Business 0450 · IGCSE · Statement of financial position
Statement of financial position — practice question
CPW is a private sector business with a number of objectives. It sells electrical goods, including kettles and ovens, through its 36 shops in country X. CPW also provides a delivery service. To avoid import tariffs, the business buys all of its inventory from local suppliers. The Finance Director is studying CPW’s statement of financial position. An extract is given in Table 2.1. He has been asked to identify a source of finance to buy 10 new delivery vehicles.
(a)[2]
Define what is meant by ‘import tariff’.
(b)[2]
Identify one non-current asset and one current liability from the extract.
(c)[4]
Outline two ways in which the information in Table 2.1 could be useful to CPW.
(d)[6]
Explain two factors CPW should consider when choosing a source of finance for the new vehicles.
(e)[6]
Explain two objectives a private sector business may have. Which objective is likely to be the most important? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A tax levied on imported goods” …