YEAR END EXAMINATION – OCTOBER 2017

YEAR 10

COMMERCE (7100)

PAPER 2 STRUCTURED WRITING (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 13 printed pages.

NAME: _______________________________________________________________________

CLASS: ______________________________________________________________________

MARKS

/100
(80 MARKS)

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 STRUCTURED QUESTIONS
Answer ALL questions.

Question 1

1. Fig. 1 describes some of the activities involved in the production of fruit juice.

Use Fig. 1 to help you to answer the following questions:

(a) Identify the words missing from the points labelled in Fig 1 above. [3]

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b) State two ways in which Marabella Juicers adds value to the oranges and grapefruit.

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c) Marabella Juicers sends invoices and statements of account to the wholesalers who
buy from them on credit.

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(i) State one function of an invoice.

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(ii) State one function of a statement of account.

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d) How do wholesalers assist Marabella Juicers?

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e) A wholesaler has returned a case of orange juice for which he has been charged
$100. The packaging of the orange juice is faulty. Explain the actions Marabella
Juicers should take.

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e) Is it better for small-scale retailers to buy from wholesalers rather than to buy
directly from Marabella Juicers? Give reasons for your answer.

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Question 2

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2. The following advertisements have been placed by two companies in competition
with one another.

Fig 2

Use the advertisements in Fig. 2 to help you to answer the following questions:

a) Identify two examples of competitive advertising given in the advertisements in Fig.

2.

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b) Identify two examples of informative advertising given in the advertisements in Fig.

2.

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c) These two advertisements were placed in a newspaper. Explain two benefits of
using newspaper advertising.
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d) Some producers may take part in collective advertising.

(i) Explain what is meant by collective advertising.

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(ii) Suggest an example of a collective advertising slogan.

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e) Explain the advantages to the consumer of competition between producers of

similar products.

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Question 3

3. A clothing manufacturer in Hong Kong is going to send a consignment of his

products to an overseas buyer, using a container. He has not yet decided whether
to use air or sea transport for this consignment.

a) Explain two reasons for using containers to send the clothing abroad.

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b) Name a trade document issued by the carrier to the exporter when goods are sent
by air transport.

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c) Name a trade document issued by the carrier to the exporter when goods are sent
by sea transport.

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d) The manufacturer has the following methods of communication available to his

Head Office:

fax telephone intranet teleconferencing

Which method of communication would be most suitable in each of the following

circumstances? Give reasons for each of your choices.

i. An overseas customer wants to immediately change his order.

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ii. Four Managers need to discuss the specification of a new product which will soon
be launched in their respective countries.

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iii. An announcement of a new salary scale by the top management.

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iv. Why would a company have an Internet website?

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e) Explain three factors that the manufacturer should consider before choosing a

method of communication.

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Question 4

4. The following commercial documents have been used in a commercial transaction

between a manufacturer and a retailer.

Fig 3

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Use the documents shown in Fig. 3 to help you to answer the following questions.

a) Name and explain the purpose of one document which might be used before the
order is placed.

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b) Explain two differences between the order and the invoice.

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c) The manufacturer allows 25% trade discount on the total amount of the invoice.
Calculate the total amount owing on the invoice after trade discount. Show your
working.

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d) The manufacturer also allows cash discount of 2% for settlement within 7 days.
Calculate the amount that the retailer pays if the invoice is paid within 7 days. Show
your working.

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e) What does E &OE stand for?

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f) What benefit does the seller obtain by writing E & OE on the invoice?

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g) In what circumstances might the retailer not wish to take advantage of the cash

discount offered? [4]

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