Observation

1. Candidates’ performance was impressive. Most of the candidates were able to answer this part correctly.
2. Part (b) of the question was poorly attempted by the candidates. The following are some of the required answers.

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Reasons for stores accounting

1. To supply information for stock-taking.
2. To facilitate material planning and provisioning.
3. It provides a basis for inventory control.
4. It helps to indicate the value of stock in the store.
5. It is a means of calculating the costs of goods manufactured.      

1. This part of the question was poorly attempted by the candidates. The following are some of the required answers.

Advantages of holding little stock

1. It lowers holding cost.
2. It requires less storage space.
3. It frees up cash to meet other expenses.

Disadvantages of holding little stock

1. There is a risk of running out of stock.
2. It can make a company miss out on sales.
3. There is overdependence on the efficiency of suppliers.