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1 Yes. C = total consumption irrespective of source of the goods.
2 Yes. Government spending is potentially part of the GDP, but if the government spends in importing products, eg weapons, this does not help domestic wealth and this needs to be removed to get the GDP figure.
In your example if a country has no imports, exports or investment and produces 100 chairs the gdp is 100.
However, if 100 chairs are bought (C) by the population and 30 have been imported (I) gdp is 70.
D = domestic.
A large customer base can be categorised several ways:. It is a strength which leads to opportunities.
Strength: you know the contact details of a large number of customers so it is possible to more easily market to them.But that strength also leads to the opportunity of a successful launch of a new product.
Strength: even if one abandons you, you still have many left. If you had only one or two customers, one leaving could be fatal ie a weakness leading to an increased threat of a large fall in demand.
I don’t see that a large customer base can really be described as a weakness.
If the GDP falls, the population is less well off. All consumption will fall irrespective of whether the goods and services are created domestically or are imported.
However, exports should not be affected as they depend on foreign consumption.
So imports down but exports the same. Therefore, the foreign exchange deficit (current account deficit) will fall.
You are told that market research has concluded that “…an increase in price of 10p per unit will result in a fall in annual demand of 70,000 units.”. I don’t know why you therefore assumed that units sold remained the same when the price increased.
The whole idea of price elasticity of demand is to measure how price affects demand. Usually, as price increases demand decreases. The only time that doesn’t happen is if the goods are such necessities that people will buy the same quantities irrespective of price changes.
With respect to the effectiveness of reward systems, CCM can always be used I think.
If the question information (eg Cuthbert) shows that there are some practical problems eg staff unhappy, then this should be traceable to CCM eg the bonuses are trivial or employees have no ways of influencing them.
If there is no current performance linked reward system in place then CCM is something to aim for.
Yes, If there were no problems it would not be much of an APM question. In APM you are always trying to improve things (PM = performance management) so current problems and their mitigation would almost always be important.
Evaluate = appraise, assess, estimate and value ie to judge something with respect to its worth or significance.
Evaluation must look at both positive and negative influences. Eg to evaluate a new IT system you would have to look at:
+Better information
+Better customer service
-Cost
-Chance of disruptionSo, if a company is considering implementing a VBN you would have to look at the potential benefits.
The recommendations would come after evaluation (eg if the evaluation produced mostly adverse news you would not recommend the proposal. Justification is bound up with this but attempts to achieve a fair balance between the effects. For example, in the IT system you would have to balance cost (hard $) against the benefits (Difficult to estimate $). Justification = your argument for either going for the proposal or rejecting it.
I agree with you. The phrase in the comments does not seem to relate accurately to the requirements.
I don’t quite understand your second query. The requirement states,:
“Prepare briefing notes for the board ….” so seems clear.
Despite what thw answer might say, there is no such thing as a real or nominal GDP. The GDP is an absolute number and is measured in $ (or whatever currency you want).
Nominal, real and inflation are all measured as percentage changes, or rates. The nominal rate is also known as the ‘Money rate’, ie how much the flows of money have increased…but you have to take inflation into account to know how much better off you really are, ie the real rate.
The relationship is:
1 + Nominal rate (or money rate) = (1 + Real rate) x (1 + Inflation rate).
In the example:
Nominal rate = 10%
Inflation rate = 6%So: 1 + 0.1 = (1 + 0.6) x ( 1 + real rate)
1 + real rate = 1.1/1.06 = 1.038
So real rate is 0.038 or 3.8%.
HTH
Thanks. A question is always easier when all the required information is supplied!
I think the StudyHub answer reflects what ACCA would like to think the relationship is, ie fully independent, rather than what it actually is.
If this question comes up in the exam go for ‘External’!
To cause a suspense account, one sided errors must have been committed. Eg do the Cr but not the Dr or not listing an account in the TB.
1 Should be 365 Dr to discounts allowed. Error on TB is 2 x 365 = 730 too much Cr so a Dr on suspense account needed to make tb balance.
2 No effect. The Cr was to the wrong person but double entry is maintained.
3 No entries have been made for these items so the TB would still balance. No suspense account effect.
4 9 too much Dr, so a Cr of 9 in suspense account needed.
5 Double entry is complete, though wrong so no suspense account implications.
730 – 9 = 721.
Suspense accounts arise only from one-sided errors.
(a) 70 too much Dr, so this would need a Cr in the suspense account to make it balance.
(b) 12000 to much Dr as no matching entry in creditors ledger. Another Cr needed in suspense account.
(c) No effect on TB balancing: salary debited instead of a debtor.
(d) A missing Cr to accruals, so a Cr of 190 in the suspense account is needed to make things balance.
70 + 12000 + 190 ÷ 12260
I would place an external auditor as connected. They have to be independent and are appointed by the members, but they have a contractual relationship with the company and will advise on internal control and the presentation of the financial statements.
In addition to the resources you mention, I would strongly recommend that you buy a revision kit/question bank from BPP (20% discount if bought through OT). The questions in the exam can be tricky/sneaky/subtle and you can never have too much practice.
Don’t mark your question bank: write answers on a separate sheet to keep your book clean and hint-free for trying questions again. Note which ones you got right and wrong and give priority to going back to those you got wrong.
OT provides notes, not a text book, and cannot be as comprehensive as a text book, but we aim to cover all the main syllabus areas.
See this thread:
https://opentuition.com/topic/thank-you-opentuition-12/
What’s really important is that you practise lots and lots of questions as mentioned on our website at
https://opentuition.com/cima/cima-e1/
You can get these by buying a BPP or Kaplan revision kit/question practice book.
Why did you ask me if you had an answer in the book? You have to look hard on Google to find ‘Kolb’ and ‘ Internalisation linked. My reference suggested reflection.
I would go for B.
The MD is obviously being open and, it seems to me to be showing respect.
It would be the second stage, reflection, where you think about the issue, problem etc,
Probably B and D, but could also be C.
The problem is that different organizations can decide for themselves.
