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ZIMSEC O Level · 7103/02 · N2005

Commerce Paper 2 November 2005

Questions
18
Total marks
180
Time allowed
120 min
Syllabus code
7103/02

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Questions
18
Pass mark
11
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Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 101

[1 marks]Production and communication
Indirect production occurs when...
  1. AServices such as teaching or nursing are provided directly to members of the public for a fee
  2. BPeople produce solely for their own consumption, e.g. subsistence farming
  3. CRaw materials are extracted directly from the earth without any further processing, e.g. mining or quarrying
  4. DPeople produce a surplus for sale to others, e.g. commercial farming or factory production

Question 102

[1 marks]Production and communication
How is a sugar manufacturer assisted by communication?
  1. ABy insuring the sugar crop against loss from fire, theft, drought or flood damage during the season
  2. BBy providing overdrafts and loans that finance the sugar production process from planting to harvest
  3. CBy enabling contact with buyers and suppliers, and the sending/receiving of orders and payments
  4. DBy physically transporting the harvested sugar crop from the farm to the mill and then to market

Question 201

[1 marks]Retailing and the sole trader
Which of the following is a characteristic of a supermarket?
  1. AIt sells goods mainly on credit terms to known and trusted regular customers of long standing
  2. BIt offers free home delivery of all the goods that a customer purchases in a single visit
  3. CIt stocks only a narrow, specialised range of high-value branded goods
  4. DIt is a large, self-service shop with several check-out points and low prices

Question 202

[1 marks]Retailing and the sole trader
Which measure can a sole trader take to survive competition from large retailers?
  1. ACentralising accounting and buying across many different branches of the business
  2. BOffering personal service, credit to trustworthy customers, and long opening hours
  3. CBuilding large warehouses in order to buy and store goods in bulk quantities
  4. DRestricting the range of goods sold to a single, nationally advertised branded line

Question 301

[1 marks]Marketing boards and wholesaling
Which of the following is a function of the Grain Marketing Board (GMB)?
  1. ABuying grain from farmers, grading it, and providing storage in silos
  2. BPrinting and issuing the country's bank notes and coins for general circulation
  3. CSetting the exchange rate for currency used to import grain
  4. DInsuring farmers' grain crops against the risk of fire while still in the field

Question 302

[1 marks]Marketing boards and wholesaling
Which of the following is a service a wholesaler offers to retailers?
  1. ABreaking bulk, storage of goods, and giving credit
  2. BSetting national customs duty rates on imported goods
  3. CIssuing memoranda of association to new companies
  4. DRegulating the country's money supply

Question 401

[1 marks]International trade
Which trade restriction involves government limiting the quantity of a good that may be imported?
  1. AA credit transfer
  2. BA quota
  3. CA consular invoice
  4. DA bill of lading

Question 402

[1 marks]International trade
Why is international trade important to Zimbabwe?
  1. AIt removes the need for the country to maintain its own separate local currency
  2. BIt allows the country to obtain goods it cannot produce and to earn foreign currency
  3. CIt guarantees that Zimbabwe will never run a balance of payments deficit with any trading partner
  4. DIt eliminates all competition faced by local manufacturers from cheaper imported goods

Question 501

[1 marks]Private limited companies
In a private limited company, how are profits distributed to owners?
  1. AAs dividends, paid only when declared by the directors
  2. BAs interest paid automatically every month
  3. CAs a fixed weekly wage paid to all shareholders
  4. DEqually among all employees regardless of shares held

Question 502

[1 marks]Private limited companies
How is a private limited company controlled?
  1. ADirectly by all shareholders voting on every single business decision
  2. BBy the Registrar of Companies, who personally manages the company's day-to-day operations
  3. CBy a single sole proprietor who personally owns all of the company's issued share capital
  4. DBy directors elected by shareholders, who report back at least once a year at the AGM

Question 601

[1 marks]Banking and cheques
What is a credit transfer?
  1. AA bank loan repaid in regular fixed instalments over a long period at fixed interest
  2. BA document confirming that goods have been loaded onto a ship bound for export
  3. CA facility for a current account holder to pay funds directly into a payee's account
  4. DA cheque that has been crossed twice so that it cannot be cashed over the counter

Question 602

[1 marks]Banking and cheques
Which of the following would cause a bank to dishonour a cheque?
  1. AThe drawer's signature exactly matches the specimen signature held on file at the bank
  2. BThe cheque was crossed twice by the drawer before being posted to the payee
  3. CThe words and figures on the cheque are different, or there are insufficient funds
  4. DThe cheque was deposited directly into the payee's own registered bank account

Question 701

[1 marks]Insurance procedure and terms
What is fidelity guarantee insurance?
  1. ACover taken out by a bank against a bill of exchange being dishonoured and left unpaid at maturity
  2. BCover taken out by a business owner against injury to members of the public visiting the premises
  3. CCover taken out against the loss of profit and fixed expenses following a serious fire on the premises
  4. DCover taken out by an employer against personal dishonesty (e.g. theft) by employees in positions of trust

Question 702

[1 marks]Insurance procedure and terms
What is public liability insurance?
  1. ACover taken out by a business owner against injury or death to members of the public caused by the owner's negligence
  2. BCover taken out by an employer against dishonesty or theft committed by employees in positions of trust
  3. CCover taken out against the theft of a business's own trading stock from its locked premises
  4. DCover taken out by one insurance company against another insurer's own underwriting losses and claims

Question 801

[1 marks]Choice of transport and communication services
Which mode of transport is most suitable for carrying day-old chicks over a long distance, such as from Harare to Cape Town?
  1. ARoad transport, because it is cheapest and fastest over short distances
  2. BAir transport, because it is fast and the chicks are perishable and light
  3. CRail transport, because it is the cheapest for bulky, low-value goods
  4. DSea transport, because it is safest for inflammable fluids

Question 802

[1 marks]Choice of transport and communication services
What is 'business reply' as a postal service?
  1. AA service holding mail at a post office for a travelling salesperson who has no fixed address to give
  2. BA service allowing a registered business customer to withdraw cash from an ATM at any time of day or night
  3. CA service transmitting typed business information by computer over a telephone circuit or modem line
  4. DA licensed service allowing customers to reply to a business free of charge, postage paid by the licensee

Question 901

[1 marks]Advertising, packaging and consumer protection
What is a benefit of pre-packaging to consumers?
  1. AIt always makes goods significantly cheaper for the manufacturer to produce and package
  2. BIt removes the need for any advertising or branding of the packaged product
  3. CIt keeps goods clean, prevents breakages, and makes them easier to identify and handle
  4. DIt guarantees that the goods inside will never go out of date or spoil

Question 902

[1 marks]Advertising, packaging and consumer protection
How does the Consumer Council of Zimbabwe (CCZ) protect consumers?
  1. ABy investigating consumer complaints, arbitrating on their behalf, and recommending protective legislation
  2. BBy setting and legally enforcing the maximum prices that retailers may charge for all consumer goods
  3. CBy collecting customs duty on all consumer goods that are imported into the country
  4. DBy manufacturing consumer goods directly so as to compete on price with private companies

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