A-AS Level (CIE) Business Studies Paper-1: Specimen Questions with Answers 3 - 4 of 50

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Question 3


Write in Short

Short Answer▾

Give reasons why a business depreciates fixed assets?


The Reasons for Depreciation

  • The physical using up of a fixed asset, i.e.. corrosion, rot, rust, decay. Although repairs & repairs maintenance may extend the life of the asset, they can never keep the asset working indefinitely.
  • Obsolescence: The fixed assets becoming out of date or obsolete because of new technological advancements.
  • Physical factors: Floods, dampness, or excessive heat or cold may make a fixed asset loose its value.
  • Defluxions of time: Certain assets such as patents & copyrights have a fixed time limit of ownership.
  • Depletion: Wasting assets such as mines or quarries is being depreciated because of the decrease in value.

Question 4


Describe in Detail


Briefly explain span of control


It can be defined as the number of subordinates that a manager can control or supervises. But there is an imitation on the number of people that a manager can effectively manage because of certain constants like time, energy, skills, and so on. To overcome these limitations, every manager must delegate work to as many subordinates as he can properly manage.

Factors Determining Span of Management

  • Physiological Capacity of a Manager: Psychological factors like attitude, personality, decision making, leadership determine the span of management. Managers with these qualities can control wider span.
  • Capacity of Subordinates: Determines the span of management. In case, subordinates are efficient in doing their duties, manager control wider span.
  • Nature of Work: Also affects the span of control. If the tasks are of routine nature with less changes in functioning, the management can cover wider span of management. Type of technology used also affects the span.
  • Degree of Decentralization: Higher is the degree of decentralization, wider is the span of management. A manager with clear authority deflagrates responsibility clearly on the subordinates.
  • Communication Techniques: If one uses advance techniques of communication like email, voice mail, video conferencing, he can supervise a greater number of people.

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