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HOW TO ANSWER MULTIPLE-CHOICE

QUESTIONS
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StudentAccountanthubpage

Answeringmultiplechoicequestions(MCQs)successfullyrequiresyoutodevelopa
rangeofskillsandexamtechniques.Takingafewsimplestepswillhelpyouto
maximiseyourmarksinthesepapers.

PREPARETOPASS
Aswithanyassessment,thegoldenruleforsuccessistopreparethoroughly.ItisnotunusualforACCA
examinerreportstonotethatsomecandidateswerenotadequatelypreparedfortheexam.Inmany
cases,candidatesattempttocompensateforinadequatepreparationbyquestionspotting,or
concentratingonasmallnumberofpettopics.Theseapproachestopreparationareextremelyriskyand
arealwaysstronglydiscouragedbyexaminersforgoodreason.
AseachMCQrelatestoaspecificissuewithinthesyllabus,eachexamwillincludebroadcoverageofthe
syllabus.Thismeansthattomaximiseyourchancesofsuccessyoumusthavestudiedthewhole
syllabus.
YoumaybeluckyenoughtofindthataparticularMCQisonatopicthatwaspartofyourmostrecent
studies,butthiswillnotbethecasewiththevastmajorityofthequestionsyouwillface.Aswellas
studyingtopicsrightacrossthesyllabus,itisimportanttoattemptpastexamsandexamstandard
questions.ExamplesofMCQsareavailableonACCAswebsitetogetherwithspecimenpapers.
Ofcourse,itisessentialthatyouuseallofthequestionscarefullyandfollowuponallofyouranswers.
Whetheraquestionwasansweredcorrectlyorincorrectlyduringexampreparation,itwillprovidean
opportunitytoenhanceyourunderstandingofthetopic.Byreflectingonwhyaspecificoptioniscorrect,
youcanimproveyourunderstanding,whilereflectingonwhytheotheroptionsarewrongcanhelpto
overcomemisunderstandingandeliminateconfusion.Whenattemptingquestionsaspartofyour
preparation,itisusefultorememberthatthekeypurposeoftheexerciseistoenhanceyour
understandingnotjusttogettherightanswer.
Whenreviewingeachoption,itisimportanttoensurethatyouunderstandexactlywhattheunderlying
pointisandtomakesurethatyoureflectonthistoenhanceyourlearning.

READTHEQUESTION
Theamountoftime,effort,anddiscussionthatisputintoeachquestionbeforeitappearsinanexamis
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likelytosurprisemostcandidates.Everyquestionissubjectedtoanumberofrigorousreviewsasit
progressesfromanideainthewritersmindtotheexampaper.Thesereviewsmeanthatyouneedto
readthequestionextremelycarefully,rememberingthatthewordinghasbeenchosendeliberately.This
isintendedtoensurethatthequestionisunambiguousanddoesnotmisleadcandidates.
Anexampleoftheneedtoreadthequestioncarefullymightbethewayinwhichaquestion
communicatescostinformation.Itisnotunusualforaquestiontorelatetoaproductionperiodof,say,
threemonths,butforfixedcoststobestatedasanannualfigure.Togetthecorrectanswer,candidates
musthaverecognisedthisfact.Thisisnotanattempttocatchoutcandidates,butratheranattemptto
ensurethatcandidatescanapplythetechniqueinareallifesituation,whereinformationmustbeclearly
understoodandisfrequentlycommunicatedinthisway.
Afurtheraspectistorecognisethattheanswerwillbebasedonthedataincludedinthequestion.There
aretwoaspectstothis.First,inordertoensurethatquestionsarenottoolong,thedatamayhavebeen
simplified.Tosomecandidates,thismayseemtobeunrealisticwhencomparedtoareallifesituation.A
particularexampleofthisisthewayinwhichthelabourcostisdescribedinmanyquestions.Moreoften
thannot,directlabourisdescribedasavariablecost,withnoreferencetothecostoflayingoffstaff.For
acandidatewhohasexperienceofstaffrationalisation,thisassumptionwillbetotallyunrealistic.Whilea
longerquestionmayprovidetheopportunitytocriticallyexaminetheunderlyingassumptions,thisisnot
possibleinanMCQandthequestionshouldbeansweredonthebasisofthedataprovided.Second,only
thedataincludedinaquestionisrequiredtoobtaintheanswer.Thatmeansyoushouldnotwastetime
wonderingaboutadditionaldata,orinferringadditionaldataintothequestion.
Anexampleofthiscouldbeaquestionthatteststheabilitytocalculatetheclosingbalanceonaledger
account.Thequestionmaygivedetailsoftransactionsduringaperiodandaclosingprepayment,but
theremaybenoreferencetoanopeningprepayment.Insuchcases,youcanassumethatthiswasnil.
Asalreadynoted,thewriterwillhavesoughttokeepthequestionasshortaspossiblebyomitting
unnecessarywordssuchastheopeningprepaymentwasnilortherewasnoopeningprepayment.
Itisimperativethattheprompt(theactualquestionthatistobeanswered)isreadcarefully.Forexample,
aquestionmaygiveinformationonreceivables,irrecoverabledebts,andrequiredallowancesfor
receivables.Here,thepromptcouldrequireanyofthefollowingtobecalculated:
themovementontheallowance
theclosingreceivablesallowance
thechargetotheincomestatement,or
thenetvalueofreceivablestobereportedonthestatementoffinancialposition.

Ratherthanactuallyreadingandnotingtheprompt,somecandidatesassumethattheyknowwhatitis.
Thisisusuallyonthebasisofaquestiontheyhaveseenpreviously.Moreoftenthannot,thisapproach
leadstothewrongoptionbeingselected.

THINK
ItisacommonfallacythatMCQsareeasy.Thisisbasedonthefactthatoneoftheoptionsisthecorrect
answer.Therefore,theargumentgoes,allyouhavetodoismakethecorrectselection.Whileitisfairto
saythatsomequestionsmaybeeasy,thatisusuallybecauseyouhavepreparedthoroughly.Hopefully,
thiswillhappeninsomequestions,butitismorelikelythattheanswerwillnotbeobvious.Aquestion
fromthespecimenpapersforPaperF1/FAB,AccountantinBusinessillustratesthis:
SAMPLEQUESTION1
ABCCohasasystemthatrecordsdetailsofordersreceivedandgoodsdispatched,invoicescustomers
andallocatesremittancestocustomers.
Whattypeofsystemisthis?
AManagementinformationsystem
BDecisionsupportsystem
CKnowledgemanagementsystem
DTransactionprocessingsystem
Evenacasualreadingofthequestionwillhighlightthatthewordsystemisakeyword.Itisusedinthe
stem(theinitialstatementthatdescribesthesystem),theprompt(theactualquestion)andineachofthe
choices.
Thismeansthatunlesscareis
takentoreadthequestionandthinkcarefullyaboutwhatisbeingasked,it
wouldbeeasytobecomeconfused.Afurtherproblemisthatallfourofthesystemsinthechoicesare
examplesofsystemsthatmightbeutilisedin
anorganisation.
Toselectthecorrectanswer,thebestapproachistoconsiderwhateachofthefoursystemsisintended
toachieve.
Amanagementinformationsystemisintendedtoprovideinformationtomanagers.Informationis
processeddata,whichisusefulformakingdecisions.Inthiscase,thestemreferstodata(asitis
unprocessedinformationwouldnotbeanindividualorder,butthetotalvalueofordersforaparticular
productorfromaspecificcustomer).Therefore,Aisnotcorrect.
Adecisionsupportsystemisintendedtodoexactlywhatthenamesuggestsprovideinformationto
assistmanagerstomakedecisions.Onceagain,thesystemrelatestoinformation.Aswehavealready
decidedthatthestemreferstodata,Bcannotbethecorrectanswer.
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ChoiceCpresentsapotentialproblem.Aknowledgemanagementsystemisintendedtocreate,capture,
storeandshareinformation.Thestemnotesthatthesystemrecordsdetailsoforders(capture)and
invoicescustomers(creates).Thismaycreateconfusionfortheillpreparedcandidate.However,awell
preparedcandidatewillnotethat,onceagain,theissueisthatinformationisrelevanttoaknowledge
managementsystem.Onthatbasis,choiceCisincorrect.
Disthecorrectchoicebecauseatransactionprocessingsystemdealswithdatawhichisprocessedto
createinformation.
From,thiswecanseethatacandidatewhoisclearaboutthedifferencebetweendataandinformation
willbeabletoanswerthisquestionwithoutunduedifficulty,butveryclearthinking,andapplicationof
knowledge,isneeded.
Itisessentialthat,havingreadthequestioncarefully,youthinkaboutyourresponse,andthatyour
answeristheresultofaconsideredchoice.Thisisbecauseofthewayinwhichtheincorrectoptionshave
beenconstructed.InACCAexams,MCQshaveonecorrectoptionandthreeincorrectoptions.The
incorrectoptionsarereferredtoasdistractors.Thistermisusedbecause,inwritingthequestion,the
examinerattemptstoidentifythemostcommonmistakesmadebycandidatesandusestheseasabasis
fortheincorrectoptions.ThiscanbeillustratedbyaquestiontakenfromthespecimenpaperforPaper
F2/FMA,ManagementAccounting.
SAMPLEQUESTION2
Informationrelatingtotwoprocesses(FandG)wasasfollows:
Process

Normallossas
%ofinput

Input
(litres)

Output
(litres)

65,000

58,900

37,500

35,700

Foreachprocess,wasthereanabnormallossoranabnormalgain?

ProcessF

ProcessG

Abnormalgain

Abnormalgain

Abnormalgain

Abnormalloss

Abnormalloss

Abnormalgain

Abnormalloss

Abnormalloss

Solution
Eachprocessmustbeconsideredseparately.
ProcessF
Normallossis8%,thusexpectedoutputis92%ofinput.
Inputwas65,000litres.
Thus,expectedoutputwas59,800litres.
Actualoutputwas58,900litres.
Asactualoutputwaslessthanexpected,therewasanabnormalloss.
ThatmeansthatchoicesAandBareincorrect.However,acommonmistakebycandidatesistoassume
thattheperformanceinbothprocessesisthesame.Makingthismistakeleadstotheselectionofchoice
D.
ProcessG
Normallossis5%,thusexpectedoutputis95%ofinput.
Inputwas37,500litres.
Thus,expectedoutputwas35,625litres.
Actualoutputwas35,700litres.
Asactualoutputwasmorethanexpected,therewasanabnormalgain.
Thus,thecorrectchoiceisC.
Anothercommonmistakeinquestionssuchasthisistomixupthevaluesforexpectedoutputandactual
output.Welllaidoutworkingsandalogicalapproachcanhelptoovercomethisproblem.
Workoutyouranswer
Astheincorrectanswersarebasedoncommonmistakes,itfollowsthatattemptingtoguessthecorrect
answerisnotlikelytobeproductive.Rather,itisessentialthatyouuseyourunderstandingofthetopicto
workoutyouranswer.Thiswillpreventyoufrombeingdistractedbyincorrectoptions.
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SAMPLEQUESTION3(takenfromthespecimenpaperforPaperFA2)
At30November,Charlesisowedatotalof$72,660byhiscustomers.Hisreceivablesallowancebrought
forwardfromthepreviousyearendis$11,700.Heestimatesthathisreceivablesallowanceshouldbe
equivalentto15%oftheamountsduefromcustomers.
Whatvalueshouldbeincludedintheincomestatementforreceivablesexpensefortheyearto30
November?
A$801debit
B$10,899debit
C$801credit
D$10,899credit
Solution
Thereceivablesallowanceshouldbeequivalentto15%oftheamountsduefromcustomers($72,660x
15%=$10,899).
Ifacandidatecompletesthiscalculationandthenreviewsthechoices,thereisadangerthat,because
$10,899isincludedintwoofthechoices,oneorotherofthosechoiceswillbeselected.
Thisignoresthefactthattheamounttobeincludedintheincomestatementisthemovementinthe
allowancewhichhasfallenfrom$11,700to$10,899,or$801.Areductionintheallowancewillbea
creditintheincomestatementthus,theanswerisC.
Thisillustratesthat,forquestionsthatrequirecalculations,coveringuptheoptionswhileyouworkout
youranswercanbeaproductivestrategy.Ofcourse,withquestionsthatdonotrequirecalculations,the
possibleanswersneedtobeconsideredinturn.However,thisstillrequiresyouranswertobeworkedout,
notrandomlyselected.Thesequestionsmightrequireadecisiononwhichoneoftwoormorestatements
arecorrect,orwhichoneofanumberofstatementsiscorrect.Insuchcases,thebestapproachisto
considereachstatementinturn,anddecidewhetherornotitiscorrect.Onceagain,thefactthatincorrect
optionsaredistractorsmustbeborneinmind.

ELIMINATEINCORRECTANSWERS
Thisapproachislikelytobemosteffectiveindiscursivequestionsthatrequirethecorrectcombinationof
statementstobeselected.Consideraquestionthatoffersthreestatements,andrequiresthecorrect
combinationofcorrectstatementstobeselected.Theidealwaytoanswerthisistoconsidereach
statementinturn,anddecideifitiscorrectornot.Often,candidateswillfindthattheycanquicklyidentify
oneincorrectstatement.Onthatbasis,itispossibletoeliminatetheoptionsthatincludethatstatement.
AquestionfromthePaperF2,ManagementAccountingspecimenpaperillustratesthispoint.
SAMPLEQUESTION4
WhichTWOofthefollowingstatementsrelatingtorelevantcostconceptsindecisionmakingarecorrect?
1. Materialscanneverhaveanopportunitycostwhereaslabourcan
2. Theannualdepreciationchargeisnotarelevantcost
3. Fixedcostswouldhavearelevantcostelementifadecisioncausesachangeintheirtotalexpenditure
4. Materialsalreadyheldininventorynevercontributetorelevantcost

A1and3
B1and4
C2and3
D3and4
Solution
Inthiscase,alittlethoughtwillconfirmthatstatement1isincorrect.Thoroughpreparationwillmeanthat
youknowthatmaterialscanoftenhaveanopportunitycost.Oncethisdecisionhasbeenmade,choicesA
andBcanbeeliminated,leavingeitherCorDasthecorrectchoice.Asstatement3isincludedinbothof
thesechoices,itdoesnotneedtobeconsidered.Thequestionnowrequiresadecisiononwhether
choice2orchoice4iscorrect.
Bothoftheserelatetoissuesinwhichmanycandidatesexperiencedifficulty.Howaparticularcandidate
willprogressfromthispointwilldependontheknowledgetheyhavebroughtintotheexam,asthiswillbe
thebasisoftheirdecisionregardingstatements3and4.
Letsconsiderstatement3first.Thekeyissueisthatacostisrelevantifthedecisionleadstoafuture
incrementalcashflow.Statement3effectivelysaysthisinthephraseachangeintheirtotalexpenditure.
AcandidatewhorecognisesthiswillthusselectchoiceCiftheyareconfidentabouttheirunderstanding
ofstatement3.Ifthereisanydoubt,ortoprovidereassurance,statement4canthenbeconsidered.
Inthiscase,wellpreparedcandidateswillrecognisethatifmaterialsalreadyheldininventorycanbesold,
usingthemwillhavearelevantcostthebenefitforegonebyusingthemratherthansellingthem.Thus,
statement4isincorrectandchoice3isthecorrectanswer.

OTHERPOINTS
Therearesomeotherpointsonwhichyouneedtomakedecisionsinordertomaximiseyourmarks.For
eachofthese,theexamroomisthewrongplacetomakethedecision.Itisessentialthatyouhave
preparedthoroughlyandhavedecidedonyourownapproachtoeachofthefollowing:
Aboveallelse,rememberthatyoushouldnotallowyourselftobecomesostuckonaquestionthatyourunoutoftime.

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Generallyspeaking,examsaredraftedsothatthetimespentoneachpartofaquestionisinproportiontothemarks
allocated.WithMCQs,however,itmaybethatsomecandidateswillfindsomequestionsaremorestraightforwardthan
others,andcanthereforebeansweredmorequickly.Forthatreason,itmaybebettertoconsiderthetimeallocation
foragroupof,say,fiveMCQs,ratherthanforeachquestionindividually.
IfthereisnopenaltyforanincorrectanswerinACCAexams,thereisnothingtobegainedbyleavinganMCQ
unanswered.Ifyouarestuckonaquestion,asalastresort,itisworthselectingtheoptionyouconsidermostlikelyto
becorrect,andmovingon.Makeanoteofthequestion,soifyouhavetimeafteryouhaveansweredtherestofthe
questions,youcanrevisitit.
Ifyouaresittingapaperbasedexam,youmustremembertorecordyouranswerstoMCQsonyourCandidate
RegistrationSheet(CRS),asthisistheonlywayyoucanobtainthemarksyoudeserveforallyourefforts.Workings
forMCQsarenotmarked,norareanswerswritteninscriptbookletsasopposedtoontheCRS.

CONCLUSION
Fromthisdiscussion,youcanseethatMCQsarenotaneasyoption.Maximisingyourmarkswhen
attemptingMCQsrequires:
soundpreparation
studyingacrossthesyllabus
practisingasmanydifferenttypesofquestionaspossible
developingyourownstrategyfordifferenttypesofquestion
thinkingclearlyintheexam
workingoutyouranswers
structuringyourapproachtothepaper
answeringallthequestions.

TakingthisapproachdoesnotmakeansweringMCQseasy,butitshouldmeanthatyouobtainthemarks
youdeserve.

Lastupdated:7Jul2015

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