Why use international accounting standards?

• Provides a ‘framework’ for the production of financial statements
• Reduces number of different treatments
• Meets the directors duty that financial statements comply with IAS
• Meets the auditors report requirements
• Ensures accountants follow the same set of rules

Benefits of IAS

• Standardises accounts internationally
• Easier for user to make inter-firm comparisons
• Reduces variations of accounting treatments

IAS 1 Presentation of Financial Statements

• Income Statement - reports on the financial performance of the company
• Balance Sheet - reports on the financial position of the company
• Cash Flow Statement - changes in cash flow, reconciles between balance sheet dates
• Requires compliance with accounting concepts from AS
• Offsetting - it is not permitted to offset assets and liabilities to produce a net figure
• Comparative information - the financial statements must show information from previous years in order for users to make comparisons

IAS 2 Inventories

• Inventory must be valued at the lower of cost or net realisable value
• Cost = cost price plus costs incurred to get the product into a saleable condition (eg delivery)
• Net realisable value = estimated selling price less costs required to get the product into a condition necessary to complete the sale (eg repairs)

IAS 7 Cash Flow Statements

• IAS 7 states that a Cash Flow Statement must be prepared
• Operating activities - ordinary activities of a business with adjustments for changes, less tax and interest
• Investing activities - purchase of property, plant and equipment, sales proceeds from PPE, dividends received, interest received
• Financing activities - issue of shares, issue of debentures, repayment of shares, repayment of debentures, dividends paid
• Reports on changes in financial position (balance sheet dates)

IAS 10 Events After the Reporting Period

• Events that take place after the accounts have been prepared but before authorisation
• Changes can only be made before the financial statements have been authorised and after the year end
• Adjusting events - events that provide evidence for conditions that existed before the year end. If the amounts are material then the accounts should be changed
• Non-adjusting events - conditions that arise after the end of the reporting period. Disclosed in notes, no adjustment to statements

IAS 16 Property, Plant and Equipment

• Recognised when it is probable economic benefit attributable to the asset will flow to the business and when the cost of the asset can be measured reliably
• Recorded at cost initially but then business can choose to value at NBV (cost less accumulated depreciation) or at revaluation
• Depreciated either with straight line or diminishing balance method

IAS 18 Revenue

• Uses realisation concept - recorded when legal ownership changes hands, not money
• Revenue is the ordinary trading activities of the business
• Sale of goods & services
• Interest, royalties and dividends

IAS 36 Impairment of Assets

• Assets need to be checked for impairment at each balance sheet date
• Impairment occurs when the recoverable amount is less than the NBV
• Recorded on balance sheet at recoverable amount, impairment shown as an expense in income statement
• External indicators of impairment: new technology, fall in asset market value, increase in interest rates
• Internal indicators or impairment: obsolescence/physical damage, reorganisation of business

IAS 37 Provisions, Contingent Liabilities & Contingent Assets

• Provisions are liabilities that have more than a 50% likelihood of happening (the company has the liability as a result of a past event but the outcome has not been determined) and the financial statements are adjusted & information disclosed as a note.
• Contingent liabilities are liabilities that have less than a 50% chance of occurring (an obligation based on past events but with an uncertain outcome). There are two types, possible and remote. If it is possible, there is disclosure in the notes, but not recognition in the financial statements. If it is remote, no disclosure and no recognition in financial statements.
• Contingent assets are assets that may come into the business but can only be confirmed by uncertain future events. They can be probable, possible and remote. They are NOT recorded in the accounts until the business is virtually certain it will happen (because of prudence.) If it is probable, disclosure in notes. Possible, no disclosure. Remote, no disclosure.

I am extremely surprised/happy about (most of) these!

History - B - bit gutted about History because I thought I’d done a bit better, enough for an A, as that’s what I got in most of the mocks. I’m dropping History next year though so it’s not a huge setback. I might need to retake depending on what AS grades universities require me to have but overall I’m not devastated.

Maths - A!!!!! - I CAN’T BELIEVE I GOT AN A IN MATHS. I THOUGHT I’D FAILED SO BADLY. After every maths exam I just felt so awful about it and had basically convinced myself I needed to retake them all. I can’t believe it. I got A’s in C1 and C2, but a B in S1 so I’ll probably retake S1, maybe C1 too because I want to secure as many points as possible to compensate for losing marks on the harder exams next year.

Accounting - A - Really pleased with this too, considering I retook Unit 1 again as I got a B last time. I did better in Unit 2 than Unit 1 but not by much, I felt relatively good about these exams after I’d sat them. Not much else to say really, but very happy!

English Lit - A - Kind of already knew/assumed/hoped I had an A here, as the only exam was in January which I got an A in and then the rest was coursework. Again, very happy!

So it wasn’t as bad as I’d anticipated, actually it was good (except History, but a B is still good, right?!) I achieved better results than I thought so I’m happy. I haven’t found anybody at my school who got higher than a B in History so maybe it was just really hard, I dunno, whatever, happy Anna. :3

But I feel I ought to say that it’s one week until results day and this time next week I’ll probably be devastated.

Results day on the 16th of August, terrified!

Section A

Read Document 3

1 You should use the exact words of the author in your answers to question 1.

(a) State the main conclusion of the argument within paragraphs 1, 2 and 3.

“the e-cigarette should be seen as an unwise choice.”

(b) State two reasons that are given to support the main conclusion within paragraphs 1, 2 and 3.

1. “other’s think the price could put some people off”

2. “some consider the e-cigarette is a bit feminine for a man to use”

(c) State the hypothetical reason within paragraphs 1, 2 and 3.

“If some reports are to be believed, e-cigarettes do not have harmful effects”

(d) State the counter conclusion within paragraphs 1, 2 and 3.

“The introduction of the e-cigarette is being seen as providing a modern and acceptable way to smoke indoors”

2 Consider the third sentence in paragraph 1, ‘A student from Ashford, Middlesex, remarked, “I like the e-cigarette. It doesn’t make my hands smell like a cigarette does.” ’

(a) Name the argument element used.

Example.

(b) Explain your answer to 2(a).

It illustrates the counter-reason.

3 An example is given in paragraph 2, ‘with a bar worker from Bethnal Green commenting, “£50 is a lot of money to pay for a gadget. I wouldn’t pay that much.” ’ Explain two ways in which this example might or might not be representative.

1. A bar worker is not representative of the whole smoking population if his salary is lower than theirs, making this example not representative.

2. The salary of a bar worker might reflect the salary of the average smoker so it would seem like a lot of money to them, making it representative.

4 In paragraph 2 it says, “… some consider that the e-cigarette is a bit feminine for a man to use.” State the assumption that must be made here in order to support the claim that the e-cigarette is an unwise choice.

It is unwise for a man to look feminine.

5 Suggest one reason of your own to support a claim that e-cigarettes are not a good way of helping smokers to quit smoking. You must give only a reason and not add other argument elements.

It will not allow them to break the habit of physically picking up something to smoke.

6 Consider the argument presented in paragraphs 2 and 3. Assess how strongly the reasons given support the conclusion.

You should include:

• two developed points

• these should refer directly to the links between the reasons and the conclusion.

The reason “it presents potential dangers, such as the health risks associated with nicotine and other chemicals” strongly supports the conclusion that “the e-cigarette should be seen as an unwise choice” as it demonstrates how it could still damage health by using it so the dangers would outweigh the benefits, agreeing the fact that using them would be unwise.

The reason “price could put some people off” does not support the conclusion that “e-cigarettes are an unwise choice” because although it is a disadvantage, the reason is not strong enough to put someone off using them or to be considered ‘unwise.’

7 Assess the credibility of Document 2 from e-cigarette-global.com. You should make two points. Each point should identify and use a relevant credibility criterion to assess the credibility of the document and support this with reference to the text.

1) The expertise of the source is great as it has a representative from the CIEH, who are ‘advisers to the regulatory authorities’, giving them expertise to make an accurate and reliable comment on the e-cigarettes, increasing credibility.

2) The source is likely to be biased as the website is e-cigarette-global.com, and they share a vested interest to endorse the e-cigarette as it is what their website is based upon, so if it were to be seen in a bad light the purpose of their website would be diminished, making it less credible.

8 In Document 3, the Notting Hill bar manager claims, “I think that it would cause problems by blurring the boundaries and creating confusion.”

(a) Identify a claim and its source, within Document 2, that is consistent with this claim.

“It looks, tastes and smokes like a conventional cigarette” - inventors

(b) Identify a claim and its source, within Document 2, that is inconsistent with this claim.

“I showed him the product and he was fine with it” - 58 year old smoker

9 Assess the credibility of one reported claim made by the World Health Organisation in Document 3 and one reported claim made by the inventors in Document 2. Apply two credibility criteria to explain how these may strengthen or weaken the credibility of the selected claim.

(a) World Health Organisation

Claim: ‘WHO knows of no evidentiary basis as for the marketers’ claim that the electronic cigarette helps people quit smoking’

Assessment: 1) It would be neutral towards the cigarettes as the WHO are there to advise the public truthfully so they can remain healthy, not distort the truth as they have no reason to lie, strengthening the claim.

2) The WHO are a reputable worldwide source, so they would be a respected body to go to for advice, strengthening the claim. In order to maintain this reputation, the information the provide must be reliable in order to not damage their credibility.

I can’t be bothered to finish this, I’ll just read my cue cards instead.

Section A

You should use the exact words of the author in your answers to questions 1(a), 1(b), 1(c) and 1(d).

1 (a) State the main conclusion of the argument in Document 2.

‘If you want to be happy, you should give your money away.’

(b) Refer to paragraphs 1 and 3 of Document 2 to state two reasons that are given to support this conclusion.

1. ‘The richest countries do not always have the happiest people.’

3. ‘In terms of happiness how people use their money is at least as important as how much they earn.’

(c) State one example that is given to support the reason in paragraph 1 of Document 2.

‘The Inuit of northern Greenland, who no not lead a life of luxury.’

(d) State one piece of evidence that is given in the first three paragraphs of Document 2.

‘American multimillionaires rated their happiness far higher than did homeless people in Calcutta.’

Consider the second sentence in paragraph 1 of Document 2, ‘We commonly believe that happiness comes from wealth.’

2 (a) Name the argument element used.

Counter assertion.

(b) Explain your answer to 2(a).

It is an assertion that goes against the main argument.

Assess the support given by the photograph to its caption, ‘wealth is not a good indicator of happiness’.

3 (a) Explain one way in which the photograph may give support.

It shows a family enjoying themselves on the beach, and as going to the beach is free, it supports the argument.

(b) Explain one way in which the support might be limited.

There is no proof that the family are not wealthy so the support is limited.

4 (a) State what would need to be assumed about the charity champions in paragraph 4 of Document 2, to support the claim, ‘If you want to be happy you should give your money away.’

Giving away their money has made them happy.

(b) Suggest one reason to support the claim, ‘Happiness comes from wealth.’

‘American multimillionaires rated their happiness far higher than did homeless people.’

5 Consider the argument presented in Document 2. Assess how far the reasons support its conclusion. You should include two developed points that refer directly to two of the reasons and the conclusion.

The reason ‘if there is enough money for basic needs, greater wealth does not appear to make people any happier’ does not strongly support the conclusion that ‘you should give your money away’ but it does suggest wealth alone does not equal happiness.

The reason ‘charity champions clearly demonstrates the benefits’ weakly supports the conclusion that ‘if you want to be happy you should give your money away’ because it does not specify who receives the benefits, and it could be the charity rather than the benefit of happiness.

Section B

6 Assess the credibility of Document 4.

You should make two points, each point should identify and use a relevant credibility criterion to assess the credibility of the document and support this with reference to the text.

1. The document has some degree of bias in it as it is produced by the cabinet office who support the Prime Minister, so clearly it would be biased towards showing that progress is being made as it would want to make the cabinet look good. This weakens the credibility.

2. It has expertise, as the cabinet office would have some degree of experience in their job so it is likely the information provided is reliable and accurate, strengthening the credibility.

In Document 3, Professor Ruut Veenhoven claims that ‘humans are not solely motivated by money.’

7 (a) Identify one source and their claim that would be consistent with this claim.

“Most of the research in the past has said that money isn’t important in terms of happiness.” - Professor Stephen Joseph

(b) Identify one source and their claim that would be inconsistent with this claim.

“If you have a choice of two jobs, most people will choose the better paid job.” - A well known businessman

8 (a) In Document 3 the researchers and Professor Stephen Joseph make claims about the results of Professor Dunn’s study. Assess the credibility of a claim made by each of these sources.

You should apply two credibility criteria to explain how these may strengthen or weaken the credibility of the selected claim.

Researcher’s claim: “Governments may be able to improve the happiness of citizens with policies designed to promote “pro-social” spending, by encouraging people to spend their income on others rather than themselves.”

Assessment: 1) The researchers should be knowledgeable in this field as they have researched it and have evaluated the best cause of action to take by the government, greatening the credibility of their claim.

2) The researchers may have a vested interest to get their study seen by many and increase it’s importance, which linking it to government policy does, weakening the credibility of their claim.

Professor Joseph’s claim: “Telling people how to spend their money, even if it is for worthwhile causes, is a very dangerous plan.”

Assessment: 1) Professor Stephen Joseph has a lot of expertise in this field as he is the professor in the field of the psychology of happiness, meaning he is an expert in the area Dunn has studied, heightening the credibility of his claim as he must know the topic in great detail to be a university professor.

2) Joseph is not biased towards Dunn’s research as he was not involved in the study, greatening the credibility of his claim as he is not biased towards backing up her research to make it more believable, he is just stating his honest opinion.

Explain what other information you would need to know in order to reach one of your points of assessment in 8(a) about the credibility of Professor Stephen Joseph’s claim. You should make one precise point.

(b) You would need to know how long he had been a professor for and the quality of his research.

Referring to the material within the documents, come to a judgement as to whether or not the government initiatives to create a generous society will succeed. You should make a reasoned case with a judgement based on:

• the relative plausibility (likelihood) of both outcomes i.e the success and failure of the initiatives in Document 4.

• an assessment of the quality of evidence in Documents 1 and 3 that would support both the success and failure of these initiatives.

If the government are able to educate children with the ‘Giving Nation’ and ‘Go-Givers’ programmes, this may increase the success of creating a generous society as bringing the children up teaching them the important of charitable giving it may continue through with them to adult life. However, if people don’t have enough money to afford ‘basic needs’, the likelihood of them giving to charity is weakened. As educating children and people having enough to afford basic needs is probable, it is likely the government initiatives will succeed.

Dunn’s quality of evidence is limited as she only did three experiments, one of 632 people, then 16, then 46, meaning her sample may not be reflective of everybody in society. This would reduce the success of government initiatives succeeding as although this sample showed “those who spent money on others reported greater happiness”, this is not necessarily the case throughout all of society, although the larger sample of 632 may dispute this.

She surveyed American men and women, Boston company employees and student volunteers - these are not representative of the whole UK population and may have different reactions to their money spending, meaning the scheme is less likely to succeed as it is based on the UK and not just these specific groups.

The claim “most of the research done in the past has said money isn’t important in terms of happiness” is not clear and is not supported by details of the size of the sample or who the research was conducted by, making this evidence bad quality and therefore making the government initiatives likely to fail. 

As there is no proof for economists believing that “humans act essentially out of financial self interest”, this piece of evidence is also limited but towards the success of the scheme as this supports the idea a generous society would be difficult to create.

It is more likely than not that the government backed initiatives will succeed as although there are doubts surrounding the motives of society, they are outweighed by the strong evidence that charitable giving will be well received by society as it impacts on happiness. None of the evidence is overly strong but there is better quality evidence leaning towards success.

How did Nixon intend to end the war using military methods?

• 1969 - tried an offensive against the Ho Chi Minh Trail to sever enemy supply lines and encourage negotiation, considered invading North Vietnamese “madman tactics” and Vietnamisation.
• 1970 - continued heavily bombing trail, bombed trail in Cambodia and invaded - had to stop due to anti war protesters.
• 1971 - launched an offensive in Laos to capture supplies - originally successful, but failed. A job Westmoreland refused to do with four US divisions, Nixon had one ARVN division.
• No progress after 3 years.

How did Nixon intend to end the war using diplomatic methods?

• 1969 - Paris talks had stalled, secret peace talks between Kissinger and Hanoi. Offered simultaneous withdrawal, hinted US would leave anyway. Hanoi remained unimpressed - why should they agree to peace if US leaving anyway? Turned to Moscow for support, offered détente. (Relaxation of US-USSR tension) Also turned to China - linkage.
• 1970 - No immediate progress. Nixon made it clear he wanted to be out of Vietnam by 1972 elections.
• 1971 - Seemed linkage working. Soviets and China pressuring Hanoi to accept peace terms and not to insist on Thieu’s removal. Nixon offered new peace terms - no mutual withdrawal - but Hanoi still unimpressed. 
• Diplomatic policies ineffective.

Why it seemed unlikely the war would end by 1972

• Nixon’s military and diplomatic pressure unsuccessful - bombing offensive antagonised many Americas, US pilots shot down and captured.
• ARVN were not good at fighting on their own - crumbled when faced against PAVN as they had tanks and artillery provided by Russia. Proved Vietnamisation not working.
• “Defeat is not an option” - Nixon feared his political future if he were to lose. Felt Kissinger underestimated the dangers of a failing foreign policy so escalated bombing.
• Linebacker I - Bombed oil depots and major harbours to damage industry with B-52’s. Threatened to cancel cold war summit - Hanoi and Russia divided. “That summit is not worth a damn if the price for it is losing in Vietnam.”
• Decided to mine NV ports (Haiphong) - made it clear he would not destroy Hanoi, but he would hurt it.

Hanoi finally being driven to a settlement by a combination of ally pressure, failure of the offensive to take big cities, Operation Phoenix and the destructiveness of B-52’s.

WHY Nixon finally made peace in 1972

• He wanted re-election - believed he would definitely be re-elected if he got US out of war and would go down in history books. Feared the future of his political career and did not want to be the first president to lose a war.
• American public opposition growing - anti bombing. Despite Nixon trying to keep bombing of Cambodia a secret, media found out and anti war protests increased. Nixon grew more concerned for his safety and reputation.
• ARVN were weak when left alone to fight - doubt in Vietnamisation.
• Congress cut funding - began to doubt Nixon and Thieu.

HOW Nixon finally made peace in 1972

• Forced Thieu to accept new terms - he knew funding would be cut and Nixon would sign peace accords with or without him. Thieu classed this as a surrender.
• Soviet and Chinese pressure - peer pressure made Hanoi realise war could not be won without their support.
• Operation Linebacker II - convinced Hanoi to come back after walking out. Christmas bombing.

Explain why the USA became involved in the defence of South Vietnam in the years 1961 to 1964. (12 marks)

• Commitment trap - Kennedy had inherited involvement in Vietnam from his predecessor, Eisenhower, who gave $7 billion of economic aid and military advisers to Vietnam. Similarly, Johnson inherited this commitment again after Kennedy’s assassination in 1963 however he inherited a much messier situation, as Kennedy had escalated involvement further by sending air support and 12,000 advisers. He left no clear plan to Johnson for his next actions as he privately expressed doubts towards commitment however McNamara, Rusk and Bobby Kennedy said he had intention to withdraw. 
• Failure of Cuba and Laos - As a young, inexperienced President, Kennedy aimed to prove himself by repelling communism in Cuba by defeating Fidel Castro. This was a massive humiliating failure as Kennedy was unable to win, being more significant as Cuba was geographically close to the US. Laos was a partial failure as he had to help due to inherited commitment again, however there were not enough soldiers to send, resulting in a defeat once more as the Laotians used a trail through Vietnam. This highlighted to Kennedy the necessity to intervene in Vietnam and agreed that Asia would be the area for the Cold War battleground.
• Domino theory - Originally invented by Truman, the domino theory was the idea that if one country were to fall to communism, the surrounding countries would, much like a domino falling. As a Catholic, Kennedy disliked communism as it was atheist. A close family friend, Joe McCarthy, also preached McCarthyism, highlighting to Kennedy the dangers of communism and how necessary it would be to stop. 
• Cold war background - After the second world war, Russia and the US emerged as the two superpowers. They were both keen to compete with each other to share their ideologies, Russia being communist and America capitalist. They went to great extents to gain support, giving military aid to smaller countries in exchange for loyalty against the other. Kennedy did not understand Ho Chi Minh was nationalist, rather than communist, and saw him as a Soviet puppet control by Russia. His support for Vietnam against Ho Chi Minh was spurred on by his dislike for Russia and the necessity to stop them from influencing Vietnam towards communism.    
• J: Overall I think the US became involved due to events that had happened previously in history, mainly previously president’s prior commitments and theories. Kennedy was critical of Truman for ‘losing’ China to Communism and did not want to lose Vietnam himself, combined with the need to prove himself as a new president, this shows he was encouraged to intervene by personal interest as well.                                                                          

‘The escalation of the Vietnam War between 1964 and 1968 was due to the optimistic belief that victory was just around the corner.’ 

Explain why you agree or disagree with this view. (24 marks)

• AGREE: Johnson and his administration believed they were genuinely on the way to winning the way in the early years and Johnson wanted to make history by ending the war. Johnson sent combat troops in by 1964 to help the weak Diem regime and further escalated in later years with additional troops.
• DISAGREE: Another reason for escalation was Johnson doubted the safety of the US personnel in Vietnam. Following the bombing of US soldiers in a Saigon bar Johnson was eager to escalate, however this was around Christmas and he did not wish to cause unrest at this time. Later, a further attack was launched on a US airbase near Pleiku, killing 8. This pushed Johnson further towards escalation and Operation Rolling thunder, a three year bombing campaign was launched on North Vietnam. The aim of this was to damage North Vietnamese industry and moral and damage the Ho Chi Minh trail vital for Guerilla success, however industry was not hit as it was mainly rural and moral was undamaged either.
• DISAGREE: After Tet in 1968 Johnson’s confidence in his policies was severely damaged and caused him to re-assess his policies. With over 500,000 troops in Vietnam and the war not any closer to a close, victory did not seem just around the corner any more. The Working Group insisted no more troops were to be sent in, contrary to their previous recommendations and even Johnson’s most hawkish members of congress said “no more troops.”
• DISAGREE: A further reason war was escalated was due to the Gulf of Tonkin incident where the Johnson administration declared there had been two unprovoked attacks on the Maddox and Turner Joy in 1964. This resulted in the Gulf of Tonkin Resolution, a resolution that gave Johnson the power to “take all measures necessary to prevent further communist aggression” and to wage war on Vietnam.
• DISAGREE: Johnson’s public aim was to save Vietnam from communism, however privately he needed to protect national and personal pride of himself. By withdrawing, he would have appeared weak, so by escalating Johnson was following his beliefs of the domino theory and containment as he feared communist aggression. He refused to be “the first president to lose a war” and by escalating further he thought he was avoiding defeat at all costs.
• J: Partly the reason for escalation was Johnson’s belief that victory was just around the corner however other factors played a part because it becomes clear Johnson no longer believes this during the later years of his presidency. His fear for the safety of US personnel in Vietnam and the support of the public and congress in the early stages of the war all contributed to escalation.

Explain why, after the opening of the Paris peace talks in 1965, the Vietnam War did not come to an end until 1975. (12 marks)

• Johnson began peace talks in 1968 by halting Operation Rolling Thunder to get Hanoi to negotiate. Hanoi did not like Johnson’s peace terms so agreements stalled in Paris.
• Hanoi reluctant to accept US terms - the terms Nixon wanted peace by were favourable to the US, not North Vietnam. As Nixon wanted Peace with Honour, this required that Thieu would remain in power in a viable non-communist South Vietnam. Nixon also requested that North Vietnamese troops leave South Vietnam. However, the terms Hanoi wanted were that the  South was taken over as a communist state and South Vietnam soliders left the North. These mutually exclusive arguments continued for 5 years. North Vietnam said they would “sit in the seats until they rot”, they had time on their side and were in no rush to make peace on unfavourable terms.
• Increased bombing - Nixon increased bombing to encourage Hanoi to negotiate but doing this he also widened the war. He began to bomb the trail in Cambodia and Laos in order to cut off enemy supply lines and reassure South Vietnam it was still committed, just less militarily due to Vietnamisation. Hanoi refused to negotiate unless bombing halted.
• Revised peace talks 1970 - In 1970 Nixon changed his terms, offering Hanoi simultaneous withdrawal in return for peace. He hinted the US would be withdrawing soon anyway, leaving Hanoi unimpressed as they thought if Nixon was to withdraw soon anyway, why should they accept peace. Kissinger got Hanoi to agree to an agreement in 1971 but Thieu did not agree to these terms, resulting in Nixon’s rejection of the agreement. 
• Temporary peace - The peace accords reluctantly signed by Thieu in 1973 insisted upon the US leaving Vietnam, prisoners of war to be returned and an election to be held to decide whether or not Vietnam would be unified. However, this halt in the war gave the North time to recover and plot another attack and in 1974 they launched an invasion on South Vietnam. The US were unable to help as Congress had cut spending and Nixon was no longer president and another president did not wish to get involved, resulting in a communist victory over South Vietnam.

‘The reason why the Vietnam war lasted so long after 1968 was the deliberate deception of the American people by Nixon and Kissinger.’ 

Explain why you agree or disagree with this view. (24 marks)

• AGREE: Kissinger thought foreign policy was too complicated for the average American to understand, therefore he never explained his policies in much detail, causing them to be unpopular.
• AGREE: Nixon’s secret bombing on the trail in Cambodia was never revealed to the US public until the media found out and began to report the story. This aroused more antagonism in the US as Nixon had pledged to bring the war to an end during the election. People felt they could no longer trust the president as what him and Kissinger told the public was not what was necessarily true.
• DISAGREE: Another reason the war lasted longer than 1968 was Nixon’s requirement of peace that the US needed to leave Vietnam with Peace with Honour. This required Thieu stayed in government in a viable South Vietnam, a term the North were not happy to accept as they wanted a unified Communist Vietnam. The difficulties in finding mutual peace terms were one of the reasons the war went on so long because neither side were willing to negotiate - Hanoi requested US withdrawal first and the US wanted Hanoi withdrawal first.
• DISAGREE: Nixon’s military methods to get Hanoi to agree to peace were greatly unsuccessful. His bombing campaigns merely antagonised the American public more without having a great effect on Hanoi, his ‘madman tactics’ were somewhat effective but not hugely, bombing of the trail in Cambodia and Laos were both failures as the ARVN were too weak to fight on their own and communist forces quickly drove them out. 
• DISAGREE: China and Russia supported Hanoi and because of this they knew their position was strong to win the war. In order to weaken Hanoi, Nixon had to improve relations with both Russia and China, which he did by capitalising on the Sino-Soviet split during the 1960’s. His visits to China and Russia allowed him to get them to put pressure on Hanoi, but this friendship took time to build.
• DISAGREE: Hanoi had time on their side and were willing to sit in Paris “until the chairs rotted.” Nixon was more eager to make peace as he wanted re-election in 1972, something he thought was almost guaranteed if he were to end the war. He also wanted a place in history books.
• J: Nixon and Kissinger did deceive the public however this did not dramatically affect the time it took them to reach a peace agreement. Other factors such as South Vietnam’s stalling of the peace talks because they knew they could not fight the North alone, combined with Hanoi’s reluctance to accept the US’s terms drew the war out a further 5 years.

Explain why President Kennedy believed that keeping South Vietnam free from Communism was essential for the protection of the USA’s national interests. (12 marks)

• Domino theory - Kennedy believed in Eisenhower’s domino theory, stating that if one country were to fall to communism, the surrounding countries would also fall. Eventually this would lead to communism worldwide, including America. As a capitalist country, America was strongly opposed to communism it went against their traditions and democratic beliefs.
• “World’s policeman” - America acquired the reputation of being the “world’s policemen” and by succeeding in containing communism in Vietnam it was improve US credibility as a superpower and national interest.
• Truman lost China - China and North Korea had already fallen to communism under president Truman, highlighting to Kennedy that the spread of communism was a reality and would challenge democracy in the US.
• Containment - Kennedy was committed to containment in order to protect US economy and safety. The Truman Doctrine stated that the US would aid any country threatened by communism with monetary and military aid to avoid them falling to communism.
• J: Kennedy believed keeping communism out of South Vietnam was essential to protect US national interests as if communism took over in South Vietnam, the neighbouring countries would follow such as Laos and Cambodia, creating a bigger problem of communism spreading which would negatively affect US interests.

‘President Kennedy was not a supporter of US involvement in the war in Vietnam.’

Explain why you agree or disagree with this view. (24 marks)

• AGREE: Reluctant to send troops - Kennedy only sent non-combat military advisers into Vietnam despite requests for ground troops from Westmoreland and McNamara, his secretary of defense, whom he was closely influenced by and the only member of his cabinet to get into his close private circle. Although by the time of his assassination there were 12,000 advisers, Kennedy had rejected sending in combat troops as he was reluctant to escalate the war but was not open to withdrawing completely either.
• DISAGREE: Kennedy was interested in foreign policy and was aware of the importance of Vietnam to the communism problem. He supported Diem’s corrupt and unpopular regime despite later having doubts in him, but praised him as a “miracle man of Asia”. Within the first few days of his presidency, Kennedy send Westmoreland in to help the weak ARVN army, showing his clear involvement in helping Diem’s efforts. 
• AGREE: During 1963, Kennedy began to doubt Catholic Diem’s ability as his policies were extremely anti-Buddhist, causing Kennedy to believe he was waging a religious war against the Buddhist majority, with his sister in law Madame Nhu calling the protests a “Buddhist barbecue”. This shocked Kennedy and led him to stop supporting Diem, but he had to continue aid as he was the only option. 
• AGREE: The new American ambassador Lodge convinced anti-Diem members of Congress to get Kennedy to agree that Diem would be replaced if his corrupt regime did not change. Lodge met with Diem but was beaten by his two hour “merciless monologues”, realising there needed to be a change in leadership of South Vietnam. Because of this, the US did not stop the coup against Diem by ARVN generals thus leading to his assassination in 1963.
• AGREE: Towards the end of his presidency Kennedy had begun to withdraw 1000 military advisers, suggesting he may have been attempting to de-escalate the war if he had lived. However, by not stopping the coup against Diem, Kennedy increased commitment for his successor as they would have to stay in Vietnam long enough for the new Prime Minister of South Vietnam to be chosen and then strengthened against the communists.
• DISAGREE: Kennedy believed in Truman’s policy of containment and the domino theory and was eager to suppress communist aggression to protect US national interest. He believed if South Vietnam were to become communist, the neighbouring countries would also fall leading to US democracy being challenged so viewed US involvement to the war vital.
• J: Overall I think Kennedy supported the war initially as he was supportive of Diem’s regime and feared communist expansion, however the fact that he began to withdraw advisers shortly before his assassination suggests he may have been opposed to the war and beginning to get out. His reluctance to increase involvement with combat troops shows Kennedy was not looking to rush into another cold war battle so was trying to delay involvement as long as he could.

Explain why President Nixon introduced the policy of ‘Vietnamisation’ in 1969. (12 marks)

• Nixon’s policy of Vietnamisation required the withdrawal of US troops in Vietnam but replacing them with ARVN forces aided with US monetary aid. His National Security Advisor Henry Kissinger told Nixon he could still claim a US victory under Vietnamisation if the PAVN defeated the ARVN as it would show they could not defend themselves as they were weak when fighting alone.
• This policy allowed Nixon to start bringing out US troops essential for the home front to support him and feel that the war was drawing to a close. This would counter public opposition at home in the US as protests were growing towards the war by 1969, with the majority of American people against the war now shown by opinion polls. The media had turned against the war who were originally for it, showing a huge change in opinion from this point.
• After the Tet Offensive of 1968, Nixon, Johnson and many of the administration became aware that sending more US men into Vietnam was not bringing them any closer to a victory. The Working Group who had previously urged for escalation changed their minds, now urging towards withdrawal. Even the most hawkish of senators said “no more men.”
• Nixon knew that winning in Vietnam was unlikely and Vietnamisation was another step towards “Peace with Honour”, getting out of the war with dignity so not to damage US national interest.

‘It was military defeat that forced the Americans to withdraw from Vietnam.’

Explain why you agree or disagree with this view. (24 marks)

Explain why President Diem was assassinated in 1963. (12 marks)

• Unpopular with ordinary people - Diem was a corrupt and unpopular leader disliked by many of the Vietnamese public. He had no supports in the North, unlike Ho who had supports in both the North and South, and did not appeal to the ordinary peasants as Ho did. He was reluctant to redistribute land in land reforms which the peasants wanted, as he did take back land to distribute but only the rich could afford to buy it back. He favoured the wealthy landowners and failed to win hearts and minds like Ho Chi Minh did.
• Antagonising policies - many of his policies made it more difficult for the peasants to survive. His strategic hamlets programme designed to provide safety for the Vietnamese aroused antagonism as it required the peasants to move away from their homes, land and ancestor’s graves which was a tradition to the Vietnamese people. Many of the Vietnamese were Buddhist, whereas Diem was a Catholic and his policies always swayed towards favouring Catholics. It seemed Diem was waging a war against the Buddhist majority as he burned Buddhist monasteries and his sister in law, Madame Nhu, called the burning monk protests a ‘Buddhist barbecue.’
• US support - Diem was supported by the US and the Vietnamese were slowly turning against US intervention as it made peasant life harder for them than it was before. Their chemical warfare ruined the countryside with Agent Orange and napalm, causing widespread resentment towards the US. Diem was also prone to giving jobs in his government to only his corrupt family members, causing an issue within his rule.
• US did not stop the coup - The US were beginning to realise in 1963 Diem was not the right man for the job, so Lodge got Kennedy to agree that Diem should be replaced if he did not make changes to improve his regime. When ARVN generals plotted a coup, the US did not do anything to stop the overthrow of Diem despite being fully aware it was happening.
• J: Diem was assassinated due to his underlying unpopularity within South Vietnam which led to widespread resentment and lack of support. The Vietnamese disliked foreigners so Diem’s co-operation with the US was unpopular but ultimately it was the US’s refusal to stop the coup which resulted in his death.

‘The Vietcong gained support in South Vietnam because of the attraction of communism.’

Explain why you agree or disagree with this view. (24 marks)

• AGREE: Communism was attractive to the South as it offered a communal way of working together which appealed to the peasants. As they worked the fields all day, the Vietnamese were used to working together to get jobs done more efficiently. The Vietcong helped plant and dig up their crops, gaining them popularity within the South Vietnamese towns. In exchange for this help, the peasants offered support in the form of food, shelter and hiding, vital for a guerilla victory.
• DISAGREE: Another reason the Vietcong gained support was they were led by Ho Chi Minh, a popular leader who was able to win the hearts and minds of peasants with his popular policies of land reform and determination. The alternative to supporting Ho was Diem, a corrupt leader unpopular within many of South Vietnamese towns. Diem had no support in the North whereas Ho had supporters in the North and South, showing he was a more favourable leader within Vietnam.
• DISAGREE: Ho was nationalist, rather than communist, and his nationalists beliefs outweighed his communist ones. This appeal of nationalism was vital to his support as Vietnam had been fighting for dependence since the French took over Indochina in the 1800s. Since then they had been driven out by the Japanese then the French tried again, leaving Vietnam to resent foreigners and want political independence. 
• DISAGREE: The US supported the Diem regime and were heavily involved in Vietnam. Their unpopular policies of chemical warfare and strategic hamlets caused widespread resentment for the US and Diem as agent orange and napalm ruined the countryside and strategic hamlets required the Vietnamese to have to leave their homes and family’s graves to live elsewhere. Their violent tendencies turned neutral, friendly Vietnamese against them and towards the more appealing regime offered by Ho Chi Minh.
• J: I agree that communism was one of the factors which made the Vietcong gain support as the people liked what they were fighting for, however their opposition to the alternative, Diem, also pushed people towards supporting the Vietcong. The Vietcong were able to infiltrate into the villages of South Vietnam and force them to accept their ideology through propaganda, giving them another edge over the Americans.

Explain why, in the years 1965 to 1967, there was growing opposition inside the USA towards the war in Vietnam. (12 marks)

• Media - During these years the media was growing more and more against the war effort. Previously they had been supportive of the war but views were beginning to change as a result of the seemingly endless war. Being the first televised war, it “brought the war into living rooms” as Fitzgerald said, meaning the public were heavily influenced by what they saw. Johnson found it difficult to censor images so the public saw the violent and cruel acts some of the soldiers were inflicting upon the Vietnamese, making the public consider the psychological effects war had on their soldiers.
• Protests - Protests were growing during these years, especially within universities as anti-war lectures became more frequent and grades dropped in order to protest. Johnson lowered the age of the draft, causing resentment within students who were anti-war. Draft cards were burned and fights broke out, however Johnson assumed he still had the backing of many people and these protesters were merely the minority.
• Growing death counts - more soldiers were being sent into Vietnam but no progress seemed to be made. More body bags returned to the US as they sent all their soldiers back home to be buried, highlighting the number of dead soldiers fighting for a war they either did not agree with or did not understand. 
• Tax - Johnson was reluctant to ask for tax because he did not want to admit how much money US were spending on the war. By the end of 1968, $25 billion had been spent on the war effort. Such a huge amount led to an increase in taxes and inflation, resulting in anger from the public.
• J: The lack of progress made was the biggest reason for opposition to grow, as the results of heightening the war effort to try and win the war led to anger within the American people. Even congress were beginning to change their minds after 1967 and Johnson’s approval rating dropped.

President Johnson escalated the war from 1965 in order to strengthen his negotiating position with the government of North Vietnam.’

Explain why you agree or disagree with this view. (24 marks)

• AGREE: Johnson used bombing in order to force North Vietnam to negotiate peace talks in 1968. Hanoi agreed to peace talks if the bombing halted. Reluctantly, Johnson halted bombing to encourage negotiations and also to make his vice president Humphrey gain popularity as he was the new candidate for Johnson’s party. However, Hanoi and Johnson could not come to an agreement and the loss of the election for Humphrey proved bombing was ineffective. North Vietnam had time on their side.
• DISAGREE: Johnson also escalated the war due to pressure from his advisers, McNamara and Rusk. He inherited Kennedy’s advisers due to having limited knowledge of foreign policy and wanting to honour Kennedy’s legacy, however this meant no new ideas from the hawk advisers. They pushed for escalation, along with the JCS and CIA, reiterating the domino theory and stating US national pride and honour were at stake if he were not to escalate.
• DISAGREE: The safety of US soldiers and personnel was at risk due to bombing of a Saigon bar and attacks at an airbase near Pleiku where 8 US soldiers were killed. These attacks spurred Johnson towards Operation Rolling Thunder, an attempt to damage North Vietnamese industry, morale and the Ho Chi Minh trail. 
• DISAGREE: Johnson wanted to show he was “tough” on communism after being criticised by Republican candidate Barry Goldwater in the 1964 election. Johnson was seen as the ‘peace candidate’ compared to Golderwater, a ‘trigger happy hawk’ who urged for nuclear warfare, winning Johnson the election as he assured right winged votes he would not do anything rash and left wing that “America keeps her word.”
• DISAGREE: Johnson’s administration reported 2 unprovoked attacks on the USS Maddox and the USS Turner Joy by the North whilst on secret spying missions in the Gulf of Tonkin. This resulted in the Gulf of Tonkin Resolution, giving Johnson the power to “take all necessary steps” to “prevent communist aggression” to wage war on Vietnam. Anderson states that Johnson knew the attacks were not for certain, later revealed by the Pentagon Papers, whereas Moise argues they genuinely thought they did happen. Johnson used the resolution to retaliate against supposed attacks against the North Vietnamese.
• DISAGREE: The Saigon regime was corrupt and weak without US intervention, in order to help prevent a communist South Vietnam and comply with the policy of containment, escalation in the form of military aid was necessary to strengthen ARVN forces.
• J: I agree he used escalation as a tool of negotiation against the North in order to pressure them into peace talks, however he also escalated to protect US national interest, his own interest and for the safety of soldiers. 

Explain why President Johnson began the mass bombing of North Vietnam. (12 marks)

• Operation Rolling Thunder was launched in 1965-8 following the Gulf of Tonkin Incident. This was an attack on the USS Maddox and the USS Turner Joy by the North Vietnamese in the Gulf of Tonkin on 4th August 1964 during secret espionage missions undertaken by the US. 4 US soldiers were killed and reports back to the White House called Johnson to seek revenge on the North Vietnamese.
• The Gulf of Tonkin Resolution was a resolution written up in May 1964 giving Johnson the ability to wage war on Vietnam, giving Johnson the power to “take any necessary steps” to “prevent communist aggression”. Previously there had been no reason to pass the resolution in May but now after the Gulf of Tonkin, Congress had a reason to grant Johnson this power. It was to be valid until Congress removed it.
• This then gave Johnson the power to bomb North Vietnam for the first time. One reason he chose to bomb them was to strengthen his power to repel the idea he was “soft” on communism, as Republican candidate Barry Goldwater accused him of this during the 1964 elections.
• He also used bombing to bomb the Ho Chi Minh trail and to cut off supplies from China. The bombings near China were halted in fear of inviting the Chinese towards another war, however bombing of the trail continued to damage moral and industry. Moral was never damaged due to the determination of the communists and industry was mostly rural so this remained stable as well. Johnson was never able to successfully bomb the trail as it contained many branches, went through Laos and Cambodia and had around the clock repair work done to ensure it was never down for long.
• The attack on the US air base in Pleiku launched retaliation bombing as 8 US soldiers were killed.
• Bombing was a cheap and effective way to destroy weak North Vietnam and showed the US’s economic and military strength as North Vietnam was a relatively easy target.
• J: Johnson began mass bombing because he needed to show the North he was determined to win the war and to shock them into showing the level of commitment he was taking by escalating. Before he had used bombing as retaliation sparingly, but now Johnson was determined to show NV he was serious about commitment. He thought bombing would end the war quickly and force North Vietnam to negotiate.

‘In the years 1965 to 1970, the greatest influence on American public opinion towards Vietnam was the My Lai massacre.’

Explain why you agree or disagree with this view. (24 marks)

Explain why the Tet Offensive was launched in 1968. (12 marks)

• The Tet Offensive was launched by the Vietcong and North Vietnamese Army during the Festival of Tet, traditionally and undeclared truce time. The US and ARVN were preparing for the festivities when the North Vietnamese launched a huge simultaneous attack on a number of South Vietnamese cities and Saigon. As the South were unprepared, this gave the North an advantage as they knew if they engaged in a face to face battle normally they would stand no change against the US army.
• One reason for it’s launch was that Ho Chi Minh was getting old and the North Vietnamese wanted to liberate the South before his death. The North hoped that once they invaded the South then the South Vietnamese would join the communists to throw the Americans out, however this never happened, deeming the attempt at liberation a failure. However, the civillians did not rally to the Saigon regime either, proving that South Vietnam could still not be a viable state under a communist attack.
• Another reason is that during this time the anti-war movement back home in the US was heightening. The North hoped that this surprise attack would seriously damage morale both of the soldiers and public back home to put more pressure on Johnson to reach a peace agreement that was favourable to the North Vietnamese. As Johnson was looking for re-election in 1968, this would undermine his chances if he remained unpopular at home.
• Johnson had been telling the US public the war was coming to an end but an event like Tet, the second biggest battle of the war, proved the exact opposite. This highlighted the credibility gap, the difference between what Johnson said was happening in Vietnam and what actually was, and showed he was dishonest in the things he told the American people. This caused them to stop trusting Johnson and lose faith in his ability to end the war.
• J: Overall the Tet offensive was launched to reduce the confidence of Johnson, his administration and the US public and to show how a united North Vietnamese force could impact on South Vietnam. It was a turning point in the war as it showed many that the war was not being won by the US military power and they were fighting a seemingly endless war as the North were still determined and powerful enough to take over the US embassy.

‘In the years 1969 to 1973, President Nixon’s policies towards Southeast Asia showed that he was only interested in a military solution to the Vietnam war.’

Explain why you agree or disagree with this view. (24 marks)

Bonus issues

• A company issues free shares to existing shareholders
• Uses reserves that have built up and capitalising them (turned into permanent share capital)
• NO CASH FLOWS IN OR OUT OF THE COMPANY
• Made to acknowledge that reserves now belong to shareholders
• Capital or revenue reserves can be used, but capital is used first because they have fewer uses overall

Rights issues

• Raises further finance by issuing shares to existing shareholders at a favourable price
• Rights can be sold on stock market

Ordinary shareholders

• Carry voting rights
• Receive dividends (interim and final) - amounts vary depending on profit
• No dividend may be paid if company makes a loss, dividend not carried forward to next year
• In the event of insolvency, ordinary share holders will be paid off last
• Not repayable - company will have finance for the foreseeable future

Preference shareholders

• Carry no voting rights
• Carry a fixed percentage rate of dividend
• Paid in preference to ordinary shareholders but only paid if there is a profit, otherwise are carried into next year
• In the event of insolvency preference shareholders will be paid off first
• Sometimes repayable

Loans

• Money borrowed from lenders such as banks
• Medium to long term basis
• Fixed rate of interest (finance costs)
• Generally repayments are made throughout period of loan
• Lenders require security - if the owner has an asset the loan can be secured to that so it may be sold if repayments are not made

Debentures

• Formal certificates raising long term finance
• Often traded on stock exchange
• Commonly secured against an asset
• Repayments made on the date stated on the debenture
• Fixed rate of interest (finance costs)
• In the event of insolvency, loans and debentures paid off first