Veenu owns a small printing business. She employs two workers who operate the printing machines. The business prints commercial documents such as invoices, advice notes and delivery notes.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] (a) (i) 1 mark for each item stated to a maximum of two items
2. • Name/address of purchaser/seller
3. • Order number
4. • Date
5. • Cat.no/code no
6. • Quantity of goods
7. • Description of goods
8. • Price
9. • Cost of goods
10. • Total amount of cost of goods
11. • Discount/terms
12. • E & OE
13. Accept any other relevant points
14. [2] (ii) 1 mark for the advice note and 1 mark for the delivery note
15. • The advice note advises that the order is about to be despatched (1)
16. • The delivery note acts as proof of delivery of goods/acts as a receipt that the goods have been received by the buyer (1)
17. [2] (b) (i) Valid points include (Any 2 × 1 marks)
18. • Employers Liability Insurance protects the business against claims made by employees (1) as a result of an accident or injury (1) where compensation will be given (1) to the worker/employee while working for the business (1), e.g. if an employer is found to be negligent with having unguarded machinery (1) and in many countries it is compulsory by law to have this insurance (1)
19. Accept any other relevant points.
20. [4] (ii) Up to 4 marks for explaining why business failure cannot be insured against (Any 4 x 1 marks)
21. • Business failure is a non-insurable risk (1) which means that the risk cannot be assessed/predicted/mathematically calculated (1) as there are no past records/statistics (1) to fix the premium (1)
22. • There is also a chance that deliberate bad/failed management will take place (1) in order to make a claim (1) and profit from indemnity (1) which is against the principle of indemnity (1)
23. Accept any other relevant points.
24. [2] (c) (i) Up to 2 marks for an explanation of cash discount
25. • Cash discount is a deduction from the invoice price of goods/reduced amount (1) given to a customer who pays for the goods promptly (1) so as to encourage them to pay within a given/short period of time (1), e.g. week/month (1) usually low/2–5% (1)
26. Accept any other relevant points.
27. [2] (ii) 1 mark for each advantage stated up to a maximum of two advantages
28. • Veenu does not have to wait for payment/improves her cash flow
29. • Administrative costs are reduced/a credit account does not have to be set up
30. • Avoids bad debts
31. • The money may help Veenu take advantage of discounts offered by her suppliers
32. • May encourage repeat business/buy on a regular basis
33. • Increases sales/turnover
34. [6] (d) Level 2 (4-6 marks) Has discussed whether or not rapid and accurate communication is important to business success and has given a reasoned opinion
35. Level 1 (1-3 marks) Has commented on rapid and accurate communication with/without an opinion
36. • The external communication will be mainly to customers and suppliers.
37. • The main methods will be telephone, fax, e-mail and written depending on the urgency of the communication.
38. • Internal communication with her two employees will mainly be face-to-face, although some written communication will be needed when a record is required such as with a contract of employment.
39. • When receiving orders for printed documents, it is important that the customer's requirements are known accurately, therefore written, fax or email attachments are required.
40. • Many orders may be needed urgently therefore rapid communication such as fax or email would be required.
41. Accept any other relevant points.