Free CIPS L4M7 Exam Questions

Become CIPS Certified with updated L4M7 exam questions and correct answers

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Total 380 Questions | Updated On: May 11, 2026

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Question 1

One of the classifications of inventory is referred to as 'indirect supplies.' Which of the following items are examples of indirect supplies in a water bottling plant? Lubricants for maintenance of production machines Computer cartridges for the procurement office Reams of printed labels to stick on water bottles Blue-colored plastic caps to seal the water bottles

A : 1 and 2 only

B : 1 and 3 only

C : 2 and 3 only

D : 3 and 4 only

Answer: A

Question 2

David is required to include stock turnover ratio in the report. Which of the following should be collected to calculate the rate? Select THREE that apply

A : counted rate

B : livery schedule

C : t purchase

D : osing stock

E : ad time

F : ening stock

Answer: A,C,D

Question 3

Amanda is the purchasing manager for AB Construction based in France. She is considering purchasing an asset from overseas but knows she must account for fluctuations in exchange rates in the contract. Is Amanda correct?

A : No, as it will be better to purchase the asset in AB Construction's local currency as it would be efficient and more stable

B : Yes, as AB Construction could pay more for the asset than intended and Amanda should include a currency fluctuation clause

C : No, as the price can be re-negotiated post-contract sign-off by AB Construction and the supplier

D : Yes, as Amanda will be able to decide the currency exchange rates to be used

Answer: B

Question 4

An organization might find it more beneficial to lease and use an asset over a predetermined period. After this period, the lessee has the right to secure outright ownership of the asset by paying an agreed amount; otherwise, the asset would be repossessed by the lessor. Which of the following is an advantage of leasing?

A : Long-term commitment to pay installments even if not using the asset

B : Costs are known and agreed in advance

C : The usage of the asset is usually capped

D : The total cost of ownership is not applicable as the asset is leased

Answer: B

Question 5

Which of the following are examples of acquisition costs for the buying organisation? Select TWO that apply.

A : The disposal costs of the assets

B : The costs associated with consumer product sales tax

C : The costs of approving and paying invoices

D : The advertising costs of the marketing company

E : The costs of the goods or materials

Answer: C,E

Page: 1 / 76

Total 380 Questions | Updated On: May 11, 2026

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