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ZIMSEC O Level · 7103/01 · N2004

Commerce Paper 1 November 2004

Questions
40
Time allowed
75 min
Syllabus code
7103/01

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Questions
40
Pass mark
24
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Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 1

Production
What are the three stages in production?
  1. Aextraction, selling and distribution
  2. Bexporting, manufacturing and wholesaling
  3. Cextraction, construction and manufacturing
  4. Dextraction, manufacturing and distribution

Question 2

Production
What is a disadvantage of direct production?
  1. AIt leads to industrial fatigue.
  2. BIt results in the loss of craftsmanship.
  3. CThe absence of a worker results in bottlenecks.
  4. DThe quantity of goods produced is low.

Question 3

Trade
Primary products such as coffee are distributed through
  1. Acommodity markets
  2. Bconsumer markets
  3. Clocal wholesale markets
  4. Dstock exchange markets

Question 4

Retail trade
In which trading outlet do members elect a management committee?
  1. Aco-operative retail society
  2. Bdiscount store
  3. Chypermarket
  4. Dmultiple shop

Question 5

Business finance
A customer buys a motor vehicle on hire purchase from a car dealer and the instalments must be paid over 24 months. Who is the legal owner of the vehicle during this time?
  1. Athe customer
  2. Bthe car dealer
  3. Cthe finance company
  4. Dthe insurance company

Question 6

Retail trade
Which retail outlet would be most affected by an increase in wages for shop assistants?
  1. Adepartment stores
  2. Bmail order firms
  3. Cmobile shops
  4. Dsupermarkets

Question 7

Wholesale trade
Which commodity would normally be distributed through the wholesaler?
  1. Abeer
  2. Bbread
  3. Cmilk
  4. Dnewspapers

Question 8

Marketing boards
How does the Grain Marketing Board (GMB) help maize farmers in Zimbabwe?
  1. Afixes quantities to be grown
  2. Bprovides tillage for farmers
  3. Cpurchases the harvested crop
  4. Dtransports the crop from farms

Question 9

Business documents
Which document may serve the same purpose as a quotation?
  1. Aadvice note
  2. Bbill of exchange
  3. Cdebit note
  4. Dproforma invoice

Question 10

Business documents
The terms given on a customer's invoice read: 30 days - 5%; 60 days - 2.5%. The invoice total is $50 000. How much will the customer pay if he settles the account 20 days from the date of the invoice?
  1. A$2 500
  2. B$47 500
  3. C$48 750
  4. D$50 000

Question 11

International trade
Which statement describes entrepôt trade?
  1. Athe importation of duty-free goods
  2. Bthe importation of goods which have been previously exported
  3. Cthe re-exportation of imported goods
  4. Dthe sale of goods abroad more cheaply than at home

Question 12

International trade
A tax charged on goods produced and consumed within the country is known as
  1. Aad valorem duty.
  2. Bexcise duty.
  3. Cimport duty.
  4. Dsales tax.

Question 13

International trade
Which document enables goods to be correctly classified for the purpose of assessing customs duties?
  1. Abill of exchange
  2. Bbill of lading
  3. Cconsular invoice
  4. Dproforma invoice

Question 14

Consumer protection
Products which bear the Standards Association of Zimbabwe (SAZ) mark
  1. Aare of a better quality than those without the mark.
  2. Bare of good quality.
  3. Cshould be sold at the controlled price.
  4. Dwill go bad if not used by the expiry date.

Question 15

Consumer protection
What measures should the manufacturer of a dangerous insecticide take to protect the consumer?
  1. Aadvertise the insecticide in the national media
  2. Bdemonstrate the use of the product
  3. Cinform wholesalers about its safe use
  4. Dinsert a warning label on the container

Question 16

Business finance
The most common method for financing local government enterprises is through
  1. Aborrowing from the International Monetary Fund.
  2. Bcharging rates on residents' properties.
  3. Cselling shares to the general public.
  4. Dthe factoring of debts.

Question 17

Business units
Public corporations
  1. Aallocate dividends to shareholders.
  2. Bare formed by an Act of Parliament.
  3. Care run by elected boards of directors.
  4. Draise capital through the sale of shares.

Question 18

Business units
The voting rights of shareholders in a company are stated in the
  1. Aarticles of association.
  2. Bcertificate of incorporation.
  3. Cmemorandum of association.
  4. Dstatutory declaration.

Question 19

Stock exchange
Which is not a function of the Zimbabwe Stock Exchange (ZSE)?
  1. Adeciding on the listing and de-listing of companies
  2. Benforcing a code of conduct for members
  3. Cfixing the daily prices of shares and debentures
  4. Dinvestigating complaints from members of the public

Question 20

Business calculations

The trading figures of J. Jack are:

Sales $100 000
Cost of goods sold $40 000
Sales returns $10 000
Cost of average stock $30 000

What was J. Jack's gross profit?

  1. A$50 000
  2. B$60 000
  3. C$70 000
  4. D$90 000

Question 21

Business calculations

The trading figures of J. Jack are:

Sales $100 000
Cost of goods sold $40 000
Sales returns $10 000
Cost of average stock $30 000

What was J. Jack's rate of turnover?

  1. A3,3 times
  2. B3,0 times
  3. C2,5 times
  4. D1,3 times

Question 22

Banking

A specimen cheque drawn on Standard Chartered Bank by A. Axle, payable to Jim Cobra for $55 000,00 and dated 10 August 2002, carries a crossing marked "BARCLAYS BANK".

What does the crossing mean?

  1. AThe cheque must be cashed at Barclays Bank.
  2. BThe cheque was endorsed to Barclays Bank.
  3. CThe cheque was drawn by an account holder of Barclays Bank.
  4. DThe cheque must be paid into an account at Barclays Bank.

Question 23

Banking

A specimen cheque drawn on Standard Chartered Bank by A. Axle, payable to Jim Cobra for $55 000,00 and dated 10 August 2002, carries a crossing marked "BARCLAYS BANK".

Who is the drawee?

  1. ABarclays Bank
  2. BStandard Chartered Bank
  3. CA. Axle
  4. DJim Cobra

Question 24

Money
Which of the following is legal tender?
  1. Abank notes
  2. Bcheques
  3. Cmoney orders
  4. Dpostal orders

Question 25

Banking
The difference between a current account and a deposit account is that the current account
  1. Aallows cash withdrawals on demand.
  2. Bdoes not earn any interest.
  3. Cmakes use of a savings passbook.
  4. Drequires notice of withdrawal.

Question 26

Insurance
What risk does a consequential loss insurance policy cover?
  1. Aaccidental injury of customers on the trader's premises
  2. Binjury of employees at work due to the employer's negligence
  3. Cmisappropriation of funds by the firm's cashiers
  4. Drents not received due to the occurrence of an insured risk

Question 27

Insurance
Which statement explains the doctrine of proximate cause?
  1. ABoth parties to an insurance contract must be honest.
  2. BThe insured must suffer a loss in the event of the risk occurring.
  3. COne is restored to the position he was in immediately before the loss occurred.
  4. DTo get payment for a claim, the cause of the loss must be the one insured against.

Question 28

Insurance
In which property would a businessperson have insurable interest?
  1. Aa warehouse that he rents for the storage of stock
  2. Bhis house which is located in the high density suburb
  3. Cthe land next to the shop that he hopes to buy next year
  4. Dthe motor vehicles owned by his best customer

Question 29

Insurance
Household contents valued at $250 000 were insured for $200 000 against the risk of fire. How much compensation will the insured receive if fire later damaged contents worth $150 000?
  1. A$120 000
  2. B$150 000
  3. C$200 000
  4. D$250 000

Question 30

Communications
Which postal service would a retail outlet use to send monthly statements of account to its many customers?
  1. Aexpress post
  2. Bfranked letter post
  3. Cposte restante
  4. Drecorded delivery

Question 31

Communications
Which list contains telecommunication services only?
  1. Acellphone, confravision and freepost
  2. Bconfravision, e-mail and recorded delivery
  3. Cdatel, facsimile and radiopaging
  4. Dposte restante, telephone and telex

Question 32

Communications
A trader wants people to respond to a survey without them having to pay the postage costs. What service should the trader use?
  1. Abusiness reply
  2. Bcash on delivery
  3. Cprivate mail bag
  4. Dregistered letters

Question 33

Communications
What is the advantage of using a private post office box instead of a private bag?
  1. AOnly mail belonging to that number is placed into it.
  2. BMail can be collected at any time of day.
  3. CRegistered articles can be received safely through it.
  4. DThe owner uses a personal key to open it, which makes it safe.

Question 34

Transport
Which is not a responsibility of a sea-port authority?
  1. Adredging the harbour
  2. Bmaintaining dry docks
  3. Cproviding unloading equipment
  4. Dsupervising bonded warehouses

Question 35

Transport
Which set of factors influences the choice of hired transport for the movement of goods?
  1. Adistance, freight charges, vehicle maintenance costs
  2. Bfreight charges, speed of delivery, vehicle maintenance costs
  3. Cspeed of delivery, freight charges, distance
  4. Dvehicle maintenance costs, speed of delivery, distance

Question 36

Transport
Why would a trader prefer to use rail instead of road transport for the carriage of goods?
  1. ARail transport is more flexible.
  2. BRail transport is not delayed at depots.
  3. CRail transport is cheaper over long distances.
  4. DRail transport involves less handling of goods.

Question 37

Warehousing
The use of warehouses in the chain of distribution
  1. Aenables the breaking of bulk.
  2. Bprovides space to display goods.
  3. Creduces the chain of distribution.
  4. Dreduces the risk of theft.

Question 38

Warehousing
In what way do bonded warehouses help the importer to save on working capital?
  1. AGoods are branded but not manufactured.
  2. BGoods are removed in small lots.
  3. CGoods are supervised by customs authorities.
  4. DGoods can be left to mature.

Question 39

Advertising
Controls on advertising are imposed by
  1. Athe Sale of Goods Act.
  2. Bthe Standards Association of Zimbabwe.
  3. Cthe Code of Advertising Practice.
  4. Dthe Consumer Council of Zimbabwe.

Question 40

Advertising
Why may an advertiser choose to use a magazine instead of television to advertise a product?
  1. AAdvertisements may be in colour.
  2. BDemonstrations on how the product works are possible.
  3. CIt has low cost per exposure.
  4. DRepeat advertisements are possible.

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