YEAR END EXAMINATION – OCTOBER 2017

YEAR 10

COMMERCE (7100)

PAPER 1 MULTIPLE CHOICE (2 hours)

READ THESE INSTRUCTIONS FIRST

Write your name and class on the spaces provided.

Answer ALL questions.

The businesses described in the Question Paper are entirely fictitious.

At the end of the examination fasten all your work securely together.

The number of marks is given in brackets [ ] at the end of each question or part question.

This Question Paper consists of 12 printed pages.

NAME: _______________________________________________________________________

CLASS: ______________________________________________________________________

MARKS

/100

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 SECTION 1: (30MARKS)
MULTIPLE CHOICE QUESTIONS

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1. What is trade?
A buying and selling goods and services for profit
B changing natural resources into usable goods
C producing and distributing goods and services
D providing consumers with goods and services

2. What is the main purpose of production?

A to increase exports
B to provide employment
C to satisfy human wants
D to use factors of production

3. Nasir and his three partners intend to sell DVDs on the Internet and to deliver them
by post. Each partner will specialise in one area of the business as shown below:

Which task, shown as X, is likely to be undertaken by Partner 4?

A advertising and website design
B driving a delivery van
C managing a retail shop
D supervising the workforce

4. What is the main advantage of specialisation in production?

A complete products made by one worker
B greater output
C higher costs of production
D products made to individual orders

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5. What name describes people who distribute raw materials and finished goods?
A commercial workers
B direct service employees
C factory workers
D primary producers

6. Retailers assist wholesalers by

A giving advice on the use of goods.
B offering information on new goods available.
C paying in advance.
D providing details of goods demanded

7. Why is the Internet more suitable for buying books than for buying computers?
A better after-sales service
B books are easier to carry
C consumers can pay by credit card
D there is less need for technical advice

8. What is a feature of a multiple chain store?

A centralised purchasing
B less than five branches
C many departments
D wide range of services

9. The following types of retailer operate in a country.

Which retailer is likely to sell many goods at low prices?

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10. Why do companies use logos on the packaging of their products?
A to ensure that the product cannot be resold by thieves
B to identify and scan the product for the purposes of stock control
C to make the product easily recognised and remembered by the consumer
D to show that the product meets all legal health and safety requirements

11. What has helped the self-service system of retailing to expand?

A after-sales service
B branding
C delivery service
D the growth of credit

12. Customers can use different types of card when buying goods and services.
Which type of card allocates points to a customer for every $1 spent?
A credit card
B debit card
C loyalty card
D store card

13. How is informal credit different from extended credit as a means of payment for
goods?

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A Goods bought are not usually of re-saleable value.
B Goods can be used or consumed before they are paid for.
C Interest is not charged if the bill is paid before a certain date.
D The seller of the goods usually knows the customer personally.

14. Which service do credit card companies provide free of charge when customers use
their credit cards?
A balance transfers
B cash withdrawals
C foreign currency
D monthly statements

15. Susan buys a jacket using a credit sales agreement. The cash price is $290.
Susan pays $50 deposit and the rest of the debt, on which 10% interest is charged, in
12 equal monthly instalments.
What will be the total credit sales price?
A $266 B $290 C $314 D $340

16. A factor is an agent who

A charges higher commission than other agents.
B guarantees to sell goods for his principal.
C owns the goods that he is offering for sale.
D sells the goods which he has in his possession

17. What are consumers most likely to be protected against by law?

A falling prices
B faulty goods
C imported goods
D persuasive advertising

18. Which of the following is not a purpose of a consumer magazine?

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A advertising new goods
B promoting goods that are value for money
C providing advice on goods and services
D testing a range of goods

19. What is the purpose of printing ‘E. and O.E.’ on an invoice?

A to enable mistakes to be corrected later by the supplier
B to ensure that the customer does not alter the figures
C to give details of cash and trade discounts
D to show that the supplier has made an error

20. In which order would the commercial documents concerning the purchase of goods
be used?

21. A trader buys goods at a cost price of $50 each. He is allowed trade discount of $20
on each item. He sells the goods with a mark-up of 20% on the cost price.
What is the selling price?
A $20 B $30 C $50 D $60

22. The diagram shows a statement of account.

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What is the value of X?
A $440.00 B $560.00 C $640.00 D $730.00

23. An advice note is used when

A a buyer returns goods to the seller.
B a seller requests payment.
C goods have been despatched.
D there is an error resulting in an undercharge

24. Amos Patel wishes to use the Internet to promote his business. He has arranged to
place a pop-up advertisement on the website of a well-known company.
What advantage is gained by Amos when using this type of Internet advertising?
A endorsement by the well-known company
B mailing list of many potential customers
C professional design of the advertisement
D regular and frequent worldwide publicity
25. Which is an example of collective advertising?
A a supermarket chain advertising a variety of products

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B manufacturers advertising their own products
C manufacturers in the same industry joining together to advertise their products
D manufacturers of unrelated products joining together to advertise their products

26. What would be a disadvantage to a business of advertising on the Internet?

A Advertisements are difficult to change.
B It is difficult for competitors to view the products offered.
C The design of the website is expensive.
D The website can be viewed anywhere

27. A point of sale display will attract customers who are

A ordering from mail order catalogues.
B surfing the Internet.
C using vending machines.
D visiting a shop

28. A motor manufacturer intends to advertise a new electric car using status and
wealth as a method of appeal.
Which advertising slogan does not use social status and wealth as a method of appeal?

29. The pictures show different methods of transport used in a city.

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Which method of transport would be most suitable for the fast delivery of take-away
meals required by customers in many parts of the city?

30. A farmer wants to send title deeds to his bank.

Which postal service should be used for these important documents?
A airmail
B parcel post
C poste restante
D registered post

31. What is a disadvantage of containerisation?

A Freight charges are low.
B Mechanised handling of containers saves time.
C Risk of theft is reduced.
D Specialised handling equipment is needed.

32. The diagram shows how a consignment of jeans was transported from the
manufacturer to the retailer.

What has enabled the transhipment of this consignment of jeans to take place?
A bulk cargo ships
B containerisation
C low-cost freight airlines
D more powerful, faster trucks

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33. Which function is performed by airport authorities?
A collecting import and excise duties
B guarding against smuggling
C operating immigration control
D providing security for goods and passengers

34. Which is an advantage of rail over road transport for loads carried over long
distances?
A Fuel costs per unit are less.
B Goods are more secure.
C Small loads may be carried cheaply.
D There are rail links to all local areas.

35. What has been an effect of the increased use of containers for transporting goods?
A greater need for warehousing
B higher labour costs
C more damage to goods
D quicker customs clearance

36. What is not a feature of an efficient system of storage?

A open access for all staff
B protection of goods
C regular stock checking
D stock control

37. What is the importance of a bonded warehouse to a local manufacturer who exports
goods?
A Customs duties can be avoided.
B Excise duties paid on goods that are then exported can be reclaimed.
C Goods can be exported more quickly.
D The manufacturing process can be completed in the warehouse

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38. Why do supermarkets need warehouses?
A to avoid paying customs duties
B to increase profits
C to prevent shortages in their shops
D to reduce high advertising costs

39. Which is not a requirement for the good organisation of a warehouse?

A accurate stock control
B cash and carry on sales
C efficient distribution of goods
D protection of goods from theft

40. Which statement is true of a bonded warehouse?

A Goods can be manufactured while they are in the bonded warehouse.
B Imported goods are stored in the bonded warehouse until their duty is paid.
C Imported goods on which duty has been paid are stored in the bonded warehouse.
D Seasonal goods are stored in the bonded warehouse until they are demanded.

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