Unit 15 NVQ practice test

phunkyphantom22 Registered Posts: 166 Dedicated contributor 🦉

I'm doing a practice test for unit 15 (CMCC) and just wanted to check some answers.

Q1: Give 4 factors which need to be considered when granting credit.

I was thinking these would be RISK i.e. how likely is customer to pay etc., LIMIT how much to give them, CREDIT PERIOD and BENEFITS i.e. will it increase sales? I am not sure if I am on the right line of thinking and I can't find an actual list anywhere in my text book.

Q2: How does cash balance management differ between public and private sector organisations?

All I can think of for this is that public is cash accounting and private is accruals accounting and this affects things such as purchase of fixed assets (no asset in b/s and depn), public sector pensions (no accrual) and no matching of income against expenditure.

Am I on the right lines?

Also, what would be the key characteristics of stocks and shares?

I was thinking that there is the risk of making a loss and the types of return are income and capital return. Is there more?
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