none of the above

40. Non for profit / Charities are established for achieving objectives in
a) Environment services
b) Social services
c) Animal protection and care
d) all of the above

41. Motorway police has established an organization for the welfare of their families in terms of children education
and health cover of family members. Annual contribution serve the needs of all members. This setup is referred
to as:
a) Club
b) Cooperative
c) Government institution
d) NGO

42. Public sector organizations funding needs are met with

a) Taxes
b) Donations
c) Investments
d) Charity

43. Charities do not require any legal documentation for starting services
a) True
b) False

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CHAPTER 2: OWNERSHIP OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

44. Clubs collect money from membership fee and subscriptions

a) True
b) False

45. Public sector organization provide essential services to

a) General public
b) Taxpayers only

46. SECP procedures for incorporations of companies are same as

a) Clubs
b) NGOS
c) Cooperatives
d) None of the above

47. In a limited partnership, at least one partner is _________ partner, whose liability is __________
a) General, Limited
b) Specific, unlimited
c) Limited, limited
d) General, unlimited

48. The closure of company is done through mutual understanding of all shareholders
a) True
b) False

49. Usually the ____________ receives a larger share of the profits after the limited partners have received their initial
investment back.
a) Limited
b) General
c) Specific
d) Standard

50. Board of Directors is a mix of

a) EDs and NEDs
b) CEO and EDs
c) CEO and Managers
d) EDs and Chairman

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 2: OWNERSHIP OF BUSINESS

ANSWERS TO SELF TEST QUESTIONS

1 A 11 C 21 B 31 A 41 B

2 C 12 B 22 A 32 C 42 A

3 B 13 D 23 B 33 B 43 B

4 B 14 A 24 B 34 A 44 A

5 C 15 C 25 A 35 D 45 A

6 A 16 D 26 A 36 A 46 D

7 C 17 D 27 B 37 A 47 D

8 B 18 B 28 C 38 D 48 B

9 D 19 B 29 A 39 C 49 B

10 C 20 C 30 C 40 D 50 A

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20 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

 CHAPTER 3

ORGANIZATION OF BUSINESS

1. During orientation of newly inducted trainees in a firm, the manager explained the importance of organization
hierarchy and stressed that each trainee should know his/her role and placement in the hierarchy. This will
benefit the organization and help smooth flow of key organizational working. The manager knows that:
a) The right structure helps organization achieve its goals
b) Trainee would never understand their role unless they are explained
c) Organizations always need a structure to operate
d) The profits are directly linked with the hierarchy

2. An organizational structure is the formal arrangement within an organization that defines:

a) Formally division of tasks and activities
b) How processes and information would flow within this structure
c) How to maximize profit
d) What market competitions is beneficial
i) A and c
ii) A and b
iii) C and d

3. National Guard work in formal structures of clear line of authority and control. Formal structure is needed by
organizations for:
a) Efficiency out of all operations
b) Effectiveness of tasks
c) Coordination of all operations
d) All of the above

4. Most of the failures of government owned organizations in Pakistan are due to wrong structure that creates
tensions between employees and officers leading to:
a) Inefficient work practices
b) Increased profitability
c) Enhanced public trusts
d) More productivity

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CHAPTER 3: ORGANIZATION OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

5. Generations Textile Ltd has outsourced its Information technology function to SmoothApps IT company
because
a) Outsourcing of non-core activities to specialists enhance productivity
b) Outsourcing of core activity is for better efficiency
c) Outsourcing increases the cost
d) Outsourcing enhances the productivity of the organization

6. NewTech Corporation Ltd has hired experienced managers to head various business functions such as
marketing, finance, human resources, and IT. Each manager should contribute to the achievement of:
a) only units goals
b) financial goals to earn more incentives
c) overall objectives
d) None of the above

7. JF 786 is designed and developed by Pakistan Aeronautical experts and special advisors from SkyClear jets
company. SkyClear experts are working in horizontal fashion to provide expert support to the new project.
Which of the following statement(s) characterize SkyClear
a) The matrix organization is also called the project management approach of organizational structure.
b) It combines functional and product departmentalization from Pakistan aero, complementing their
strengths and weaknesses, which brings together people from different functional areas of SkyClear
organization (such as manufacturing, finance, and marketing) to work on a special project.
c) Each employee has two direct supervisors: the line manager from her or his specific functional area and
the project manager.
d) All of the above

8. Udrive is a cab company with application software to get personal car owners register as shared car system.
People look for best option and opt for the ride. Udrive may be a:
a) Project company
b) The virtual company
c) Entrepreneurial setup
d) Group of companies

9. The decision-making and planning and control activities are decentralized (‘devolved’) at the regional manager
to adjust according to market environment. Which of the following best characterize devolution of decision
making:
a) Decentralization provides effective decision making
b) Centralisation is suitable for such regional decisions
c) Decentralization results in tall structure
d) Centralization results in flat structure

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10. It is difficult to control a large and complex entity from head office without delegating substantial amounts of
authority to divisional managers.
a. True
b. False

11. An organization is owned and run by central government agencies. The organization is best described as
a) Independent organization
b) private sector organization
c) public sector organization
d) Virtual organization

12. Aiota Ltd (AL) is a manufacturing organization that produces homecare products. Currently AL is serving the
needs of a single city only with a workforce of 50 people. Which structure suits AL the best:
a) Function
b) Divisional
c) Entrepreneurial
d) Matrix

13. Nestle has divided its business in different countries whereby each country has a different managerial hierarchy
meeting the needs of that specific country. The structure Nestle may be opting is:
a) Production divisions
b) Geographic divisions
c) Customer divisions
d) Process divisions

14. Manager of local bank has staff of 12 people under his supervision to manage the entire branch and serve
customers. This structure is:
a) Tall-narrow
b) Tall-flat
c) Flat-narrow
d) Wide-flat

15. Decision making and problem solving is slow in wide-flat structured organizations
a) True
b) False

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CHAPTER 3: ORGANIZATION OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

16. A software company with all application developers working from home is usually
a) Tall-narrow
b) wide span of control
c) Short chain of command
d) Only b and c

17. Managers are empowered in

a) Centralised tall-flat structure
b) Decentralised tall-wide structures
c) Centralised tall-wide structures
d) Decentralised wide-flat structures

18. Poor selection of structures in any organization results in

a) Low motivation and morale among employees
b) More productivity
c) More competitiveness
d) Growth and profitability

19. A Food company in Pakistan specialises in canned processed food. The management has structured the company
in a way that in each city there is a separate production facility for all products along with all business functions
such as marketing, HR, finance, and IT. The company is structured as:
a) Process divisions
b) Geographical divisions
c) Customer divisions
d) Product divisions

20. Product division enables companies that function in several locations to be less responsive to customers at a
local level.
a) True
b) False

21. Which of the following organizations would rely most heavily on social indicators and efficiency rather than
information on performance and profitability?
a) A private accountancy college
b) A city mayors office
c) A small retailer shop
d) None of the above

24 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 3: ORGANIZATION OF BUSINESS

22. Matrix organizations can restrict the performance and efficiency of the organization in terms of:
a) Slow communication
b) Conflicts due to dual chain of command
c) Specialization
d) Decentralization

23. Yanpoo plc is a growing Chinese organization which has recently diversified into a number of significant new
product markets. It has also recently acquired another company in one of its overseas markets. What would be
the most appropriate form of organization for Yanpoo plc?
a) Geographical departmentalization
b) Divisionalization
c) Functional departmentalization
d) None of the above

24. Which of the following principles of classical management is challenged by matrix management?
a) Unity of command
b) Structuring the organization on functional lines
c) Structuring the organization on geographical lines
d) Decentralization of decision-making

25. Which of the following statements about the informal organization is not true?
a) Quick decision making
b) Creative and innovative
c) Strong team relations
d) More documentations

26. Which one of the following is a disadvantage of centralization?

a) It motivates the employees at the lower level in the hierarchy
b) It overburdens top managers in terms of workload and stress
c) Senior managers have all the knowledge to make perfect decisions
d) All of the above

27. Organizational structures should be flexible enough to

a) Accommodate growth
b) Ensure new compliances
c) Follow international practices
d) All of the above

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN 25

CHAPTER 3: ORGANIZATION OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

28. Different airlines operating on international routes adopt organizational structures to achieve efficiency and
effectiveness. Which of the following statements is true:
a) All airlines have similar structures
b) International airlines have similar structures
c) Structures suit the needs of the shareholders
d) Structure vary from airline to airline based on the volume of business and level of services offered

29. Organizational structures allow authority and responsibility to be used for the achievement of overall
objectives such as
a) Functional objectives
b) Strategic objectives
c) Personal objectives
d) All of the above

30. Ayla is a gardening expert, she controls the entire business. She serves the customers as per their
requirements. She can hire few people to help her redesign the gardens. Which structure is appropriate for
her:
a) Entrepreneurial structure
b) Functional structure
c) Divisional structure
d) Product structure

31. Organizational structures are direct means of controlling the organization resources for optimum results.
a) True
b) False

32. Public sector organizations define roles of different position holders with respect to the
a) Government policies
b) Media pressures
c) Market demand
d) Shareholders expectations

33. Because local managers have better knowledge of the market conditions and customers’ choice,
organizations opt for:
a) Centralized structure
b) Tall-narrow structure
c) Decentralized structure
d) Projectized structure

26 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 3: ORGANIZATION OF BUSINESS

34. Span of control depends on all of the following factors EXCEPT:

a) Managers’ capabilities
b) Nature of workload
c) Level of cohesiveness in teams
d) Nature of the organization

35. An organizational _____________ is a formal arrangement of activities that bring efficiency and effectiveness for the
achievement of business/organizational _________________
a) Plan, Goals
b) Strategy, Objectives
c) Structure, goals
d) Structure, management

36. Choosing the correct management structure ensures an organization’s

a) Growth
b) Employee satisfaction
c) Good Profit
d) All of the above

37. In an early phase best structure is

a) Functional
b) Entrepreneurial
c) Divisional
d) None of the above

38. Which act in companies protect interest of shareholders, creditors, stakeholders

a) Employment act
b) Partnership act 1932
c) Stack-holder protection act
d) Companies Act 2017

39. In a functional setup, managers’ own preferences can hinder communication and decision making between
units and even promote interdepartmental conflict.
a) True
b) False

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CHAPTER 3: ORGANIZATION OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

40. Organizations having too many divisions can result in

a) Cost increase
b) Goal congruence
c) More market power
d) Enhanced productivity

41. Divisions tend to focus on their own needs and goals at the expense of the organization as a whole.
a) True
b) False

42. The matrix structure is not suitable where

a) Culture is to obey one leader
b) Complex projects are managed
c) Communication is key
d) Innovation is required

43. Functional structures allow employees to set

a) Financial goals
b) Career goals
c) Social goals
d) All of the above

44. Decentralisation provide competitive advantage with environmental alignment of

a) Strategic business unit Goals
b) Managers decisions
c) Project planning
d) Resource management

45. Each manager in decentralized setup establish own objectives with

a) Clear separate objectives
b) SMART objectives of own choice
c) Intervals
d) Corporate objectives in sight

46. Team effectiveness is key to virtual organization rather than external relationships
a) True
b) False

28 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 3: ORGANIZATION OF BUSINESS

47. A key to a successful virtual organization is the effective management of all the different Internal relationships,
and co-ordination of their activities
a) True
b) False

48. CEO of Tonetel receive reports from functional mangers that have been compiled after supervisors’ feedback.
This represents:
a) Span of Control
b) Chain of Command
c) Centralization
d) Decentralization

49. Project manager in virtual company is always connected to all employees via internet link as in virtual setup
a) No physical infrastructure is available
b) Employees work remotely
c) Data flows to all employees and work is done
d) All of the above

50. A virtual company relies heavily on:

a) Land
b) Labor
c) Capital
d) External service providers

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CHAPTER 3: ORGANIZATION OF BUSINESS PRC 5: INTRODUCTION TO BUSINESS

ANSWERS TO SELF TEST QUESTIONS

1 A 11 C 21 B 31 A 41 A

2 (ii) 12 A 22 B 32 A 42 A

3 D 13 B 23 A 33 C 43 D

4 A 14 D 24 A 34 D 44 A

5 A 15 B 25 D 35 D 45 D

6 C 16 E 26 B 36 D 46 B

7 D 17 D 27 D 37 B 47 B

8 B 18 A 28 D 38 D 48 B

9 A 19 B 29 D 39 A 49 D

10 A 20 B 30 A 40 A 50 D

30 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

 CHAPTER 4

SOURCES OF BUSINESS FINANCE

1. TELEFAR is telecom company which is financed by its owners. The assets are purchased from ASB Bank. The
Payment is made to bank on monthly basis. City towers of telecom are pledged for further cash raising to make
payment to suppliers. Asif is the finance manager who is responsible for planning the financial needs of the
company for current and future operations.

a) Asif ensures that funds management is always in line with _____________ of the company.
i) Business plan
ii) Market competition
iii) Financial problems
iv) Goals and Objectives

b) TELEFAR manages its cash flows to make timely payments it is

i) Art of financial management
ii) Science of financial management
iii) Documentation of accounts
iv) Business operation

c) Funds raised from ASB bank are

i) Assets
ii) Liability on Telefar
iii) Liability on owners
iv) All of the above

d) In case of Liquidation of Telefar all assets will be sold to make payment to ASB bank and owners will not be
forced to sell their personal assets to settle the liabilities.
i) True
ii) False

2. Funds required for purchasing current assets to start a new factory to produce jackets is an example of
a) Fixed capital requirement
b) Ploughing back of profits
c) Working capital requirement
d) Lease financing

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CHAPTER 4: SOURCES OF BUSINESS FINANCE PRC 5: INTRODUCTION TO BUSINESS

3. Shareholders in PulseMED (a public limited company) can vote in meetings, on various matters they are called
a) Owners of the company
b) Partners of the company
c) Executives of the company
d) Directors of the company

4. The term 'redeemable' is used for

a) Commercial paper
b) Equity shares
c) Public deposits
d) Bonds

5. The key activities of the financial manager include all of the following EXCEPT:
a) Investments
b) Supplier negotiations
c) Financial planning
d) Financing

6. Which of the following long-term debt instruments involving two parties- the borrower (issuer) and the lender
(buyer or investor).
a) Loan
b) Stocks
c) Lease
d) Bonds

7. Lease agreement is secured against the asset. In case of non-payment, the asset may be
a) Sold in market
b) Sold to lenders
c) Revalued for next loan
d) Repossessed

8. Banks offer cars to customers for certain amount of down payment and then subsequent installments to be
paid for 5 years or so. this is referred to as:
a) Bank loan
b) Bank operating lease
c) Bank finance lease
d) Insurance

32 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 4: SOURCES OF BUSINESS FINANCE

9. Finance lease may allow borrowers keep the assets after the payment of all due installments and further,
paying a negotiated price of the asset.
a) True
b) False

10. Accounts payable can be a source of short term finance in the form of the credit that is availed from the
supplier on the supply of raw material.
a) True
b) False

11. Interest rates are typically a part of

a) Loans
b) Accounts receivables factoring
c) stocks
d) shares issuance

12. Long-term finances may come with certain conditions or regulations such as maintaining certain mix of capital
structure and level of current ratios. These conditions are referred to as:
a) Legal contracts
b) Caveats
c) Terms and conditions
d) Bindings

13. Convertible bonds can be converted to equity shares after a specified period, making them more appealing to
borrower.
a) True
b) False

14. Bonds Creates a commitment of cash payments – interest and principal – Fixed interest rate bonds are exposed
to inflationary risk.
a) True
b) False

15. Leasing is complex for recording on financial statements as

a) Finance lease is included as an asset on the income statement of the lessee.
b) Operating lease is treated as an off-balance sheet item.
c) Leases are recorded on separate financial statements
d) a and b

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CHAPTER 4: SOURCES OF BUSINESS FINANCE PRC 5: INTRODUCTION TO BUSINESS

16. Financial management is an art and science of managing firms’ finances. The art part deals with
a) People management
b) Revenue
c) Financial
d) Optimum resource utilization

17. Which of the following is/are features of an efficient capital structure?

i) A mix of long-term funding
ii) Availability of adequate funds for day-to-day expenses
iii) A suitable balance between equity and debt in the long-term
a) I only
b) I and III only
c) III only
d) I, II and III

18. Which of the following is the not the role of a financial manager?
a) To maximize the value of the business for its shareholders
b) To make decisions of product strategies
c) To arrange loans for investments
d) Provide funds for companies’ expansion

19. Revenues from sales of product or services should be the primary source of funding but funds from sales don’t
always come in when required.
a) TRUE
b) FALSE

20. Corporations are often required to raise external funding, or capital. Which of the following may NOT 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 handle legal disputes
d) To spend on competitive market campaigns.

21. Sources of equity finance can include the following EXCEPT:

a) Profit
b) Loans
c) Common stock
d) Preferred stock

34 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 4: SOURCES OF BUSINESS FINANCE

22. Safia is working as financial manager in GAINGroc super store. She keeps a track of:
a) Day to day operation cash flow data
b) Funding needs
c) Capital structures
d) All of the above

23. Common shares often do not have voting rights.

a) TRUE
b) FALSE

24. Which of the following is NOT a feature of preference shares?

a) Most preference shares are issued with a fixed rate of annual dividend.
b) Preference dividends are paid out of gross profit
c) Preference shareholders will be entitled to receive dividends out of profits before any remaining profit can
be distributed to equity shareholders.
d) If the company goes into liquidation, preference shareholders are paid before equity shareholders.

25. Preferred shareholders can vote in AGM to select, remove and reelect directors
a) True
b) False

26. Accounts Payable are amounts payable to vendors or suppliers for goods or services provided but have not yet
been paid. Generally this is an unsecured mode of financing.
a) True
b) False

27. Bushra is finance manager in PenBooks corporations. Her core activities includes
a) Risk management
b) Training and development
c) Production planning
d) None of the above

28. Mamona is sales representative in Haier. She is engaged in an argument with finance manager in a recent
meeting. The argument could be about:
a) The company’s Production policies as it will affect her ability to make sales
b) The company’s quality control policies as it will affect her ability to make sales
c) The company’s credit and collection policies as it will affect her ability to make sales
d) The company’s Marketing policies as it will affect her ability to make sales.

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CHAPTER 4: SOURCES OF BUSINESS FINANCE PRC 5: INTRODUCTION TO BUSINESS

29. An efficient capital structure is that provides:

a) Long term growth of company
b) Short term survival
c) Profit maximization
d) None of the above

30. Telco is purchasing telecom equipment from international suppliers. The company has agreed a credit
term of three months with the supplier. The goods have been received and Telco is now arranging with
local bank to make the payment to suppliers after three months. This characterizes:
a) This is form of long term loan
b) Accounts payable are quick source financing
c) Bank loans on receipts are of high interests
d) None of the above

31. Every retailer can obtain short term loans for purchasing inventory as it is available and returnable within
one year.
a) True
b) False

32. Committed line of credit is best source of finance for factory to finance working capital as it can be obtained at
any time during the year with choice of amount to withdraw and pay interest on the amount borrowed.
a) True
b) False

33. BOT computers sold 10000 computer on credit. The finance manager is in negotiation with the bank to receive
loan by surrendering the 10000 invoices to bank.
a) BOT will receive loan amount less than invoices
b) BOT will receive full loan but less than total invoices
c) BOT will pay interest on loan
d) BOT will receive all invoices back after return of loan

34. There are chances that in an operating lease arrangement might impose certain restrictions on the use of assets
such as.
a) It may not allow the lessor to make any modification in the asset.
b) It may not allow the lessee to use the asset in specific time of the day.
c) It may not allow the lessee to make use of asset.
d) It may not allow the lessee to make any modification in the asset.

36 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 4: SOURCES OF BUSINESS FINANCE

35. Long term bank loans obtained by corporations are always

a) Unsecured
b) Secured

36. Bonds are long term financing methods that always carry risk of
a) Market
b) Currency
c) Reputation
d) Inflations

37. Retained earnings dilute ownership of company

a) True
b) False

38. Dividend is payment of

a) Interests on loan
b) Bond premium
c) Profit to shareholders
d) None of the above

39. Loan borrowed by corporations are liability on

a) Directors
b) Shareholders
c) Managers
d) Corporations

40. Shareholders don’t have to worry about their shareholding being diluted in
a) Equity investment
b) Debt financing
c) Ordinary shares issuance
d) Long tern loans

41. If shares are issued to selected group of investors it is termed as

a) IPO
b) Placement of shares
c) Rights issuance
d) Restoration

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CHAPTER 4: SOURCES OF BUSINESS FINANCE PRC 5: INTRODUCTION TO BUSINESS

42. IPO is process through which general public can purchase

a) Assets of company
b) Shares of companies
c) Bonds
d) Securities

43. Companies gain tax advantages on payment of large dividends to shareholders

a) True
b) False

44. Investors always prefer

a) Ordinary share
b) Bonds
c) Preferred shares
d) Secured shares

45. Debt financing is cheaper source of finance as

a) Deductibility of all expenses from revenue
b) Deductibility of interest expenses for income tax
c) Deductibility of major liabilities
d) None of the above

46. Astute Corporation is a private limited company. The directors are searching from private investors to invest in
the company. This is because:
a) The company cannot issue preference shares
b) The company cannot issue bonds
c) The company cannot raise finance from the bank
d) The company cannot issue shares on stock market

47. Investors and other stakeholder will hold a positive opinion about the company if it has:
a) made good profit in a year
b) reduced its debt obligations
c) distributed dividends to the shareholders
d) All of the above

48. Companies have to honour the commitment to pay back funds raised through share issuance
a) True
b) False

38 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 4: SOURCES OF BUSINESS FINANCE

49. When a company retains its earning, it helps them to __________ in future.
a) Give more dividend
b) Obtain loans from banks
c) Pay debts
d) None of the above

50. Maturity date for repayment of principle amount is concern for

a) Debt financing
b) Equity financing
c) Share capital
d) retained earnings

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN 39

CHAPTER 4: SOURCES OF BUSINESS FINANCE PRC 5: INTRODUCTION TO BUSINESS

ANSWERS TO SELF TEST QUESTIONS

(a-iv)

(b-ii)
1 11 A 21 B 31 B 41 B
(c-ii)

(d-ii)

2 C 12 B 22 D 32 A 42 B

3 A 13 A 23 B 33 A 43 B

4 D 14 A 24 B 34 D 44 C

5 B 15 D 25 B 35 B 45 B

6 D 16 D 26 A 36 D 46 D

7 D 17 D 27 D 37 B 47 D

8 C 18 B 28 C 38 C 48 B

9 A 19 A 29 D 39 D 49 B

10 A 20 C 30 B 40 A 50 A

40 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

 CHAPTER 5

INFORMATION SYSTEMS

1. Saeed is working on the sales data to produce reports for analyzing last year’s production cost. He will input
data using
a) OCR
b) MICR
c) QR
d) Keyboard

2. Ms.Aleena is telling her friends about the limitations of certain input devices. She is telling them that this can
be inaccurate and affected by external interference. Which input device Ms.Aleena is talking about?
a) a. Barcodes
b) b. EPOS
c) c. Voice Data Entry
d) d. both a & b

3. Mina was working on her laptop. She typed the data on MS Word file and saved it. The battery of the laptop
died. The data is on:
a) Primary storage
b) Secondary storage
c) Hard disk
d) B and C

4. You bought a new WIFI device for home that needs software on your laptop to adjust the setting of the device.
The WIFI device is ___________ whereas the software in your laptop is ________________
a) IT; IS
b) IS; IT
c) ICT; IST
d) None of above

5. Information system include all hardware systems, software and procedures involved in the collection, storage,
production and distribution of information
a) True
b) False

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CHAPTER 5: INFORMATION SYSTEMS PRC 5: INTRODUCTION TO BUSINESS

6. Input device that reads data from text and convert it into editable document is called
a) MICR
b) OCR
c) Scanner
d) None of the above

7. Headsets are
a) Input device
b) Output device
c) OCR
d) All of the above

8. During an interview one candidate was asked to define system. He referred it to input/output/processing
/storage.
a) Answer is correct
b) Incorrect answer
c) Ans is input/output/processing /primary and secondary storage
d) Ans is input/output/CPU /primary and secondary storage

9. Mobile phones connected with services providers that provide access to users to send and receive text
messages. It is an example of:
a) Probabilistic system
b) Deterministic systems
c) Cybernetic system
d) None of the above

10. Teachers need to know about student progress in current semester. They should be provided with
a) Information
b) Data
c) Knowledge
d) Facts

11. Any business can create a ___________ by the effective use of Information Technology (IT). This may be achieved
through _____________ business processes (for instance; purchasing, selling, human resource), and obtaining
information for optimal decision-making, which result in substantial operational and cost benefits.
a) Competitive advantage, efficient
b) Profit, smart
c) Product, raw material
d) Efficient; competitive advantage

42 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 5: INFORMATION SYSTEMS

12. Fill in the blanks ……

The__________ is used in day-to-day decision-making to perform multiple tasks such as planning, acquiring,
searching, analysing, organizing, storing, programming, producing, distributing, marketing, or selling functions.
In order to know how to gather and use information from the many resources available to us, an understanding
____________ is critical.
a) Information, Information systems
b) Data, information
c) Databases, information
d) Information; data

13. Banking information system (IS) collects and processes data into information that is provided to Managers for
use in
a) Strategic planning
b) Decision making,
c) Performance monitoring, and production.
d) All of the above

14. Device which Facilitates the introduction of data and information into the system.
a) Scanner
b) Printer
c) Projector
d) LCD

15. _______________ is integrated with barcode readers and allows credit and debit cards to be read for instant payment
for goods.
a) Mouse
b) Keyboard
c) Cam
d) EPOS

16. File size is matter of concern for which type of input device
a) Keyboard
b) OCR
c) MICR
d) Digital Camera

17. EPOS normally works with which device to compete the provision of data/information tor relevant parties.
a) Camera
b) Microphone
c) Printer
d) All of the above

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CHAPTER 5: INFORMATION SYSTEMS PRC 5: INTRODUCTION TO BUSINESS

18. Minute areas on screen for quality of resolution on monitor is called as

a) Bar codes
b) Resolution
c) QR
d) Boxes

19. Another level of development in EPOS is that now the customer can even pay using:
a) Cash
b) Credit cards
c) Mobile phones
d) OCR

20. Storage devices which use Robotic mechanism to manage storage media are known as ___________ devices.
a) Cloud
b) Remote
c) Offline
d) Tertiary

21. Applications of computer and telecommunications equipment to store and retrieve data is categories as
a) Information Systems
b) Information control
c) Information Technology
d) Information Management

22. An organization that grows its own cotton, completes are textile related activities and produce uniforms for its
employees only. Such type of an organization is referred to as:
a) Open system organization
b) Closed System
c) Dependent system
d) Closed loop control system

23. Xphone maintains all records of calls made on its networks. This record is maintained on an electronic filing
system called as:
a) Networks
b) Database
c) DBMS
d) All of the above

44 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

PRC 5: INTRODUCTION TO BUSINESS CHAPTER 5: INFORMATION SYSTEMS

24. City police is monitoring all road activities through closed circuit camera networks, this is part of well planed
a) Information Systems
b) Information control
c) Information Technology
d) Information Management

25. Miles City real estate is using information to plan all construction projects for the new developmental project.
The company is managing this task by a team of experts in various locations and only employees can see the
information for the projects. They are making use of a(n)
a) Extranet
b) Internet
c) Intranet
d) Wide area networks

26. Banks use combination of customer account special coding systems written in:
a) MICR
b) OMR
c) OCR
d) QR

27. All functional managers of a company require quality internal and external information processed according to
units needs and its integration with other departments. for the information system that can help achieve this
task is referred to as:
a) TPS
b) DSS
c) ERP
d) All of the above

28. No information system in today’s dynamic era work without:

a) Network connectivity
b) Data Security
c) Cyber law
d) Employee training

29. The head office of a commercial bank receives online reports from all branches. The senior managers make use
of these reports for strategic decision making. The information from all branches is stored in:
a) Centralised database
b) LAN
c) DBMS
d) Outsourcing

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CHAPTER 5: INFORMATION SYSTEMS PRC 5: INTRODUCTION TO BUSINESS

30. Artificial intelligence systems have extensive knowledge of aviation safety. It prompts threats based on
environment dynamics and human behaviours. This is an example of:
a) Open system
b) Closed system
c) Integrated system
d) Self corrective system

31. 8th Generation aircraft have sensors attached to pilots. The system can sense vitals of the pilot in real time. If
pilot loses senses, the system can take control of the aircraft and land it safely on nearest airport. The aircrafts
have built-in:
a) Simulation system
b) Closed loop system
c) Open loop control system
d) Remote control system

32. Which of the following business environments are more suited to a closed system.
a) Stable
b) Dynamic
c) Unstable
d) Recursive

33. Data analyst at investment bank create various reports based on real time data from clients banks and stock
market trading data. This data is shared with the data analyst through:
a) Intranets
b) Extranets
c) Databases
d) DBMS

34. Food4Though is fast food chain with 20 outlets. The operations manager makes use of sophisticated
information system to determine the trends of product sales. He decides on whether to continue a product or
not based on the statistical reports he generates through:
a) LAN
b) Decentralised architecture processing
c) VPN
d) DSS

35. Banking ATMs use connectivity in such a way that various links are used to provide best link to customer to
accounts. This is done by:
a) Network servers
b) Client servers
c) Mail servers
d) File servers

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 5: INFORMATION SYSTEMS

36. University Computer based exams are conducted in house on special software. The students are given access to
secure network where they can attempt the exam and save it to be evaluated by the subject specialist. The
University is using __________ system to conduct the exams.
a) WAN
b) VPN
c) Intranet
d) LAN

37. Sales department of ShineTOE shoes updates all information using networks designed to give access to internal
authorised users only. This is an example of
a) Extranet
b) Internet
c) WAN
d) Intranet

38. Mining corporation of Pakistan want all miners sites to provide information with complete security using
public mobile networks. For this:
a) VPN is suitable
b) Decentralised networks can be used
c) Mobile apps can be helpful
d) LAN is effective

39. Information System Auditor in his findings reported that some employees are using fake IDs to spread political
agenda of a political party that may enhance company’s reputation risk. The conduct of employees falls in:
a) Cyber crime
b) Cyber fraud
c) Cyber crooking
d) Cyber misconduct

40. Creating formal written information security policies to set standards and provide the basis for enforcement is
the first step in a company’s security strategy.
a) True
b) False

41. Point of sale terminal in a grocery store that help operator scan the products, print receipts and do financial
transaction is an example of
a) Online TPS
b) Real time TPS
c) Batch TPS
d) Sequential TPS

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CHAPTER 5: INFORMATION SYSTEMS PRC 5: INTRODUCTION TO BUSINESS

42. Batch processing system are ineffective in banks due to

a) Large number of transactions
b) Security of data
c) Forms based data entry
d) Delays in transactions and data update

43. One customer may use several ATMs in single day and always get updated account information as it is
a) On central Database
b) Online system
c) Centralised computer system
d) All of the above

44. Risk in real time systems is breakdown of central system which can result in loss of transactions
a) True
b) False

45. Operations Manager at the Logistic company need daily reports on assignments, transport from various
locations and the amount charged for the services. The most suitable reporting system in case would be:
a) DSS
b) EIS
c) MSS
d) TPS

46. Manager at Human resource department is busy in analysing right man for right job with respect to skills,
knowledge, experience and past assignments success factors. The company can make use of ____________ to get
the desired information.
a) Company databases
b) Data analytics software
c) Database management systems
d) Data warehouses

47. Product life cycle of fizzy drinks was analysed and decision was taken after careful what-if analysis covering
market demand, customer care and competitors market share, most helpful in this regards are
a) MSS
b) DSS
c) OAS
d) EIS

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 5: INFORMATION SYSTEMS

48. CEO of an airline company uses dashboard of all operations and competitor airlines product and market share.
He must be using:
a) Databases
b) Spread sheets
c) EIS
d) Data warehouse

49. An ES is a computer program that simulates the judgement and behaviour of a human or an organization that
has expert knowledge and experience in a particular field
a) True
b) False

50. Most of integrated software suites in market are off-the-shelf solutions

a) True
b) False

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CHAPTER 5: INFORMATION SYSTEMS PRC 5: INTRODUCTION TO BUSINESS

ANSWERS TO SELF TEST QUESTIONS

1 D 11 A 21 A 31 C 41 B

2 C 12 A 22 D 32 A 42 D

3 D 13 D 23 B 33 B 43 D

4 A 14 A 24 A 34 D 44 B

5 A 15 D 25 C 35 A 45 C

6 B 16 D 26 A 36 B 46 B

7 B 17 C 27 C 37 D 47 B

8 A 18 B 28 A 38 A 48 C

9 B 19 C 29 A 39 D 49 A

10 A 20 D 30 A 40 A 50 B

50 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

 CHAPTER 6

BUSINESS ETHICS

1. A not-for-profit organization supplies free food to the deserving on daily basis. The organization expects
employees to work without any remuneration as they believe that it is the responsibility of the employees also
to contribute towards the social cause. It is:
a) Ethical and Fair to work free
b) considered unethical behaviour
c) normal for those who work as social workers volunteers
d) None of the above

2. One of employees of hospital provides services to family member of priority basis as he knows many doctors
and other staff. He is involved in:
a) Corruption
b) Misconduct
c) Dishonesty
d) Conflict of interest

3. Many current consumer protection laws were passed because it was reported that different businesses were
taking unfair advantage of the people who lack understanding of the complex contracts or were unable to
discern the nuances of the agreements. For instance, Moona leased a car and she was told that monthly
instalment would be PKR 40000. She received her first month payment reminder in which she was directed to
deposit PKR 48000 to bank. When she inquired, she was told that insurance fee was part of the plan and she
has already signed up for that. This is an example of:
a) Documentation and contract
b) Terms of short term loan
c) Taking unfair advantage
d) Cost of loan

4. Manager Finance of Pepsi Ltd gives special consideration to give loan to the employees of his department
without approval from the head office. There is no record maintained of such loans as he claims that all
employees return the loan on time. This is an example of:
a) Conformance to rules
b) Modification of rules
c) Ignorance of rules
d) Violation of rules

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CHAPTER 6: BUSINESS ETHICS PRC 5: INTRODUCTION TO BUSINESS

5. A doctor is charging a significant amount of money from a pharmaceutical company to recommend their
medicines to patients. The doctor is depicting:
a) Ethical behavior
b) Rule violation
c) Conflict of interest
d) None of the above

6. Providing the employees with adequate salaries and a good working environment is a part of company’s CSR.
a) TRUE
b) FALSE

7. Nestle operates its production plant in a distant location away from urban areas and housing societies. They
ensure to dispose all the waste safely without affecting any damage to the local ecosystem. This reflects
Nestle’s:
a) CSR
b) Rule conformance
c) Ethical behavior
d) All of the above

8. A very common practice has been observed at the workplace where employees are free to use office time on
their personal chores. This depicts:
a) Misuse of organizational time
b) Quality degradation
c) Resources wastage
d) Dishonesty

9. An organization arranges for training on codes of ethics for senior managers only as the CEO believes that codes
of ethics are only applicable to managers.
a) True
b) False

10. In business relations the key factor that can help sustain the relationship in future is:
a) Contractual terms
b) Norms of business
c) Professionalism
d) Honesty

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 6: BUSINESS ETHICS

11. Lack of ethical behavior can also cause tension among employees, with some employees resenting those who
do not play by ______________ and still manage to get ahead.
a) Values
b) Norms
c) Laws
d) Rules

12. The fundamental principle of integrity refers to be straightforward and honest in all professional and
a) Personal conduct
b) Business deals
c) Legal compliance
d) Norms and values

13. Selling are car without telling the customer about the accident that the previous car owner encountered in
which the car was seriously damaged is an example of:
a) Divulging information
b) Hiding information
c) Conflict of interest
d) Misuse of customer’s time

14. You are working as a procurement manager in a large organization. Recently the CEO has authorized you to
invite quotations for a quantity of raw material for a new launched product. Your brother deals in the same raw
material. You have asked your brother to submit a quotation with the price you told him. This is an example of:
a) Conflict of interest
b) Non-professional behaviour
c) Breach of confidentiality
d) None of the above

15. You travel to a client by bus and presented a forged bill of Uber for reimbursement. This is an example of:
a) Breach of contract
b) Unprofessional behavior
c) Misuse of resource
d) Taking something that does not belong to you

16. It is possible that something is legal but unethical.

a) True
b) False

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CHAPTER 6: BUSINESS ETHICS PRC 5: INTRODUCTION TO BUSINESS

17. A sales manager shared the projected sales figures with a friend who works for a rival firm. The manager has
shown:
a) Unprofessional behaviour
b) Lack of professional competence
c) Breach of confidentiality
d) Lack of integrity

18. Auditors reviewed some documents on request of clients, this is

a) a. Ethical
b) b. Normal audit procedures
c) Unprofessional approach
d) None of the above

19. Employees working extra hours with double hour rates is:
a) Legal
b) Correct
c) Ethical
d) All of the above

20. Factory operations are reported on media for spoiling the drinking water. This is due to factory’s
a) Weak plant controls
b) Lack of CSR
c) Material quality
d) Employees carelessness

21. Chipchap products are labelled as halal. This depicts:

a) Grading
b) Professional behaviour
c) Honesty
d) Branding

22. PSL ensure stadiums garbage is recycled. This shows:

a) Social responsibility
b) Environmental responsibility
c) Economic responsibility
d) Labour responsibility

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 6: BUSINESS ETHICS

23. ICAP maintains all office records on paper free e-filing system. This represents ICAP’s:
a) Eco-centric approach
b) Environment friendliness
c) effort to create social footprint
d) All of the above

24. In addition to the primary goal i.e., value maximization for shareholders, businesses are responsible not only to
the bottom-line, but to providing goods and services:
a) In an ethically responsible manner.
b) In a competitive manner
c) In a high quality with low price
d) In accordance to customer needs

25. A proper governance process must be put in place to achieve key goals and objectives of an organization through
ethical decision-making, and
a) Legal compliances
b) Corporate responsibility
c) Human rights
d) Market values

26. Ethics is defined as the “discipline dealing with what is good and bad and with moral duty and obligation”. It is a
set of moral standards for judging whether something is right or wrong. Except
a) Review of employee’s character is Ethical before hiring
b) View about employee’s religion is morally right
c) Processing order after full payment is correct
d) Giving orders to do jobs daily is correct

27. Showing respect for human rights concerns which of the following:
a) Right salary for work
b) Proper dress code for employees
c) Sick leave in time of need
d) Approval of all above

28. Manager hired one of the close relatives to do the job of factory quality control when there were more
competent candidates for the job. This is an example of:
a) Okay as it will help receive honest reports
b) It will provide insight in factory operation weekly
c) It will maintain discipline
d) It is a conflict of interest

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CHAPTER 6: BUSINESS ETHICS PRC 5: INTRODUCTION TO BUSINESS

29. Many stock exchanges in the world require the firms to have:
a) CSR
b) Financial statements issued to international media
c) Defined professional code of ethics
d) All of the above

30. Employees are celebrating birthday of manager before prayer break. This refers to:
a) Misuse of Organisation Time.
b) Happy quality time in office
c) Good for team bonding
d) Way of working in the offices

31. Bribery is immoral, unethical and illegal, it should be discouraged and the ones involved in it should be legally
accused as taking and giving bribe result in
a) Abuse of power
b) Obtaining undue favours
c) Creating discrimination
d) All of the above

32. An organisation should treat its employees fairly and with respect. The fair treatment of employees includes all
except
a) Office Equipment for Personal Use
b) Working Conditions
c) Education And Training
d) Salary And Compensation

33. Philanthropy is legal source of business entity reduction in its tax liability
a) True
b) False

34. Organisations with a good reputation find it easier to win and keep loyal customers, and also loyal employees.
There is a risk of losing customers to rival organisations.
a) When a business profit is declining
b) When a business is on loans
c) When a business reputation is damaged
d) When a business is facing tough competition

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 6: BUSINESS ETHICS

35. The Institute of Chartered Accountants of Pakistan (ICAP) is a member of the International Federation of
Accountants (IFAC). IFAC is a global organization of the accountancy profession comprising more than 175
member and associate organizations in 130 countries and jurisdictions, representing nearly 3 million
professional accountants.
a) All Audit firms must register with ICAP
b) All Qualified CA must follow ICAP guidelines
c) ICAP must review CA code of conduct
d) All of the above

36. Accountant must report the mismanagement in the organisation, that is resulting in criminal activity. This is
conformity of:
a) integrity
b) objectivity
c) professional competence and due care
d) confidentiality

37. If bribe was offered by client to a member of audit team to overlook the double accounting and record keeping.
a) Mirror test failed to prove its efficacy
b) Mirror test cannot be used after action is taken
c) Mirror test is for moral judgement
d) None of the above

38. The water pollution by one of the factories near a village is of moral and unethical consequences on human life.
This is where _________ will help.
a) Consequences test
b) Mirror test
c) Professional code of ethics
d) None of the above

39. A cement factory in local village providing clean drinking water to local community is part of
a) Social responsibility
b) Environment responsibility
c) Ethical business products
d) Management by objectives

40. After working for 15 years in bank, Mehnaz is now facing a situation where she is under pressure from family
member to get the loans written off. The Chartered accounts as last resort can leave job if judgement is in
crossroads of conflict of interest
a) Integrity
b) Confidentiality
c) Due care
d) Objectivity

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CHAPTER 6: BUSINESS ETHICS PRC 5: INTRODUCTION TO BUSINESS

41. All Qualified CA must attain minimum CPDs to uphold:

a) Professional competence and due care
b) Objectivity
c) Integrity
d) None of the above

42. Code of professional ethics can be challenged by individual not of same religion as of other chartered accountants.
a) True
b) False

43. Effective way to maintain professional approach is to remain

a) Unbiased
b) Honest
c) Objective
d) All of the above

44. If client is generous in giving gifts and financial benefits this is direct cause of damage to
a) Objectivity
b) Confidentiality
c) Professional due care
d) None of the above

45. Afia agreed to provide home tuition to the son of the director of the client organization after her assignment at
client has been completed. This is an example of __________.
a) Ethical behaviour
b) Unethical behaviour
c) Illegal action
d) Not part of qualified CA values

46. Labour practices in Pakistan are exploitative as labour class from remote areas with no CNIC cards are used on
constructions projects on low wages and threatened to be reported to authorities for not having CNIC. This is:
a) Unethical
b) Illegal
c) Discriminatory
d) All of the above

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 6: BUSINESS ETHICS

47. Insider trading is considered as

a) A conflict of interest
b) A conflict of business
c) A conflict of contract
d) A conflict of norms

48. Code of conduct is for

a) Employees
b) Employers
c) Both a and b
d) All stakeholders

49. Employees having good knowledge of code of conduct perform better in controlled environment, where rights
are protected
a) True
b) False

50. International clients prefer compliance on ethical code of conduct for

a) Brand creditability
b) Making profit
c) Gaining more business
d) None of the above

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CHAPTER 6: BUSINESS ETHICS PRC 5: INTRODUCTION TO BUSINESS

ANSWERS TO SELF TEST QUESTIONS

1 B 11 D 21 C 31 D 41 A

2 D 12 A 22 B 32 A 42 B

3 C 13 C 23 D 33 B 43 D

4 D 14 A 24 A 34 C 44 A

5 C 15 D 25 B 35 D 45 B

6 A 16 A 26 B 36 A 46 D

7 A 17 C 27 D 37 D 47 A

8 A 18 C 28 D 38 A 48 C

9 A 19 D 29 C 39 A 49 A

10 D 20 B 30 A 40 A 50 A

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 CHAPTER 7

MARKETING CONCEPTS

1. Road safety campaign by autoFast tyres makers is way to develop:

a) Trust with customers
b) Profit Maximization
c) Effective relationships with customers
d) A and C

2. EleHome products produces high quality home lightings., They market their products extensively to ensure
customers prefer their products while making purchasing decision. Their marketing should be based on
a) Customer manipulationQuality of products
b) Market monopolisation
c) Marketing pressures

3. School kids prefer school bags that have appealing design and vibrant colours. Thus, the bag manufacturers focus
more on design and features of their products. This refers to:
a) Value to customer
b) Market trends
c) Pricing strategy
d) Selling proposition

4. TeleMATE communications provide internet packages to metro bus travellers. Marketing is based on daily
affordable needs of city commuters. Even in the presence of many competitors, TeleMATE is becoming talk of the
town.
a) Marketing is selling service by targeting customer segments
b) Sales use special marketing techniques to fetch more business
c) Marketing achieve prime business objectives
d) Marketing is creating value to customers in competitive environment

5. HappyTravel tours provide various packages to northern areas travellers. Travellers can avail help from local
students who help them in exploring the place. The students who help tourists get volunteer certificates along
with school fee support. Travellers receive the information on this value added service through social media.
This is categorized as:
a) HappyTravel CSR
b) Marketing
c) Branding
d) Sales

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6. Gawadar bookfair helps students and general public to access quality books on various topics. Big discounts are
available on valuable titles to trigger the instant sales. This refers to:
a) Advertisement for publishers
b) Selling
c) Marketing
d) Distribution of books to areas far from publishers

7. GreenBANK use customer data to develop marketing strategies for various services they offer in the cities. This
data is helpful in
a) Satisfying the needs of the customers
b) Accomplishment of organisation goals
c) Generate value for the business
d) All of the above

8. Use of data in developing products to cater future needs is now a days embedded in
a) Marketing strategy
b) Data analytics for market research
c) Product development
d) All of the above

9. Books publishers use water marks of clouds in all papers. This helps in:
a) Marketing
b) Selling
c) Branding
d) Promotion

10. Fruit and vegetable section in shopping centre has displayed potatoes in different sizes - sweet and simple
categories. It is a part of:
a) Grading
b) Sizing
c) Cataloguing
d) Stocking

11. OLED TV technology is improving in colours, resolution and sleek smart designs. TV manufacturer are having
continuous innovations and development with input NOT from
a) Marketing Research
b) Customer feedback
c) Technological Market trends
d) Training and development

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PRC 5: INTRODUCTION TO BUSINESS CHAPTER 7: MARKETING CONCEPTS

12. Housing society in the town provide low cost high quality living. The project is developed by Live2Simle
company. The main focus of the company is on:
a) Housing products
b) Society services
c) Happy living idea
d) All of the above

13. Service is intangible in nature produced by companies to fulfil customer needs like education, transport, cleaning
and security.
a) True
b) False

14. Business incubation centres help new start-ups to established strong footings in the industry. BICs are providing:
a) Products
b) Service
c) Networks
d) Ideas

15. ReachAirline serve customers on domestic routes. The service is appreciated by the business community as it
helps them meet the conferences and meetings schedules on time and on place of their choices. The
AirBizMeetings (ABM) packages include:
a) Relevant for all local business needs
b) Communicated to all chambers and commerce across Pakistan.
c) Brand for business community
d) ABM is adaptable to every casual traveller
i) A and B are ABM package benefits
ii) A and C are ABM value
iii) A,B,C,D are characteristics of ABM

16. Bridal dresses are designed according to customer choices and interests. It is
a) Convenience Product
b) Speciality Products
c) Shopping products
d) Branded Products

17. Business centres are designed for various activities to support entrepreneurs gain business objectives of
networking, financing, marketing and HR. Business centres are:
a) Speciality services
b) Customise services
c) Business development services
d) None of the above

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CHAPTER 7: MARKETING CONCEPTS PRC 5: INTRODUCTION TO BUSINESS

18. Air conditioners designed for food item container carriers are term as manufactured parts
a) True
b) False

19. Banks give customers services to maintain accounts in local and foreign currency. This service is:
a) Intangible
b) Facility service
c) Not to be carried away
d) All of the above

20. Students save data files on cloud drives using internet. Cloud drives refer to:
a) Services
b) Digital products
c) Speciality products
d) Internet apps

21. Capital items are designed and manufactured according to customer needs for manufacturing
a) True
b) False

22. Which if the following is correct

a) The rationale of classifying goods into consumer goods and industrial goods is the convergence in buying
motives, approaches, and attitude in respect of these two sets of products
b) The rationale of classifying goods into consumer goods and industrial goods is the divergence in buying
motives, approaches, and attitude in respect of these two sets of products
c) The rationale of classifying goods into consumer goods and industrial goods is the strategies in buying
motives, approaches, and attitude in respect of these two sets of products.
d) The rationale of classifying goods into consumer goods and industrial goods is the alignment in buying
motives, approaches, and attitude in respect of these two sets of products.

23. In marketing Airline services

a) Customer needs are primary
b) Pricing is key to success
c) Market trends is key consideration
d) Sales of target product to target market is attained

24. Strong Brands help reduce:

a) Marketing costs
b) Sales efforts
c) Products prices
d) All of the above

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25. Customers loyalty is one aspect of Marketing segmentation strategy

a) True
b) False

26. Wheat is sold by various growers and wholesalers irrespective of specific needs and wants. This is referred to as
total market approach. An opposite approach is called:
a) Market segment approach
b) Market Penetration approach
c) Total Market approach
d) Niche Market approach

27. A new beauty product manufacturing company targets working women who have lesser time to get ready for
work. This is:
a) A market segment
b) A market group
c) A market section
d) A market area

28. Universities aim students who seek higher education are using ___________ segmentation.
a) Geographic
b) Demographic
c) Lifestyle
d) Behavioural

29. High price luxury items are in demand by customers who consider quality is associated with price. Price play
key role in buyers decision making.
a) True
b) False

30. Training play vital role in developing companies image due to value added customer services
a) Products tangible feature are main attributes for sales success
b) Price trigger the sales volumes
c) Place is behind market share gains
d) People help retain and gain trust of customers

31. Management of quickBurger chain are evaluating best marketing mix for the growth stage continuation, the
best mix for QB
a) Price, Promotion, place
b) People, price, Promotion, product
c) Product, price
d) Product, price, promotion, place

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CHAPTER 7: MARKETING CONCEPTS PRC 5: INTRODUCTION TO BUSINESS

32. In introduction phase the majority of cost is incurred in:

a) Promotion
b) Quality
c) Branding
d) Selling

33. Brands are differentiated on the basis of:

a) Logo
b) Trademark
c) Slogan
d) All of the above

34. Legal protection of product’s name, logo, and design is called:

a) Trademark
b) Patent
c) Copyright
d) All of the above

35. Established brands are considered vital options for future

a) Legal compliance
b) Ethical practices
c) Business survival
d) Investments

36. Cola BAR is a newly launched carbonated soft drink that had seriously suffered a setback in its early stage of
lifecycle in terms of declining sales and negative word of mouth from the customer. They used Lizard as a
brand character that created disgust amongst the consumers. Where did the company go wrong?
a) Poor selection of brand elements
b) Poor brand promotion
c) Selling in wrong segmentation
d) Using inappropriate marketing

37. Michael Jordan represents Nike in most of the brand promotions of the company’s products. This reflects:
a) Brand Personality
b) Brand characteristics
c) Brand power
d) Brand quality

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38. FISH2FISH is selling live fish from large freshwater tanks. Even the customers are allow to select the fish of
their choice. This refers to as:
a) Unique Selling Propositions (USP)
b) Customer care
c) Customer service
d) Product quality

39. Various pricing strategies are used to get maximum market share this is included in
a) Marketing
b) Selling
c) Branding
d) Distribution

40. Marketing technique needs market data for research and analysis to build long term relations with customers
a) True
b) False

41. A transaction between two parties where the buyer receives goods (tangible or intangible), services and/or
assets in exchange for money.
a) Marketing
b) Sales
c) Promotion
d) Place

42. _____________ refers to broader range of activities to sell product/services maintain client relationships,
determine future needs and has a strategy in place to meet those needs for the long term relationship.
a) Segmentation
b) Marketing
c) Selling
d) Branding

43. CityShore is real estate developer. They are organizing a family funfair to unleash their new project. This is
referred to as:
a) product push strategy
b) customer pull strategy
c) skimming strategy
d) selling strategy

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44. Few organisations don’t need any marketing as the best way to get more customers are through
a) Pricing
b) Word of mouth
c) Placement
d) People

45. Golf Mind &Soul is sports store for golf products only. All the products are sold at a price premium. The best
segmentation strategy would be:
a) Education demography
b) Professional demography
c) Geography
d) Social class demography

46. SuperSociety (SS) is a mega store selling all famous brands in the city. People prefer visiting SS as there is a kids
play area in the vicinity and a restaurant also. This refers to:
a) Price
b) Segmentations
c) USP
d) Value chain

47. Best way to maintain and grow in any industry is to use marketing
a) Mix
b) Cycle
c) Forces
d) modules

48. Which of the following is not part of marketing mix

a) Place
b) Procurement
c) Promotion
d) People

49. Products are produced with economies of scale to keep production cost low. This will help in keeping the
pricing low to enter the market or survive tough competition. This strategy is referred to as:
a) Penetration strategy
b) Skimming strategy
c) Manipulation
d) Differentiation

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50. Manager finance approved high budgeted marketing sponsorship of sports event as it will create
a) Profit
b) Customer base
c) Market reputation
d) Value addition for sales

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CHAPTER 7: MARKETING CONCEPTS PRC 5: INTRODUCTION TO BUSINESS

ANSWERS TO SELF TEST QUESTIONS

1 D 11 D 21 A 31 D 41 B

2 B 12 A 22 B 32 A 42 B

3 A 13 A 23 A 33 D 43 B

4 D 14 B 24 A 34 D 44 B

5 B 15 (iii) 25 A 35 D 45 D

6 B 16 B 26 A 36 A 46 C

7 D 17 C 27 A 37 A 47 A

8 B 18 A 28 B 38 A 48 B

9 C 19 D 29 A 39 B 49 A

10 A 20 A 30 D 40 A 50 D

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 CHAPTER 8

HUMAN RESOURCE STRATEGIES

1. The Scope Transport Ltd have not been able to retain employees for long time with satisfactions and high level
of motivation because of
a) Fair compensation
b) Lack of training opportunities
c) Poor supervisory practices
d) All of the above

2. Management team is unclear about the person specification for the new position of data analyst in the planning
division. They are unsure whether the person should have academic qualification in finance or business
management. This is due to lack of:
a) Job Analysis
b) Job Description
c) Job appraisal
d) Job specification

3. The main failure to attract most suitable candidate for a job is due to lack of:
a) Recruitment policy
b) Recruitment advisement
c) Recruitment process
d) Recruitment and training

4. Human resource plan is an integral part of

a) Tactical plan
b) Operational plan
c) Strategic plan
d) None of the above

5. Majority of Human resource managers make comprehensive strategies for Human resources (labour) inductions
and development as it is one of the four traditional factors of production. It refers to the economic contributions
of people working with their minds and body in terms of all of the following EXCEPT:
a) This is key factor to manage all other factors of production
b) Human resource is a key source of competitive advantage
c) This is factor of strategic synergy
d) The success of a business entity depends only on the skills and experience of its human resources

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6. Motorway police have one unit of paramedics who serve the commuters in time of emergency. Local hospitals
have signed a contract with highway authorities for such services as and when needed. This HR arrangement
comes under
a) Joint venture
b) Outsourcing
c) Sub offices
d) Consultants

7. Kashmir Crafts hire artisans for production of arts and crafts items for export markets, HR management functions
include:
a) Assess current head counts and their skills
b) Future estimations of skilled and other workforce
c) Replacement as and when needed.
d) All of the above

8. Team of government experts are in a meeting to write scope of internal auditors to be inducted for next 20
years projects. This is the process of:
a) Job Analysis
b) Job Descriptions
c) Appraisals
d) Training Assessment

9. A job description is casual explanation of a specific job that usually includes job title and tasks to be performed.
a) True
b) False

10. Safia and Murad were not called for the job interview for the position of Finance manager which required
qualified CA. Both were awaiting the result of their qualifying attempt. They could not fulfil:
a) Job specification
b) Job Analysis
c) Job Descriptions
d) Appraisals

11. Current employee with proven track record and having personality suited to environment will be hired through
a) Internal recruiting process
b) Same as external recruitment process
c) Recruitment agencies
d) None of the above

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12. External recruitment strategy is to avoid internal competition and politics.

a) True
b) False

13. ASAF group conducts initial interviews of the candidates to shortlist the most suitable candidates for a detailed
interview. In the initial interview the interviewer focus on:
a) Technical knowledge
b) Ethics and values
c) Background and salary expectations
d) All of the above

14. Team leadership is key to junior and senior managers. During interviews few candidates showed exceptional
leadership skills. They were given a situation to reflect their approach to handle a leadership dilemma. is the
situation can be called as:
a) Work place scenario
b) Mind game
c) Team management
d) Management Planning

15. Audit firms sent trainees to foreign assignments to get exposure of international standards of accounting and
auditing practices. This is a part of
a) Coaching
b) Mentoring
c) Training
d) Development

16. Managerial experience at workplace is considered vital for growth and promotions. It is part of
a) Development
b) Coaching
c) Mentoring
d) Training

17. Front Page media is national broadcasting news agency. Content writers and analysts are working in close
supervision of the supervisor to gain insights into news and views in various issues. This is referred to as:
a) Work place training is for technical or practical skills
b) Work place development helps the individual to gain experience and develop personal skills, such as
management and leadership.
c) Workplace mentoring
d) Work shadowing

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18. On-the-job training has the advantage of giving first hand __________ under actual working conditions.
a) knowledge and experience
b) knowledge and certification
c) motivation and experience
d) support and motivation

19. Nomaal is hired in customer services department of NET2NET internet company. She is assigned to Saima (a
senior customer care executive) to observe her way and means to carry out customer care. She is learning on
the job via
a) Apprenticeship
b) Coaching
c) Mentoring
d) Work shadowing

20. Coaching involves senior manager instructing how to accomplish various tasks on job.
a) True
b) False

21. Jamshaid is known for his support to all in office. He is always there to guide anyone, especially newcomers in
developing professional expertise and how to use social skills. He is acting as
a) Mentor
b) Supervisor
c) Trainer
d) None of the above

22. FarEAST Bank has organised a training program for all ranks at a training centre, specialist in data analytics.
This is an example of
a) Development program
b) Off-the-job training
c) Value added training
d) All of the above

23. Being a marketing manager, you have felt that your subordinates are overburdened with work. You have
conducted interviews with all subordinates to determine whether there is a need to hire additional personnel
in the department. This is an example of:
a) Recruitment
b) Selection
c) Job design
d) Job analysis

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24. Finance department usually put employees on various roles to learn all aspects of finance. Once they get back
to assigned tasks they are familiar with all work inflows and outflows of finance department. This is:
a) Job enrichment
b) Job consolidation
c) Job appraisal
d) Job rotation

25. In an office, Secondment means given second tasks for which have been trained for. This is as an appreciation
of performance.
a) True
b) False

26. Deputising for a manager in airport service means an individual may be given the opportunity to deputise for
his or her boss when the boss is absent from work for an extended period, on holiday or due to illness. The
individual gains experience by handling all airport services for a period of time.
a) True
b) False

27. A boss who wants to develop individuals will give the individuals additional responsibilities, and ___________ to
the individuals to make their own decisions.
a) Delegate Authority
b) Pass Orders
c) Support
d) Give Tasks

28. Internet security personnel are given more responsibility to block any effort to do illegal money transfers from
the company accounts. This is part of
a) Job enrichment
b) Job rotation
c) Empowerment
d) Management role

29. Job enrichment is not same as authority for a higher level of decision-making.
a) True
b) False

30. Suffa is given tasks of client account management along with her original position as a brand manager.
a) Client account task is job enlargement
b) Brand management is job enrichment
c) Brand management is job rotation
d) Only a and b

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31. Online Call centre is facing shortage of employees as they switch jobs or are fired by managers for being casual
at tasks. They are facing
a) High job rotation
b) High employee turn over
c) Bad hiring and training
d) None of the above

32. Unchallenging work tasks is one cause of employee turnover.

a) True
b) False

33. In times of high inflation, one major factor in employee’s decision to switch to other places for job is:
a) Management style
b) Carrier prospects
c) Compensation package
d) Lack of trainings

34. Work relationships that affect employee retention include supervisory management support and _____________. A
supervisor or manager builds positive relationships and aids retention by being fair and____________, allowing
work flexibility and work-family balancing, giving feedback that recognizes employee efforts and performance,
and supporting career planning and development.
a) Co-worker relations, non-discriminatory
b) Education, knowledge
c) Roles, responsibility
d) Authority, responsibility

35. SOFTLINKS is software house with a gym at office. This is a part of

a) Work life balance
b) Healthy work environment
c) Mental wellbeing
d) All of the above

36. The selection tests are designed according to organisations need of professional for various posts. The tests
usually focus on
a) Cognitive ability (ability to learn, adapt, and solve problems),
b) Motivation potential (attitude, behaviour performance, and productivity)
c) Knowledge and skills (math, verbal, data entry, software proficiency)
d) all of the above

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37. Training is for new inductions whereas development is for experienced staff and is meant for promotions.
a) True
b) False

38. Recruitment policy of government sector organisation is designed keeping in mind the person’s ability to serve
in various development sectors of the country. This is done to establish:
a) Job description
b) Job specifications
c) Job design
d) All of the above

39. Companies may ask candidates to submit medical tests (including drug test for certain jobs) to
a) Minimize medical insurance risks
b) Ensure that only healthy candidates are selected
c) Others can be kept safe
d) Get medical history for analysis

40. Human resource selection is based on ability to do all HR functions in line with operational plans
a) True
b) False

41. HR department of the organization is the key to all departments as they provide essential human support to
their units. There is a possibility that employees are less productive due to:
a) Poor job design
b) Low motivation
c) Lack of goal clarity
d) All of the above

42. Main conflict of HR department with Finance department can be on which of the following:
a) Cost cutting
b) Job designs
c) Job specifications
d) Job description

43. CEO of Sack Drinks require proactive HR needs assessment for next 10 years. This should all of the following
EXCEPT:
a) Retirements schedules
b) Redundancies
c) Rotations
d) Resignations

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44. Commitment and morale of employees is boosted by

a) Recruitment and compensation
b) Training and development
c) Job rotations
d) All of the above

45. The mode of training that helps employees learn the tasks of a job to be performed step by step through a
computer software is known as:
a) PPT
b) PGT
c) BOT
d) CBT

46. Employees of Ashore-Insurance are promised special payment on achievement of targets, this payment will be
in the form of
a) Shares
b) Salary
c) Insurance
d) Bonus

47. SEEClouds Airline is giving all its employees concession on travel tickets it is part of
a) Economic benefits
b) Insurance
c) Bonus
d) Long term benefits

48. Many good IT start-ups attract IT professionals by promising a share in the ownership of the business. This
refers to as:
a) Long-term incentives
b) Stock options
c) Stock grants
d) all of the above

49. Factory workers can get treatment in authorised hospitals through employee health card. This refers to:
a) Salary
b) Health Insurance Coverage
c) Special Bonus
d) None of The Above

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50. Employees after retirement get a financial package to receive a fair compensation. This is referred to as:
a) Professional fund
b) Provisional fund
c) Support fund
d) Provident fund

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ANSWERS TO SELF TEST QUESTIONS

1 D 11 A 21 A 31 B 41 D

2 D 12 A 22 B 32 A 42 A

3 A 13 C 23 D 33 C 43 C

4 C 14 A 24 D 34 A 44 D

5 D 15 C 25 B 35 D 45 D

6 B 16 A 26 A 36 D 46 D

7 D 17 D 27 A 37 B 47 A

8 A 18 A 28 A 38 D 48 B

9 B 19 D 29 B 39 A 49 B

10 A 20 A 30 A 40 B 50 D

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 CHAPTER 9

BUSINESS OPERATIONS OF A
MANUFACTURING ORGANISATION

1. MasterShoes manufacture various shoes for construction workers, key objectives are to produce and deliver
quality shoes with all safety standards, on the focus of manufacturing is on:
a) Financial Management
b) Enhanced Quality-Control Techniques
c) Efficient Supply-Chain Management
d) All Of the Above

2. Marketing personnel of detergent manufacturer help decide which types of detergents to make. Accounting and
human resources help them the challenge of combining people and resources to produce high-quality goods on
time and at reasonable cost.
a) True
b) False

3. Operations department of Xstar sports is involved in the development and design of cricket products and
determine what production processes will be most:
a) Effective
b) Superior design
c) Legal
d) Competitive

4. Anhal is working at GEN2 designs. She ensures that Gen2 competes effectively in dynamic fashion industry. In
this regard, she knows that Gen2 must convert resources (materials, labor, money, information) into high quality
products as efficiently as possible. Managing this conversion process is the role of
a) Quality control management.
b) Operations Management
c) Audit and finance management
d) Human resource management

5. Operation management link ideas to final products through transformation process in line with customer needs
and market demands. Which of the following statement(s) is (are) true in this regard?
a) The upper-level manager who directs this transformation process is operations manager.
b) Outsourcing the non-core competence is effective in operation management
c) Use of Total quality management to ensure quality and cost control
d) All of the above statements are true

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6. Production managers must adjust their production processes with the following objectives in mind EXCEPT:
a) Achieve best quality
b) Cost savings
c) Remove non value adding activities
d) Supplier negotiation

7. Operations Management of CellTELL mobiles must make four important decisions in production planning.
Which of the following is amongst those four decisions:
a) Type of products
b) Trainings
c) Customer negotiations
d) none of the above

8. A Flour mill shall use _____________ process for the production of flour.
a) Repetitive
b) Batch
c) Intermittent
d) Continuous

9. Which of the following tools can be used for production control.

a) Critical method
b) CPM
c) Decision tree
d) Critical mapping

10. A tailor stitching suits as per the needs of the individual customer is using _________ process.
a) Job shop
b) Continuous
c) Intermittent
d) Batch

11. Key techniques included in total quality management are

a) (TQM), and six sigma.
b) ISO 9000
c) ISO 14000
d) All of the above

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12. Which of the following is a type of production facility design arrangement?

a) V-shaped
b) W-shaped
c) Rotating
d) Fixed

13. In Production planning of electric motorbikes usually long-term planning is of

a) 4-8 years
b) 8-12 years
c) 6-12 years
d) 3-5 years

14. The Sigma e-bikes will be produced 200 units / month locally. This is a part of
a) Long term planning
b) Medium term planning
c) Short term planning
d) Adhoc planning

15. Planning which is concerned with the layout of factory or service facilities, where and how to obtain the resources
needed for production, and labor issues.
a) Long term planning
b) Medium term planning
c) Short term planning
d) Adhoc planning

16. First Food Ltd have grown vegetables in and around dining area of restaurant that customers can select for their
salad plate. This is part of medium planning.
a) True
b) False

17. The airline meals are cooked and delivered to airports using
a) Mass production
b) Mass Storage
c) Mass customization
d) Customization

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18. Army shoes for soldiers are designed and manufactured using
a) Mass production
b) Mass Storage
c) Mass customization
d) Customization

19. Chef Abdullah is famous for cooking several chicken recipes for individual customers’ orders. He makes several
dishes at a time keeping in mind the variation demanded by each customer this is called
a) Mass production
b) Mass Storage
c) Mass customization
d) Customization

20. Sugar cane processing plants receive sugar cane and convert it to sugar. This is process manufacturing.
a) True
b) False

21. JF 17 is produced in parts and ultimately integrated, tested and commissioned for flying. This is achieved via
a) Mass production
b) Assembly manufacturing
c) Mass customization
d) Customization

22. Power generation in the country is carried out using:

a) Continuous process
b) Intermittent process
c) Module process
d) Reverse process

23. One of the production units of Buzz Motors Ltd is producing cars for customers who have paid for special features
in the car. This is achievable via
a) Continuous process
b) Intermittent process
c) Module process
d) Reverse process

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24. Continuous process if for high volume, low variety and intermittent process is for high volume, high variety
a) True
b) False

25. PSL matches are managed in best way to keep the schedule intact and get the best out of sports event. The key
to achieving this is successful:
a) Operations management
b) Financial planning
c) Continuous process
d) Intermittent process

26. Pharma Safe Ltd is located in Manufacturing base/ zone as Govt provide special incentives to operate in these
zones including Labor access, tax incentives and material access with storage facilities.
a) True
b) False

27. Manager Usra wants a design of production process facility that would help best utilize is the facility, smart
allocation of tasks, and quick movement.
a) W shaped production layout
b) U shaped production layout
c) Line production layout
d) None of the above

28. TOYS4FUN production unit is designed in way to help different teams to fix various components to complete sets.
This is achieved in:
a) Product (or assembly-line) layout
b) Process layout
c) Duct layout
d) Fixed position layout

29. Submarine is being manufactured at Karachi Dockyard where various teams work around the submarine. This
refers to as:
a) Product (or assembly-line) layout
b) Process layout
c) Duct layout
d) Fixed position layout

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30. GB Women Academia Ltd are looking for a software developer company to develop their inhouse training
software. This is referred to as:
a) Make-Or-Buy
b) Outsourcing
c) Inventory Management.
d) IT apps Development

31. Supply-chain management of META Vision tours main area of concern are:
a) Procurement of food supplies
b) Logistics arrangements
c) Accommodations and security
d) All of the above

32. Tick all correct options

a) A certain safety stock is needed when inventories are reordered.
b) During negotiation with supplier only quality matters are considered
c) Use of Information system is only critical top operations management.
d) Labor trainings help reduce costs of operations

33. Sleek Style paints produces paints for electronic items. They make use of extensive technologies in their supply
chain process including:
a) Material requirement planning (MRP)
b) Manufacturing resource planning II (MRPII)
c) Enterprise resource planning (ERP)
d) All of the above

34. Air Clouds Ltd’s operations strategy is finalized by CEO and all its consequences are on his/her shoulders.
a) True
b) False

35. In case manager production is not sure what to do in a breakdown situation, it is better to consult with the
executive manager. The executive manager can look into the matter and see what can be done. Which statements
depicts a good executive management practice.
a) A wise production manager will seek input and feedback from his production line supervisors and
production employees regarding the effectiveness of the production strategy.
b) Take decision according to his experience
c) Consult other Line managers
d) None of the above

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36. A production line supervisor of food processing company may be responsible for multiple assembly lines like
pasteurizing, Separation and clarification, Standardization, Homogenization within a food production line. It is
essential for the production manager to relay the manufacturing strategy given to him to the
a) Production line supervisors that report to him.
b) Financial manger
c) Operations manager
d) Quality control manager

37. Entire management team of new city project was sent to training in various aspects of civil engineering projects.
Within the first 2 years of the project, many flaws were highlighted. This is because of:
a) Poor coordination
b) Lack of resources
c) Lack of constructions workers trainings
d) Failure in project control

38. An economist, who introduced the concept of division of labour in his famous book The Wealth of Nations in
1776 is:
a) Adam Smith
b) David Ricardo
c) Karl Marx
d) Milton Friedman

39. The concept of division of labour has contributed immensely to operations of a manufacturing company. Key
advantages of division of labour in a manufacturing concern are:
a) Increased efficiency
b) Improvement in quality
c) Utilisation of specialised skills and talents of workers
d) All of the above

40. Economies of scale refers to

a) Improving quality
b) Unit cost reductions with large scale production
c) Ensure compliance of ISO standards
d) Micro economic concept

41. Biggest advantage of using project based structures in software industry is

a) Innovations approach
b) Team coordination
c) Work breakdowns
d) Flexibility

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42. Parasuits Co. rely on its marketing department to do effective marketing in right market to help sales teams
lock contracts. They are using
a) Functional departmentalization
b) Process departmentalization
c) Product departmentalization
d) Geographic departmentalization

43. Biggest problem with Product departmentalization is when every product unit have to
a) Develop separate products
b) Liaison with suppliers
c) Ensure compliance
d) Duplicate similar departments for each product

44. Process departmentalization divides departments based on the project being done.
a) True
b) False

45. Flashcars develop cars with varied specifications. These specifications allow the cars to be used by a variety of
different users such as hospital ambulances, racers, and casual travellers.
a) Project based structure
b) Process departmentalisation
c) Product structure
d) Customer departmentalisation

46. All of the following are disadvantages of division of labour EXCEPT:

a) Boredom
b) Lack of creativity
c) Lack of responsibility
d) Innovation

47. Physical and mental limitations, for CEO require to distribute powers to other managers in spread out areas.
This is called
a) Power hubs
b) Span of control
c) Delegation
d) Departmentalisation

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48. Which of the following is not the tasks of The Research and Development (R&D)
a) Process improvement
b) Product improvement
c) Customer care
d) Cost savings

49. The primary responsibility of the Purchase department is to find and acquire the most ____________material at
the most ____________ price in alignment with the overall objectives of the company and the production
department.
a) Suitable, low
b) Quality, high
c) Good, suitable
d) Suitable, optimum

50. Manager human resource department in a factory is the key to handle:

a) labor unrest and strikes.
b) Tasks
c) Time management
d) Productivity

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ANSWERS TO SELF TEST QUESTIONS

1 D 11 A 21 B 31 D 41 C

2 A 12 D 22 A 32 A, D 42 A

3 A 13 D 23 B 33 D 43 D

4 B 14 A 24 B 34 A 44 B

5 D 15 B 25 A 35 A 45 D

6 D 16 B 26 A 36 A 46 D

7 E 17 C 27 B 37 D 47 C

8 D 18 A 28 A 38 A 48 C

9 B 19 C 29 D 39 D 49 D

10 A 20 A 30 B 40 B 50 A

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 CHAPTER 10

INDUSTRIES OF PAKISTAN

1. Government of Pakistan require all power distribution operator to comply rules and legislations, Regulatory
authority for this purpose is __________, which is an autonomous body mandated by the law to regulate the power
sector to ensure that the interests of investors and customers are protected, and a competitive environment is
maintained.
a) PEMRA
b) OGRA
c) NEPRA
d) APTMA

2. Mussaf is procurement manager at powCity power generator company for city. His prime tasks are to manage
a) Imports of fuel
b) Human resource management
c) Plant and equipment
d) a and c

3. There is one major representative of textile industry in Pakistan, who is responsible for securing vital interests
of investors and stakeholders is
a) OGRA
b) PEPRA
c) NEPRA
d) APTMA

4. Warping is a process of making a sheet of yarn threads in the form of warping beam. The yarn cones are installed
on creels in warping section which are warp in the form of sheet of latitudinal yarn threads.
a) True
b) False

5. Quality control department rejected few cloths items as they discovered rough surface area as it didn’t go
through proper burn off surface area process. The process is called:
a) Spooling
b) Spinning
c) Pressing
d) Singeing

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6. The process to improves whiteness of fabric by removing natural coloration and impurities from the fabric
through a washing process is called:
a) Spinning
b) Cleaning
c) Bleaching
d) Spooling

7. Finishing of fabric is achieved when following is done

a) Shrinkage
b) Raising
c) Calendaring and sanforising.
d) All of the above

8. ABOZ fabrics ensure high quality internal inspections before shipments to customers. Alezzay and her team.
Ensure which of the following:
a) AQLs
b) SQLs
c) QC
d) TQM

9. SANTO fabrics is providing all workers how to ensure compliance with health and safety.
a) Workers are trained in PPE (Personal Protective Equipment).
b) Training for comprehensive quality control is given to all workers.
c) Training on leadership and conflict management is provided.
d) Training on work place productivity is provided.

10. Textile entities in exports ensure compliance of international standards for customer satisfactions and legal
requirements on the basis of:
a) Fabric safety and health
b) HSE
c) ISO 14001 & Nordic Swan Ecolabel.
d) Textile Quality Controls

11. Which of the following payment is NOT made to DRAP.

a) Central Research Fund: Annual levy of 1% of Profit Before Tax
b) New Drug Registration Fees
c) Plant Registration Renewal Fees
d) Drug Manufacturing License Fees

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12. Hassan works in pharmaceutical company and plays an increasingly important role in communicating scientific
information to HCPs in an objective and ethical manner. He provides medical education on latest clinical
research, treatment guidelines, new medicines, their medical benefits to patients and any risks of side effect.
Hassan works for
a) A Medical Research Department
b) A Medical Affairs Department
c) A Medical Sale Team
d) A Medical Quality Control Team

13. Textile operations depend on raw material suppliers, ginning, spinning and weaving, along with distribution
networks. This is referred to as industry
a) Value chain
b) Production network
c) Supplies network
d) Manufacturing chain

14. Most of furniture industry obtain wood from tree cutters and plantations farmers. This is __________ part of the
value chain.
a) Upstream
b) downstream
c) Midstream
d) None of the above

15. Chinese entertainment channel has purchased a film production unit in UAE it is called
a) Upstream
b) downstream
c) Midstream
d) Vertical integration

16. Supply chain refers to the entire process of supply and selling commercial goods.
a) True
b) False

17. Hydal power is produced from turbines of water reservoirs / dams. This part of the value chain is referred to as:
a) Upstream
b) Generation
c) Production
d) All of the above

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18. Power from the generators need to travel long distance on power lines, therefore the power
a) Voltage is increased using step up transformers
b) Voltage at consumer side is stepped down using transformers
c) It is passed as it is generated
d) A and b

19. Power lines are designed to carry different voltages of power at the same time.
a) True
b) False

20. Transmission loss is term used when there is:

a) Power shortage
b) Power breakdown
c) Power fluctuation
d) Difference in power produced and power distributed / billed

21. Government of Pakistan issues guarantee to Independent Power Producers for

a) backing up the payment obligation of the power purchaser
b) the distribution of consumer connections
c) collections of bills
d) control of power tariff

22. Procurement and logistics manager make sure required items are timely available to unit at _____________. Its
inventory management segment ensures that stores and spares are kept in _______________ and are ready for use
when the need arises.
a) High price, new condition
b) Low price, running
c) Customer locality, stores
d) competitive price, pristine condition

23. Top Management instructed that maintenance should be done in low demand time, may be in winters. This will
be the prime duty of:
a) Installation and maintenance
b) Procurement and logistics
c) Finance
d) Operations and Control

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24. Entire organisations operating in power sector is required to follow high standard of health and safety. HSE
department provides the following for that.
a) Power Safety Code
b) Distribution Code
c) Power Safety Manual
d) All of the above

25. Information is processed and monitoring is carried out to ensure continuous supply of power to all consumers
and industrial sectors. Information systems used are
a) Online systems
b) Real-time systems
c) Decision support systems
d) Distributed systems

26. FiberBody textile used short term state bank finance for finance export assignments, this is SBP special low
mark-up scheme for textile sector known as:
a) ERF
b) LTFF
c) STF
d) OD

27. Primary factor of production for textile business is cotton

a) True
b) False

28. Ginning is process to:

a) Make fabric of high quality
b) Make high quality threads
c) Use infrared light o check defects
d) Separate of seeds from cotton

29. Raw material for ginners is

a) Local cotton
b) Phutti
c) Seed cotton
d) All of the above

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30. All Ginners in Pakistan are represented by one association who is responsible for dispute resolutions of
negotiations with textile mills owners and government. The body is called:
a) PCGA
b) PEMRA
c) OGRA
d) APTMA

31. Only cotton is required to go through spinning process. Polyester doesn’t require such processes.
a) True
b) False

32. Most of Spinners lost the contract due to poor quality of yarn they produced. This is mainly attributed to:
a) Lack of climate control
b) Lack of training
c) Lack of hi-tech machine
d) All of the above

33. A ‘spin plan’ is prepared for planning the yarn types to be produced as well as for
a) Backward planning of input requirement for each subsection of weaving process. Output is determined
backward from auto cone to mixing process keeping in view the waste percentage in each process.
b) Forward planning of input requirement for each subsection of spinning process. Input is determined
backward from auto cone to mixing process keeping in view the waste percentage in each process.
c) Horizontal planning of input requirement for each subsection of spinning process. Input is determined
backward from auto cone to mixing process keeping in view the waste percentage in each process.
d) Backward planning of input requirement for each subsection of spinning process. Input is determined
backward from auto cone to mixing process keeping in view the waste percentage in each process.

34. The capacity of spinning unit is denominated in ____________________ in ring section

a) Line of cones
b) Fibre in spindles
c) Cones size
d) Number of spindles

35. The weaving department staff is responsible of receiving yarn from spinning department and weave it into:
a) GREIGE
b) SPOOL
c) FABRIC
d) SREGIE

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36. Weaving process is main to textile as it ensures that

a) longitudinal threads i.e. threads along the length of fabric (weft) and lateral threads i.e. threads along the
width of fabric (warp) are interlaced to manufacture fabric.
b) longitudinal threads i.e. threads along the length of fabric (warp) and lateral threads i.e. threads along the
width of fabric (weft) are interlaced to manufacture fabric.
c) Horizontal threads i.e. threads along the length of fabric (warp) and lateral threads i.e. threads along the
width of fabric (weft) are interlaced to manufacture fabric.
d) longitudinal threads i.e. threads along the length of fabric (warp) and vertical threads i.e. threads along the
width of fabric (weft) are interlaced to manufacture fabric.

37. Pakistan best quality fabric is competitive in global market because of its
a) Yarn quality
b) Number of wrap per inch
c) Number of wefts per inch
d) All of the above

38. Making a sheet of yarn threads in the form of warping beam. The yarn cones are installed on creels in warping
section which are warp in the form of sheet of horizontal yarn threads.
a) This is direct / beam warping,
b) A type of sectional / pattern warping
c) Method of ball warping.
d) None of the above

39. One manager is specialist in determining the quality of fabric by using number of ends. This is done as
a) Sizing technique
b) Wraping method
c) Spooling
d) Weaving

40. Shuttle looms, air jet, shuttle less looms and power looms are used for
a) Spooling
b) Weaving
c) Spinning
d) Ginning

41. Silk fabric is made on special looms having

a) Felt heads
b) Multiple heads
c) Swayre looms
d) Jacquard heads

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42. ___________ process is used to remove the chemical that was applied on the yarn to withstand the friction of the
machine.
a) Desizing
b) Sizing
c) Bleaching
d) Dyeing

43. The chemical treatment to remove wax and other contamination is called:
a) Scouring
b) Washing
c) Dry cleaning
d) Sunlight drying

44. The level of brightness and whiteness is part of customer needs and done accordingly using
a) Bleaching
b) Singeing
c) Sanforizing
d) All of the above

45. Sanforizing is a mechanical finishing process of treating textile fabrics to prevent the normal dimensional
alternation of warp and weft.
a) True
b) False

46. Raising, Calendaring and Sanforizing all processes are used for ____________ the fabric.
a) Finalising
b) Folding
c) Colouring
d) Finishing

47. Internal quality team after careful inspection/audit gave AQL 4 to the fabric finalised this means
a) The product is of 4th grade
b) not more than 4% defective pieces of sample selected
c) 4 level weft
d) 4 level rejection

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48. Incoterms are various terms to transport the finished textile products to the buyer. These include:
a) FOB
b) CIF
c) A and B
d) Only A

49. Legal action is taken against textile mill as Health Safety and Environment (HSE) failure resulting in employee
injuries. The personnel at factory were not aware of
a) Labour rights
b) Quality procedures
c) Common laws
d) PPE (Personal Protective Equipment), fire fighting and responding in emergency conditions.

50. It is part of environment law for which compliance is required from all textile mill operators on treatment of.
a) PSM
b) KTF
c) UPP
d) RSL

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ANSWERS TO SELF TEST QUESTIONS

1 C 11 C 21 A 31 A 41 D

2 D 12 B 22 D 32 A 42 A

3 D 13 A 23 B 33 D 43 A

4 A 14 A 24 C 34 D 44 A

5 D 15 D 25 B 35 A 45 A

6 C 16 A 26 B 36 B 46 D

7 D 17 D 27 A 37 D 47 B

8 D 18 D 28 D 38 D 48 C

9 A 19 B 29 E 39 A 49 D

10 C 20 D 30 A 40 B 50 D

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