Fig. 2 shows documents used in a commercial transaction between Faria, a retailer and Kumal, a wholesaler. [Figure 2.0]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2014). The mark or mark type is shown in brackets.

1. [2] (a) Any two points × 1 mark each and up to 2 marks for a well-developed point – To obtain information about price/payment/delivery/terms (2 max) To compare with other quotations from other companies Because she sent them an enquiry To make a decision about what to buy. Any other relevant point.
2. [1] (b) (i) One mark for advice note
3. [3] (ii) Any three points × 1 mark each – Used to show a series of transactions Within a trading period (a month) For people buying using trade credit Each line shows one transaction – purchases made, payments made, discounts given, credit notes issued serves as a reminder to pay Enables the buyer to check her accounts Confirms the transactions made during the trading period Shows evidence of transactions Guard against fraud. Any other relevant point
4. [4] (c) Any four points × 1 mark each and up to 2 marks for a well-developed point – She is able to postpone payment so it may help her cash flow She may be able to sell the goods and use some of the money gained from the sale to pay for the goods She may be placing orders on a regular basis so it would mean an increased workload to make individual payments She will not pay interest in the credit period allowed but she would have had to pay interest on an overdraft Helps build up relationship between buyer and seller/allows return of goods Can benefit from discounts May lead to bulk buying Able to obtain more goods quickly without saving for them. Any other relevant point.
5. [6] (d) Level 2 (4-6 marks) Has discussed whether or not it is necessary to use documents in a commercial transaction and has given a reasoned opinion. Millions of commercial transactions take place between buyers and sellers each day. Many of them are cash transactions and there is no need to keep a large number of records of these purchases. Other transactions are more complex. The buyer may be purchasing on credit and make several transactions in a time period delaying payment until a future date. Buyers may place orders months before they require the goods to make sure of supplies. It is, therefore, necessary for both buyer and seller to keep records of each stage of the transaction so that nothing is forgotten. Many transactions involve several people and several processes, so written documentation helps to make sure that the transaction is completed successfully. Having documentation, either written or computerised, reduces the chances of mistakes, helps to sort out disagreements between buyer and seller and helps to prevent fraud. Documents relating to transactions are required for accounting purposes and for tax purposes e.g. reclaim of tax and also provide proof of purchase and proof of payment. Therefore for many commercial transactions, especially those involving credit, documents are necessary. Level 1 (1-3 marks) Has commented on the use of documents in a commercial transaction with/without an opinion. Documents are needed in a commercial transaction. They are used to order goods. They are used to give the prices of goods. They are used to give details of goods bought. They are used to show proof of purchase and proof of payment. They are important.
6. [4] (e) Any four points × 1 mark each and up to 2 marks for a well-developed point – She may be a small-scale retailer so could not afford to buy in bulk from manufacturers She may want to make use of cash and carry services She may want a variety of goods without going to several manufacturers The wholesaler may be local to her and offer her delivery services The wholesaler will break bulk and supply her with relatively small quantities May provide her with advice and information on new products The wholesaler may offer her good credit terms but manufacturer may not offer credit The wholesaler may save her storage space and supply when she needs the goods Stronger relationship with wholesaler Wholesaler takes risks of out-dated stock Provide after-sales service. Any other relevant point.