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NEW QUESTION 28
A procurement professional is drafting payment terms for a commercial contract. He is considering about payment method if defective products are found. Which of the following should be embedded in payment terms to control this issue?
- A. Retention clause
- B. Pay-less notice
- C. Remedies for late payment
- D. Invoice preparation
Answer: A
Explanation:
Retention money is the payment for a service or product that is withheld pending the completion of some specified condition. For example, buyer may withhold the amount due until the supplier replace all defective goods.
Pay-less notice is the notice under a contract which states that the invoice will only be partially paid because of some issues such as supplier has to pay the damages.
Remedies for late payment are remedies that supplier may seek when a buyer pay it later than the stated payment terms. Normally, the buyer will be charged an interest rate.
Reference:
LO 3, AC 3.3
NEW QUESTION 29
Which of the following is set down in statute as a liability that exists without any need to prove fault?
- A. Non-current liability
- B. Strict liability
- C. Contingent liability
- D. Current liability
Answer: B
Explanation:
– Strict liability, sometimes called absolute liability, is the legal responsibility for damages, or injury, even if the person found strictly liable was not at fault or negligent. Strict liability has been applied to certain activities in tort, such as holding an employer absolutely liable for the torts of her employees, but today it is most commonly associated with defectively manufactured products. In addition, for reasons of public policy, certain activities may be conducted only if the person conducting them is willing to insure others against the harm that results from the risks the activities create.
– Current liabilities are a company’s short-term financial obligations that are due within one year or within a normal operating cycle.
– Non-current liabilities, also called long-term liabilities or long-term debts, are long-term financial obligations listed on a company’s balance sheet
– Contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event.
Reference:
LO 3, AC 3.2
NEW QUESTION 30
Which of the following is regulated by standard ISO 14001?
- A. Information security management
- B. Environmental management
- C. Quality management systems
- D. Energy management
Answer: B
Explanation:
ISO has about 22,000 international standards covering a vast range of aspects of product or service quality. Below are some of the most common ISO standards:
– ISO 9001: Quality management system
– ISO 27001: Information security management
– ISO 5001: Energy management
– ISO 14001: Environmental management
Reference:
– ISO 14001:2015 Environmental management systems – Requirements with guidance for use
– CIPS study guide page 86
LO 2, AC 2.1
NEW QUESTION 31
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