Answering Trade Payable Scenario Based Questions (SBQ)
In this lesson, we will learn a step-by-step approach to answering scenario-based questions on trade payables. This includes learning how to identify positive and negative points in the scenario to support and justify our decisions.
Related Lessons:
Steps to Answering Scenario Based Question
In answering a scenario-based question, we have to choose between two choices. This must be clearly stated in your answer.
We need to support our choice with three reasons obtained from the question. For each reason, we must explain why it support our decision and what benefit does it brings to the business.
Answering Trade Payables SBQ
In a trade payables scenario-based question, we are required to advise the business on which of the two suppliers it should buy their goods from.
The business would prefer to buy from suppliers who provide good sales service, for example the ability to try the product or have detailed explanation on the product prior to purchase. This helps the business avoid buying unsuitable products, thus save unnecessary cost. Supplier who offers longer warranty period would also be preferred by the business since this helps to reduce repair cost.
Supplier who provides good credit terms is also attractive as this can help our business cash flow. Excess cash can be used to pay for immediate debts or more urgent expenses.
Lastly, the selling price offered by the supplier is also an important factor. A supplier that offers a lower price is usually more attractive than one that charges a higher price.