2018 Sample BAFS Level4 E

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Level 4 Exemplars

Paper 1 Section B
Comments

The candidate demonstrated sound knowledge and understanding of business and accounting
concepts and was able to apply this knowledge and understanding in tackling business problems in
simple unfamiliar situations. He/She communicated factual information, opinions and suggestions in
a structured manner, using appropriate business terminology.

In Question 1 part (a), the terms ‘firewall’ and ‘cost’ were mentioned. However, the explanations of
the technological and economic factors were inadequate. In part (b), the strategy of setting up
production lines in developing countries with lower labour costs was clearly explained. In Question
2 part (b), the contribution of SMEs in promoting innovation was well explained. In Question 3 part
(a), the candidate was able to explain the changes in share price under each policy, and
comprehensive elaboration was given for (ii). In part (b), the going concern assumption was not
clearly explained and the candidate failed to point out that the non-current assets should be valued at
their liquidation value/net realisable value. In Question 4 part (a), closing inventory was not
included in the statement of financial position, bank loan was wrongly classified as a non-current
liability and the date of the capital was omitted. In parts (b) and (c), the leadership style was
correctly identified as being autocratic, though it was wrongly spelt. Its adverse impacts on staff
motivation were clearly explained.

The answers provided by the candidate were well structured and showed appropriate analysis of the
business situations mentioned in the questions. This piece of work is of Level 4 in the HKDSE
reporting scale.
Paper 2A
Comments

The candidate demonstrated sound knowledge and understanding of accounting. The candidate was
able to apply his/her accounting knowledge to simple unfamiliar situations and to synthesise
information in the context of business decisions.

In the practical accounting questions, the candidate was able to provide appropriate solutions to
most of the questions in both Sections A and B. Adjustments in unfamiliar situations were fair. In
Question 2, the candidate recorded the post-dated cheque, the unpresented cheque and the
uncredited cheuqe properly. In Question 4, the candidate was able to record the goodwill adjustment
and revaluation gain in the capital balance of the partnership. In Question 5, the average trade
receivables collection period, the average trade payables repayment period and the gearing ratio for
2016 were calculated correctly. In Question 7, the candidate made mistakes in the computations of
purchases, closing inventory and administrative expenses. The candidate did reasonably well in
costing Question 6(a), though his/her performance in Question 3 was not of the same standard.

The candidate was able to communicate factual information and opinions in a structured manner
using appropriate business terminology. In Question 2(b), the candidate was able to state the cheque
number for the post-dated cheque. In Question 7(d), the candidate pointed out that the increase in
the balance of the general reserve would not affect the company’s ability to pay dividends.

In summary, the candidate demonstrated sound knowledge and understanding of accounting,


demonstrating good synthesis and application skills on most of the topics in the paper. This piece of
work is of Level 4 in the HKDSE reporting scale.
Paper 2B
Comments

In general, the candidate demonstrated sound knowledge and understanding of business


management concepts and was able to apply these concepts in most of the cases. He/She was able to
communicate ideas and arguments in a structured manner using appropriate business terminology.

In Question 1, the candidate was able to provide some appropriate risk management strategies with
clear explanations. In Question 2, the candidate did not show a thorough understanding of product
strategies and therefore wrongly suggested offering a discount as the answer. In Question 3, the
candidate demonstrated a good knowledge of internal communication programmes and was able to
make relevant suggestions. In Question 4, the candidate was able to calculate the trade receivables
turnover but his/her comments on the credit policy were unclear and incomplete.

In Question 5 (a), the candidate did not have sufficient understanding of the operating cycle and
cash conversion cycle and therefore failed to describe clearly the two concepts. In part (b), the
candidate was able to describe the limitations of using budgetary control, e.g. budgets are rigid,
though better elaboration was needed. In part (c), the candidate expressed some ideas about
marketing but his/her knowledge of the ‘marketing concept’ and its application to the food truck
business was very limited. Lastly, in part (d), despite the mis-spelling of ‘demographic’, the
candidate was able to show some knowledge of the bases of market segmentation and gave a clear
explanation.

In Question 6 (a), the candidate was able to highlight some disadvantages of the proposed
remuneration system, e.g. income becomes unstable, and the limitations of performance appraisal,
with relevant explanations. In part (b), the candidate answered the question well and demonstrated a
good understanding of Theory Y type staff. In part (c), the candidate comprehended the difference
between the methods of net present value and accounting rate of return. The answer was evidence of
the candidate’s good knowledge of these two investment appraisal methods. Lastly, the candidate
was able to briefly explain two non-financial factors, both of which had relevancy to the case.

In Question 8 (a), the candidate was able to explain clearly the various data collection methods in
the context of a language learning centre, though the experimental research method was missing. In
part (b), the candidate discussed the major steps in conducting a performance appraisal and
illustrated them by relevant application to a language learning centre. This piece of work is of level
4 in the HKDSE reporting scale.

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