Commerce 4CM1 | Paper 2 Mock 01 | Written Paper 2

(a) Rwanda is the exporting country [1], because coffee beans are goods sold from Rwanda to another country [1]. [2]

(b) The pounds sterling are foreign exchange [1], because they are payment in another country’s currency [1]. [2]

(c) The exchange rate may change unfavourably [1]. Nyota could then receive fewer Rwandan francs when converting the pounds, reducing profit or increasing the local-currency cost of its purchases [1]. [2]

(a) The established retailer is requesting credit because it will pay 30 days after the invoice. [2]

(b) A letter of credit gives the strongest bank-backed protection for the overseas sale. [2]

(c) A bank transfer moves money directly between bank accounts. [2]

(d) A debit-card payment is most likely to give immediate authorisation for the local order. [2]

(e) Debit cards can provide immediate or rapid payment and reduce bad-debt risk. They are convenient for customers, avoid cash handling, and create a transaction record. Any two developed benefits. [3]

(f) Before allowing 30 days' credit, MetroOffice should check credit references, trading history or bank references; compare the \($18\,000\) order with the credit limit and current debt; check payment records; and consider cash-flow impact. Any three. [3]

(g) A letter of credit is suitable because a bank promises payment when conditions are met, reducing non-payment risk with an unfamiliar overseas buyer. Shipping documents confirm dispatch and support international trade. Any three. [3]

(h) A cheque may bounce, payment is delayed while it clears, it may be forged or stopped, and funds are not guaranteed. It also creates administration costs. Any three. [3]

(a) Splitting cabinet work into separate tasks for different workers is division of labour [2].

(b) Quality control should check that cabinet measurements match the hotel specification [1] and that varnish is even and undamaged [1]. Checking drawers or doors open correctly, or joints are secure, is also valid. These checks ensure cabinets meet the hotel’s required standard [1]. [3]

(c) With division of labour, workers repeat and develop skill in one task, so it can be done faster [2]. Several cabinets can be at different stages simultaneously, increasing output and helping the workshop complete the 120-cabinet order [2]. [4]

(d) Workers need training to perform their allocated task safely and correctly, reducing accidents and faulty cabinets [2]. Training also ensures they understand the required dimensions and finish, helping the business meet the hotel’s quality standards [2]. Trained workers can spot and report faults, reducing waste and loss of profit [1]. [5]

(a) An invoice is a document requesting payment for goods or services supplied; it states the amount owed. [2]

(b) Credit terms are an agreement allowing a buyer to pay after receiving goods, stating the payment period, such as 30 days. [2]

(c) BuildPro sends an invoice to record the materials supplied and amount due, giving the construction firm the information needed to make payment. [2]

(d) Thirty-day credit allows the firm to use the materials before paying and wait for income from its construction work. [2]

(e) Typical invoice items are the invoice number and date, description and quantity of goods, and total amount due with the due date. [3]

(f) A supplier can state a clear due date, send payment reminders, and offer an early-payment discount or charge interest on overdue sums. [3]

(g) A customer may dispute an invoice if the delivered quantity differs, goods are damaged or missing, or the price does not match the agreed price. [3]

(h) BuildPro should keep customer contact details, records of invoices issued and outstanding amounts, and payment dates and credit limits. [3]

(a) Compass batteries are suitable for the payment-desk area because they are small, low-cost items that customers may add while paying. [2]

(b) Directing customers past jackets and maps exposes them to a wider product range, increasing the opportunity for linked or additional sales. These products are relevant to an outdoor trip, so customers buying boots may remember that they also need a jacket or map. The route can also make better use of otherwise unused shop space. Any two explained reasons gain credit. [6]

(c) Suitable linked products include hiking socks, a waterproof jacket, a map, a water bottle, or a compass. Any two gain credit. [4]

(d) TrailPeak should provide a trained boot-fitting service. An employee can measure feet or check fit, give advice about boot type and intended use, and help the customer choose comfortable, suitable boots. This improves customer confidence and can lead to higher-value sales; it also reduces returns and complaints because customers are less likely to buy boots that do not fit. [8]