CIPS A8 Exam Practice Test Instant Access

Question 1

In which of the following situations is a purchase order most likely to be regarded as a counter offer?

AThe order is sent to a supplier without there being a preceding quotation from the supplier

BThe order is sent to a supplier following a quotation from the supplier bearing the supplier's contract terms

CThe order is sent to a supplier as a result of the buyer being impressed by the product description in the suppliers catalogue

DThe order is sent to a supplier to call off a consignment of materials from a blanket order.

Answer : C

Question 2

Which of the following is the place at which the risk of goods in transit passes from the seller to the buyer under the Ex-Works Incoterm 2000?

AAt the place and to the carrier named by the buyer

BAlongside the ship on the quay named by the buyer

CAt the suppliers works or warehouse

DAt the named destination place

Answer : A

Question 3

Which of the following best describes the term 'progress payments'?

AA series of payments made at prescribed stages during the contract, usually linked to work satisfactorily completed

BA payment withheld for a period of time after the end of the contract period to ensure satisfactory completion of the contract

CA payment made in advance of the supplier commencing work to enable materials to be purchased

DA payment made to an international supplier using a currency of the suppliers choice.

Answer : C

Question 4

Which of the following best describes the nature of risks as applied to 'contract management'?

AThe possibility that the goods being supplied might be dangerous in some way

BThe question of when ownership of the goods actually changes hands from seller to buyer

CThe foreseeing of things that could possibly go wrong with the performance of the contract

DThe possibility that the goods being supplied might have to travel through unstable or war-torn parts of the world.

Answer : C

Question 5

Which of the following best defines the term 'variable pricing'?

AA price which, though fixed at the outset, can be changed by agreement between buyer and seller

BA price that is based on the sellers costs with the addition of a profit margin on those costs

CA price that can fluctuate over the length of the contract and which is usually monitored by using indices

DA price that is subject to discount at the end of its completion based on the aggregate quantity of items purchased.

Answer : B

Question 6

Which of the following is classed as a material alteration to an offer under the UNCITRAL convention?

AType of packaging

BMethod of delivery

CThe price

DUse of agents

Answer : B

Question 7

Which of the following best defines the term 'retention clause'?

AThe supplier keeping the goods to be supplied and not delivering them until the buyer has paid for them in full

BAn agreed percentage of the contract price held back by the buyer to be paid when they are satisfied as to the quality of goods delivered or work completed.

CThe supplier retaining legal title to goods that have been delivered until the buyer has paid for them in full

DAn agreement whereby the supplier will keep spare parts available, for equipment supplied to the buyer, for a certain time period.

Answer : D

CIPS A8 Preparing and Managing Contracts Exam Practice Test