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NEW QUESTION 39
Which of the following might be the consequences of under-specification? Select TWO that apply:
- A. Poor competition between suppliers
- B. Higher cost due to inessential features
- C. Additional cost to rework
- D. Few suppliers can supply the full range of features
- E. Unfit products or services
Answer: C,E
Explanation:
Main risks involved in an under-specified requirement
* The product or service is not fit for use since it does not match the actual needs
* Higher cost due to corrections or reworks (proposal evaluations, scope or work monitoring, change in insulation materials or systems, reduced productivity, etc.).
* Higher operating cost on many fronts: process control, energy consumption, maintenance, etc.
* Other problems like corrosion under insulation, mold development, safety-related concerns, etc.
LO 3, AC 3.3
NEW QUESTION 40
A company buys components from its supplier. However, the supplier has not sent the invoice to the buyer and the buyer will not pay until next month. How will that amount of money be shown in the financial statements of the buying organization?
- A. Accrued expense
- B. Accounts payable
- C. Tax liabilities
- D. Accrued interest
Answer: A
Explanation:
The buyer won't pay the supplier until next month. This is a liability to the buyer. This amount can be recorded as accrued expense or accounts payable. On the other hand, the supplier has not sent the invoice, so it should be accrued expense.
Both accounts payables and accrued expenses are liabilities. Accounts payable is the total amount of short-term obligations or debt a company has to pay to its creditors for goods or services bought on credit. With accounts payables, the vendor's or supplier's invoices have been received and recorded.
On the other hand, accrued expenses are the total liability that is payable for goods and services that have been consumed by the company or received. However, accrued expenses are those bills in which an invoice or bill has not yet been received. As a result, accrued expenses can sometimes be an estimated amount of what's owed, which is adjusted later to the exact amount, once the invoice has been received.
Conversely, accounts payable should represent the exact amount of the total owed from all of the invoices received.
Reference:
- CIPS study guide page 55-56
- Understanding Accrued Expenses vs. Accounts Payable (investopedia.com) LO 1, AC 1.4
NEW QUESTION 41
Which of the following are typical social considerations throughout the contract life cycle? Select the TWO that apply.
- A. Support small local businesses
- B. Using recycled materials
- C. Managing waste
- D. Health and safety
- E. Minimizing use of non-renewable resources
Answer: A,D
Explanation:
The following are typical social criteria in procurement:
* Reducing unemployment
* Preventing the use of child labour
* Preventing discrimination on the grounds of race, religion, disability, sex or sexual orientation
* Encouraging good employment practice
* Reducing local unemployment
* Reducing social exclusion
* Promoting training opportunities for the young or disadvantaged
* Encouraging access to work for people with disabilities
Reference:
LO 3, AC 3.2
NEW QUESTION 42
Which of the following agencies can produce a technical standard?
- A. Department of State
- B. Marketing department
- C. House of Lords
- D. BSI
Answer: D
Explanation:
Technical standards are often produced by a national or international body such as British Standard Institute (BSI) LO 3, AC 3.1
NEW QUESTION 43
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