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ZIMSEC O Level · 7103/01 · N2005

Commerce Paper 1 November 2005

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 of production?
  1. Amanufacturing, distribution and selling
  2. Bmanufacturing, exporting and importing
  3. Cmanufacturing, extraction and distribution
  4. Dmanufacturing, wholesaling and retailing

Question 2

Production
Which one is a result of specialisation?
  1. Acomplete products made by one worker
  2. Bhigher costs of production
  3. Chigher levels of production
  4. Dproducts made to individual orders

Question 3

Retail trade
The self-service system of retailing has expanded as a result of
  1. Aadvertising.
  2. Bafter sales service.
  3. Cdelivery service.
  4. Dprepackaging.

Question 4

Business finance
When making hire-purchase transactions, which of the following is used?
  1. Aa building society
  2. Ba commercial bank
  3. Ca discount house
  4. Da finance company

Question 5

Retail trade
What is a multiple chain?
  1. Aa group of retailers buying from several wholesalers
  2. Ba large self-service store selling a variety of goods
  3. Ca large retailer with many branches selling one line of goods
  4. Da wholesaler selling to many small retailers

Question 6

Marketing
A producer can best distinguish his goods from those of competitors by giving them
  1. Aan expiry date.
  2. Ba guarantee.
  3. Ca product brand.
  4. Da special price.

Question 7

Wholesale trade
A wholesaler is most likely to be used when
  1. Aa retailer operates on a small scale.
  2. Bgoods are fragile.
  3. Cgoods are large and expensive.
  4. Dlarge retailers make big orders.

Question 8

Business documents
What document does a buyer use to find out the terms offered by a supplier?
  1. Aa credit note
  2. Ba letter of inquiry
  3. Can order
  4. Da quotation

Question 9

Business documents
When goods have been overcharged, a supplier will issue
  1. Aan advice note.
  2. Ba credit note.
  3. Ca debit note.
  4. Da proforma invoice.

Question 10

Business calculations
Mrs Saizile bought goods at $40 000 less 30% trade discount. She paid promptly and received a cash discount of 3%. How much did she pay for the goods?
  1. A$12 000
  2. B$12 840
  3. C$26 800
  4. D$27 160

Question 11

International trade
What is a bill of exchange?
  1. Aa document giving final clearance of goods imported
  2. Ba document transferring the title of goods to another person
  3. Ca promise to pay a certain sum of money at a future date
  4. Da receipt provided by a shipping company

Question 12

International trade
Which one is a difficulty faced by an exporter?
  1. Acalculating the balance of payments
  2. Bcollection of customs duties
  3. Cdelays in receiving payment
  4. Dobtaining travel documents

Question 13

International trade
A trader has paid duty on some imported goods. If these goods are re-exported, the trader may obtain
  1. Aa refund of poundage.
  2. Bcustoms drawback.
  3. Cexcise duties.
  4. Dwarehouse charges.

Question 14

International trade

The graph shows the values of exports and imports for a country during the period 1997 to 2001.

During which year did this country's exports and imports balance?

  1. A1997
  2. B1998
  3. C1999
  4. D2000

Question 15

International trade

The graph shows the values of exports and imports for a country during the period 1997 to 2001.

What is the balance of payments for this country at the end of 2001?

  1. A-$75 million
  2. B+$125 million
  3. C+$200 million
  4. D-$325 million

Question 16

Business units
In a general partnership, all members
  1. Aare shareholders.
  2. Bare sleeping partners.
  3. Chave limited liability.
  4. Dhave unlimited liability.

Question 17

Business units
The surplus funds of a retail co-operative society are divided in proportion to the
  1. Aamount of purchases each member has made.
  2. Bcapital each member has contributed.
  3. Cnumber of shares held by each member.
  4. Dwork done by each member in the business.

Question 18

Business calculations
Which of the following is likely to have the highest rate of stock turn?
  1. Aa bakery outlet
  2. Ban electrical goods shop
  3. Ca furniture outlet
  4. Da jeweller's shop

Question 19

Business finance
Which item forms part of a farmer's fixed assets?
  1. Acash
  2. Bcattle feed
  3. Cfertiliser
  4. Dtractor

Question 20

Banking
A cheque is endorsed when
  1. Acash is to be paid on the cheque.
  2. Bit has been marked "Refer to drawer".
  3. Cit is to be paid into the payee's account.
  4. Dit has to be passed on to another person by the payee.

Question 21

Banking
A bank allows a customer to withdraw more money than is in the customer's account. What is this called?
  1. Abank draft
  2. Bbank loan
  3. Cbank overdraft
  4. Dbank transfer

Question 22

Banking
A retailer with a bank current account wishes to make monthly payments to a traders' association. Which method of payment would be most suitable to use?
  1. Abank notes
  2. Bcredit transfer
  3. Cmoney order
  4. Dstanding order

Question 23

Banking
Which of the following is not a function of the Reserve Bank of Zimbabwe?
  1. AIt clears inter-bank cheques for commercial banks.
  2. BIt is the government's bank.
  3. CIt keeps the country's gold and foreign currency reserves.
  4. DIt operates the country's foreign exchange control.

Question 24

Banking

What services are offered by commercial banks?

(i) overdrafts
(ii) mortgages
(iii) savings accounts

  1. A(i) and (ii)
  2. B(i) and (iii)
  3. C(ii) and (iii)
  4. D(i), (ii) and (iii)

Question 25

Insurance
Mr Sikhanya rents a shop and insures the goods only. Which principle of insurance prevents him from insuring the shop building as well?
  1. Aindemnity
  2. Binsurable interest
  3. Cproximate cause
  4. Dutmost good faith

Question 26

Insurance
What is the function of an insurance broker?
  1. Ato accept insurance risks
  2. Bto act as the principal for underwriters
  3. Cto find clients for insurance companies
  4. Dto calculate risks and premiums

Question 27

Insurance
An insured vehicle is written off after an accident. According to the principle of indemnity, the insurance company pays compensation and
  1. Abuys the damaged vehicle from its owner.
  2. Bpays the policy holder money to repair the vehicle.
  3. Cpurchases a new vehicle for the policy holder.
  4. Dtakes possession of the damaged vehicle.

Question 28

Insurance
Mr Shoko insures his vehicle worth $9 million with Company A for $10 million and with Company B for $12 million. His car is stolen and never recovered. How much compensation will he receive?
  1. A$9 million
  2. B$11 million
  3. C$19 million
  4. D$22 million

Question 29

Communications
Which service would be used by a salesperson staying in a place away from his station?
  1. Abusiness reply
  2. Bposte restante
  3. Cprivate bag
  4. Dregistered mail

Question 30

Communications
A manufacturer needs to order spare parts urgently. Which communication service is most suitable?
  1. Aairmail
  2. Bfacsimile
  3. Cletter post
  4. Dtelegram

Question 31

Transport
A trader hires a ship with its crew for the transportation of commodities from Beira to Malaysia. What is the agreement with the shipowner called?
  1. Abill of lading
  2. Bdemise charter
  3. Ctime charter
  4. Dvoyage charter

Question 32

Transport
A consignee who fails to unload a ship within the agreed number of days is required to pay
  1. Ademurrage.
  2. Bfreight charges.
  3. Cpenalty fees.
  4. Drebate.

Question 33

Transport
Which of the following is not the responsibility of a port authority?
  1. Acollecting customs duties
  2. Bdredging the harbour
  3. Cmaintaining dry docks
  4. Dproviding re-fuelling facilities

Question 34

Transport

Which of the following do bulk carriers normally carry?

(i) Fertiliser
(ii) ore
(iii) oil

  1. A(i) and (ii)
  2. B(i) and (iii)
  3. C(ii) and (iii)
  4. D(i), (ii) and (iii)

Question 35

Warehousing
What is a function of warehousing?
  1. Ato allow production to take place ahead of demand
  2. Bto allow retailers to obtain goods on credit
  3. Cto assist wholesalers to sell their goods in time
  4. Dto ensure market outlets for producers

Question 36

Warehousing
Bonded warehouses
  1. Aare always located at border posts.
  2. Bare controlled by customs authorities.
  3. Care owned by the government.
  4. Dstore all goods that are imported.

Question 37

Warehousing
Which process is not carried out in a bonded warehouse?
  1. Ablending
  2. Bbottling
  3. Cbranding
  4. Dmanufacturing

Question 38

Advertising
When sellers of similar products advertise their goods jointly, this is
  1. Acollective advertising.
  2. Bcompetitive advertising.
  3. Cinformative advertising.
  4. Dpersuasive advertising.

Question 39

Consumer protection
Misleading advertisements have led to the growth of
  1. Aadvertising agencies.
  2. Bconsumer protection.
  3. Cmarket research.
  4. Dstandards control.

Question 40

Advertising
Which advertising medium would a tractor manufacturer use to give detailed information to a farmer?
  1. Aposters
  2. Bradio
  3. Ctelevision
  4. Dtrade journal

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