BEDFORDVIEW PRIMARY SCHOOL

JUNE EXAMINATION - 2017

ECONOMIC MANAGMENT SCIENCES

TOTAL MARK: 75 DATE: 9 June 2017

MEMO
Section A: Short questions

Question 1

Complete the following statements by supplying the correct missing word in each
of the statements:

1.1. If people planned their expenditure more carefully by drawing up a budget,

they might find that they could afford to save more.

1.2. Bank statements are documents sent by the bank monthly to show the
record that the bank has of the money that they have received and paid out
of the account.

1.3. A business makes a profit when the income is more than the expenses.

1.4. Informal businesses do not pay tax, which means that the government does
not get any money from them.

1.5. The costs to run a business are known as operational/ running costs.

1.6. If a country has produced more goods and services than it did in the previous
year we call this economic growth.

1.7. Production/ Manufacturing/ Making is the process of taking raw materials

and transforming them into useful goods and services.

1.8. A consumer/ customer buys and uses goods and services.

1.9. The problem of unlimited wants and limited resources is called the economic
problem.

1.10. The total value of all the goods and services that the country produces
over a specific period is called the GDP / ( Gross domestic product).

(10)
Question 2:

State if the following statements are true or false:

2.1 A promissory note is a piece of paper on which one person writes a promise
to pay the other person a certain sum of money at some time in the future.
True

2.2 When people barter, they exchange goods for money

False

2.3 Public goods are the things that the government provides which everyone in
the community uses, for example a park or a library
True

2.4 A business that buys goods in large quantities from manufacturers and then
sells the goods to other shops or customers in smaller quantities is known as
a retailer
False

2.5 The net worth of a business is the amount of money that the owner invests in
the business at the start.
False

2.6 Net worth of a person = assets – liabilities

True

2.7 Ill health and people staying away from work decreases productivity
True

2.8 A deficit is when your cash receipts are greater than your payments
False
 2.9 The people that you plan to sell your product or service to is known as your
target market.
True

2.10 The four factors of production are land, labour, capital and
entrepreneurship.
True

(10)

Question 3: Choose the most correct answer for each of the questions below:

3.1 Rent paid by a business is classified as:

A an asset account

B a balance sheet account

C an expense account

D an income account

3.2 Bank balances, investments, trading stock and policies are examples of

A Fixed / non- current assets

B long-term liabilities

C current liabilities

D current assets

3.3 Is not an example of a financial record :

A payslip

B ATM slip

C change

D credit note
3.4 A portion of your monthly earnings are invested and when you retire, the fund
pays you a monthly income.

A shares

B pension

C rental

D savings

3.5 The minimum income needed to meet a person’s basic needs is

A the poverty cycle

B the bread price line

C the poverty line

D the social acceptance scale (5)

Section B: The economy

Question 4:

4.1 Complete the following table, by deciding if these items possess the four
characteristics of money. Indicate yes, no or yes but difficult

Is the item Is the item Is the item Can the item

relatively durable? portable? be divided into
scarce? smaller units?
Gold Yes Yes Yes but Yes, but
difficult difficult
Coins and Yes Yes Yes Yes
notes

(4)

4.2 Banks serve as vital institutions in our day to day lives. List any 6 services
offered by banks. (6)

* bank balances/ * statements\* wills, * retirement planning/* opening and

closing accounts/* internet and cell phone banking/*Foreign exchange/*
loans/*financial planning, payment to third parties ANY 6
Section C: Financial literacy
Question 5:

Choose the most suitable match. Write down only the letter in the corresponding
space.

1. Assets A When money is put aside for the

future

2. Capital B The total debts that the business

has to pay back

3. Fixed deposit C Planning how much money you

will have in the future

4. Bank D The money or assets invested in

the business by the owner
5. Budgets E Money that is earned by the
business for providing a service

6. Savings F A savings account where you can

withdraw money whenever you
need to

7. Liability G The possessions that are valuable

to the business

8. Call account H Money earned and paid to the

employees of the business

9. Loan: FNB bank I The cost of borrowing money

10. Current income J An investment made in order to

earn a fixed interest rate

11. Salaries and wages K An account opened by the

business to deposit and withdraw
money

12. Interest on loan L Money that the business has

borrowed from a financial
institution

1. ___G____ 2. ____D___ 3. ____J___ 4. ___F__ 5. ___C__ 6. __A_____

 7. ___B____ 8. ___K____ 9. ____L__ 10. ___E___ 11. __H___ 12. __I____

(12)

Question 6:

Home Fixers has the following information in their financial records. Use the
information to answer the questions that follow:

Advertising costs 2 000

Bank 17 000
Start- up Capital 56 000
Current income 50 000
Water and electricity 2 000
Equipment 40 000
Loan 130 000
Material costs 20 500
Rent income 3 500
Telephone 1 500
Vehicles 155 000
Wages 00

6.1Name the three assets that home Fixers have (3)

EQUIPMENT,
BANK
VEHICLES

6.2 Calculate the total value of these assets (2)

ADDING OF ALL ASSET TOTALS : R 212 000

6.3 Does this business have any liabilities? If so, how much does the business
owe? (2)

YES, A LOAN OF R 130 000

6.4 Name two income accounts (2)

CURRENT INCOME RENT INCOME
 6.5 Calculate the total income that the business has earned (2)
R 53 500

6.6 Make a list of expenses and calculate the total expenses (2)
TELEPHONE R1500, MATERIAL COSTS 20 500, WATER AND
ELECTRICITY R2000, ADVERTISING R2000
TOTAL EXPENSE is R26 000

6.7 Did home Fixers make a profit or a loss?

. Give a reason for your answer. (2)

A PROFIT
Assets are more than expenses/
INCOME- EXPENSES= R 27 500/(+amount )

6.8 How much is the business worth? Show the calculation to support your
answer. (3)

NET WORTH = A- L
R212 000- 156 000
The business is Worth R56 000.

Section D: Entrepreneurship
Question 7:

Choose the most suitable match. Write down only the letter in the space provided.
7.1

1. An advantage of an informal A A business that makes a profit

business from buying and selling of goods

2. An informal business B Because they do not pay taxes,

the government does not get any
money from them to provide
goods and services in the
economy

3. A micro-enterprise C A small informal business

4. A SSME D A business that employs hundreds

of people and sells goods and
services on a large scale
5. A large business E A business that is not taxed or
monitored in any way by any form
of government

6. A formal business F They offer an opportunity for

unskilled, uneducated, disabled
and unemployed people to earn
an income when there are no job
opportunities

7. A trading business G Very little capital is invested in the

business and generally the
business does not own the land or
pay rent for it

8. A manufacturing business H A term given to small, medium

and micro-businesses

9. A disadvantage of an informal I A business that makes a profit by

business selling goods that it has made

10. A characteristic of an informal J A business that has registered for

business tax and keeps accurate
accounting records

1. ___F____ 2. ___E____ 3. ____C___ 4. ___H____ 5. ___D____ 6. ___J____

7. ___A____ 8. ___I____ 9. __B_____ 10. ___G____ (10)