You are the credit manager of XXX Company. The company policy on the granting of credit will have to be revised to prevent bad debts. Make your recommendations to the rest of the management.

(Total: 50 marks     Content: 44 marks        Insight: 6 marks)

NOTE:

If a case study, in the form of an addendum, is provided so as to give the candidate more information on the situation presented in the question, the candidate is expected to apply that information in his or her answering of the question.

The content of the answer to the above question will, therefore, include the following:

Introduction: Setting the scene
Discussion:   Credit terms; determining creditworthiness; 
              conditions for granting credit; 
              duties of the credit department;
              and collecting overdue accounts.
Conclusion:   Possible effect on bad debts and profitability

The different sections of the answer will each be allocated a minimum and a maximum number of marks and so a candidate must ensure that he or she devotes the necessary attention to all sections of the answer.

The mark allocation could be as follows (if each fact counts 2 marks):

Credit terms                     Maximum 6 
Credit worthiness                Maximum 12 
Conditions for granting credit	 Maximum 12 
Duties of the credit department  Maximum 14 
Overdue accounts                 Maximum 12

The maximum number of marks awarded for factual information provided by a candidate would, in this instance, be 44 marks. A candidate would therefore only be able to attain full marks for the full question if all the sections have been discussed. (Refer to the rubric criterion: Layout)

The candidate’s mark for insight (maximum 6 marks in this case) would be determined using a rubric such as the following:

SECTION A

SECTION B AND C