Danho
ZIMSEC O Level · 7103/1 · J2005

Commerce Paper 1 June 2005

Questions
40
Time allowed
75 min
Syllabus code
7103/1

Sit this paper online

Questions
40
Pass mark
24
Sit this paper

Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 1

Production
The second stage in the production of goods is
  1. Aconsumption.
  2. Bdistribution.
  3. Cextraction.
  4. Dmanufacturing.

Question 2

Production
In Commerce, goods are usually classified into
  1. Acapital goods and luxury goods.
  2. Bimported goods and home-produced goods.
  3. Cproducer goods and consumer goods.
  4. Draw materials and finished goods.

Question 3

Production
The manufacturer's risks are increased if goods are produced
  1. Aas per orders only.
  2. Bat low production costs.
  3. Cin anticipation of demand.
  4. Don a small scale.

Question 4

Retail trade
In a typical department store, which goods would be stocked on the ground floor?
  1. Acosmetics, foodstuffs and stationery
  2. Bladies and children's fashions
  3. Chousehold linen, curtains and bedding
  4. Dradios, televisions and kitchen equipment

Question 5

Business units
What is the advantage of franchising to the franchisor?
  1. AThe franchisor's business expands in a relatively short time.
  2. BThe franchisor keeps in touch with current changes through research.
  3. CThe franchisor enjoys legal protection from the franchisee.
  4. DThe franchisor retains all the profits from the business.

Question 6

Retail trade

The diagram shows the layout of a supermarket, with black dots marking the areas beside the check-out points.

What products are usually placed in the areas marked with black dots?

  1. Abath soap, oils and salads
  2. Bcigarettes, sweets and chocolates
  3. Cjam, sugar and rice
  4. Dspices, dried fruit and biscuits

Question 7

Retail trade

The diagram shows the layout of a supermarket, with the bread, cakes, take-away and butchery counters along the back wall.

Why are the shelves for bread, cakes, take-aways and butchery located at the back of the supermarket?

  1. AAll these products are perishable in nature.
  2. BIt promotes impulse buying of goods on other shelves.
  3. CIt reduces the problem of shoplifting.
  4. DThey are bulky products which take up a lot of space.

Question 8

Wholesale trade
Which one is a reason for the elimination of the wholesaler?
  1. Athe growth of large-scale retailers
  2. Bthe increased advertising of goods
  3. Cthe increased sale of do-it-yourself (D.I.Y.) products
  4. Dthe promotion of automatic vending machines

Question 9

Wholesale trade
The wholesaler is necessary in the distribution of
  1. Abread.
  2. Bfruit.
  3. Cjewellery.
  4. Dsoap.

Question 10

Business documents
A pro-forma invoice is issued to a customer when
  1. Agoods are sent on consignment.
  2. Bgoods are sold on credit terms.
  3. Cthe goods have been overcharged.
  4. Dthe goods have been undercharged.

Question 11

Business documents
Which list gives the correct order in the use of these business documents?
  1. Aenquiry, order, invoice, statement
  2. Binvoice, statement, enquiry, order
  3. Corder, invoice, statement, enquiry
  4. Dstatement, enquiry, order, invoice

Question 12

International trade
The work of a customs authority is to
  1. Aensure there is efficient radar equipment at ports of entry.
  2. Bkeep a record of people entering and leaving the country.
  3. Cprovide customs and immigration offices.
  4. Dquarantine imported animals for health reasons.

Question 13

Trade
Which feature distinguishes a del credere agent from a forwarding agent? A del credere agent
  1. Aacts as a middleman between the principal and consumer.
  2. Bdelivers goods to his customers.
  3. Csells goods in his own name.
  4. Dworks in connection with international trade.

Question 14

International trade
As a measure of last resort, a country may correct an unfavourable balance of payments through
  1. Aan increase in exports.
  2. Bdevaluation of the local currency.
  3. Cimport substitution.
  4. Dparticipation in international trade fairs.

Question 15

Consumer protection
Which statement is correct about consumer protection through standards associations?
  1. AManufacturers are compelled by law to send their products for testing.
  2. BManufacturers have their products tested for quality.
  3. CProducts that do not have a seal of approval are unfit for human use.
  4. DThe standards associations seek to promote fair trading practices.

Question 16

Business units
Which business organisation's performance is debated annually in parliament?
  1. Amulti-national corporation
  2. Bprivate limited company
  3. Cpublic corporation
  4. Dpublic limited company

Question 17

Business finance
The most suitable source of finance for the day-to-day running of a business is
  1. Aa bank loan.
  2. Ba bank overdraft.
  3. Ca mortgage.
  4. Dventure capital.

Question 18

Business units
What information appears in the memorandum of association?
  1. Aa declaration by the company directors that they have complied with the Companies Act
  2. Ba statement that the required minimum capital for the company has been raised
  3. Cthe rights and duties of the shareholders of the company
  4. Dthe area of economic activity in which the company intends to operate

Question 19

Business finance
The major source of revenue for local government authorities is
  1. Abank overdrafts.
  2. Bgovernment grants.
  3. Crates and rent.
  4. Dtrade credit.

Question 20

Business finance
Why is working capital important to a business?
  1. AIt enables the business to operate without costly borrowing.
  2. BIt records the total profit the business has made.
  3. CIt shows the cash flow of the business.
  4. DIt shows the financial position of the business at a particular time.

Question 21

Business finance
Why would an investor choose to be a debenture-holder instead of being a shareholder in a company?
  1. AHe becomes one of the owners of the company.
  2. BHe can force the company into liquidation if interest is not paid.
  3. CHe is entitled to a dividend from the company profits.
  4. DHe will have voting rights on matters of company policy.

Question 22

Business calculations

The summarised balance sheet of D. Bean as at 31 December 2003 shows Capital $46 000, Long-term loan $40 000 and Creditors $12 000, totalling $98 000; on the assets side Fixed Assets are unknown, with Stock $6 000, Debtors $10 000 and Cash $22 000, also totalling $98 000.

What is the value of fixed assets?

  1. A$38 000
  2. B$46 000
  3. C$60 000
  4. D$98 000

Question 23

Business calculations

The summarised balance sheet of D. Bean as at 31 December 2003 shows Capital $46 000, Long-term loan $40 000 and Creditors $12 000, totalling $98 000; on the assets side Fixed Assets are unknown, with Stock $6 000, Debtors $10 000 and Cash $22 000, also totalling $98 000.

What was D. Bean's working capital as at 31 December 2003?

  1. A$22 000
  2. B$26 000
  3. C$30 000
  4. D$38 000

Question 24

Banking
Which financial institution buys and sells new unsubscribed shares of a limited company?
  1. Abuilding society
  2. Bcommercial bank
  3. Cdiscount house
  4. Dmerchant bank

Question 25

Banking
Who are the members of a clearing house?
  1. Acentral banks
  2. Bcommercial banks
  3. Cmerchant banks
  4. Dinsurance companies

Question 26

Banking
Which service is not usually offered by commercial banks?
  1. Aacting as executors or trustees
  2. Bmaking spot order payments
  3. Coffering investment advice for savers
  4. Dproviding mortgage finance

Question 27

Insurance
The doctrine of subrogation requires that
  1. Aafter full compensation, the damaged property belongs to the insurer.
  2. Ball information relevant to an item being insured must be provided.
  3. Cno risk should be insured with two or more insurance companies.
  4. Dthe insured must only insure property that belongs to them.

Question 28

Insurance
Which is a non-insurable risk for a clothing shop?
  1. Aaccidents to staff
  2. Bbad debts
  3. Cbreakage of windows
  4. Dchanges in tastes

Question 29

Insurance
A retailer's stock is worth $4 million. It is insured for $6 million. Goods worth $1 million are stolen. How much should the insurer pay the retailer?
  1. A$5 million
  2. B$3 million
  3. C$2 million
  4. D$1 million

Question 30

Communications
The communication facility which enables the message to be typed and corrected before it is sent is
  1. Adatel.
  2. Belectronic mail.
  3. Cfacsimile.
  4. Dradio-paging.

Question 31

Communications
What do telecommunication services include?
  1. Adatel, telex and cash on delivery
  2. Bradio-paging, datel and facsimile
  3. Ctelephone, poste restante and telex
  4. Dtelex, confravision and recorded delivery

Question 32

Communications
Which item would a company send by ordinary mail?
  1. Aa crossed cheque in settlement of an account
  2. Ba final demand for an overdue account
  3. Cnew share certificates to shareholders
  4. Dthe company's title deeds being sent to its lawyers

Question 33

Transport
What is an advantage of containerisation?
  1. AGoods are unpacked at ports.
  2. BGoods cannot be damaged.
  3. CGoods are not inspected by customs authorities.
  4. DGoods are loaded and unloaded speedily.

Question 34

Transport
Which ship can be hired?
  1. Acontainer ship
  2. Bliner
  3. Croll-on, roll-off ship
  4. Dtramp

Question 35

Transport
In which case would air transport not be the most suitable to use?
  1. Acomputers from Malaysia to Harare
  2. Bday-old chicks from Harare to Lilongwe (Malawi)
  3. Ccopper from Zambia to Japan
  4. Dbeef from Botswana to London (United Kingdom)

Question 36

Warehousing
Which is an advantage of warehousing?
  1. AIt allows change in prices when there is a change in fashion.
  2. BIt eliminates the risks of fire and theft.
  3. CIt makes goods available when they are wanted.
  4. DIt makes possible the hoarding of basic commodities.

Question 37

Warehousing
Goods are released from a bonded warehouse
  1. Awhen a customs warrant is produced by the importer.
  2. Bwhen rent has been paid to the owner of the warehouse.
  3. Cwhen the blending process is completed.
  4. Dwhen the importer has paid the exporter for the goods.

Question 38

Advertising
Which is a characteristic of collective advertising?
  1. AEach company advertises all its products at the same time.
  2. BIt often results in improved quality of products.
  3. CThe advertisements are financed by a trade association.
  4. DThere is stiff competition among the producers.

Question 39

Advertising
Why would a manufacturer use a trade journal to advertise a new type of computer?
  1. AIt can give detailed information.
  2. BIt enables national coverage.
  3. CIt has a captive audience.
  4. DIt is a cheap medium to use.

Question 40

Marketing
Information from market research is not used to
  1. Adetermine consumer buying patterns.
  2. Bdevelop products which are accepted by consumers.
  3. Cengage in disparaging advertising.
  4. Destablish the activities of competitors.

More sittings of this paper

The answers, and why they are the answers

Sit the paper here to see which ones you got right. Danho explains every question, keeps your score, and works without a connection.

Get it on Google PlayDownload on the App Store