Free CIPS L4M4 Practice Exam with Questions & Answers | Set: 5

Explanation

According to p.75 "a RFQ attempts to assess which supplier can achieve the Five Rights of Procurement". Although price is the only factor considered when using a RFQ- it's important to consider this price in detail; can the supplier deliver the right QUALITY of product for this price?, can they deliver the item WHEN we need it for this price? etc.

The answer is not 'who will deliver it the cheapest' because Jamilla might not pick the cheapest sup-plier. If the cheapest supplier has inferior quality paper, or can only make deliveries every other Tuesday then Jamilla may not select them.

Explanation

the right to change nationality is not included in the UN Declaration of Human Rights. There are 30 in total but you're not expected to know them all. You should know the big ones though which are; life, security, belief, equal treatment, free speech and expression. A summary can be found here: Universal Declaration of Human Rights | United Nations

Explanation

The lowest risk to the buyer is 'delivered duty paid'. This is because the supplier does all the work transporting the items to the buyer's premises. Incoterms_2020_chart | Intersped

Explanation

liquid = the ability to pay short and medium term debts. In simple terms do you have more in stuff (money, assets) than you owe in debt?

Understanding Liquidity and How to Measure It (investopedia.com)

This is a hot topic for the exam. Learn everything in this section.

Regulatory frameworks that affect procurement focus on ethical practice (anti-bribery, modern slavery, human rights), data protection (GDPR and similar), and competition law (to prevent collusion and monopolistic practices). While digitisation and innovation are important trends, they are not regulatory requirements. Similarly, culture, branding, and uniforms are internal matters, not regulatory areas. Responsible sourcing requires procurement professionals to ensure compliance with these regulations to protect stakeholders, maintain fairness, and safeguard organisational reputation.

Prohibiting trade union membership is a violation of workers' rights and international labor standards. Such a practice indicates potential non-compliance with ethical sourcing principles and necessitates further investigation. Ensuring that suppliers respect workers' rights to association is fundamental to ethical procurement.

Explanation

a balance sheet shows 'equity, assets and liabilities'. The other financial statements you need to know for this exam are cash flow statements and and income statements.

If you're not familiar with these three I strongly recommend you do some further reading on this before the exam if you can. This is helpful: How the 3 Financial Statements are Linked Together - Step by Step (corporatefinanceinstitute.com)

Explanation

current assets, current liabilities and equity can be found on a balance sheet. Net and gross sales will be found on a profit and loss account.

Explanation

Coercion is not a type of fraud. The other three are.

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities. In this case:

Current Assets = $300

Current Liabilities = $150

Current Ratio = 300 ÷ 150 = 2.0

This indicates that the supplier has twice as many current assets as current liabilities, suggesting good short-term financial health.