MOCK EXAMINATION 2017

COMMERCE PAPER 1

TIME: 1 HR Marks: 80

INSTRUCTIONS
1. Answer ALL questions.

2. Use the answer sheet provided for the answer.

For Tutor’s use

Marks Scored

Total Marks
1. Joshua buys products on credit from a local general dealer and pays at the end of the
month. Which type of credit transaction is Joshua using?

A. Budget account
B. Deferred payment
C. Hire purchase
D. Monthly account

2. Which retailer moves around in a community selling goods or services?

A. Hawker
B. Itinerant trader
C. Market stall holder
D. Street vendor

3. Which function is provided by Marketing Boards to assist farmers in Botswana?

A. Paying for harvesting the farm produce.

B. Paying for the cost of insurance for farmers.
C. Providing farming supplies for farmers.
D. Recruiting farm workers for farmers.

4. Why do many business people prepare business plan?

A. To advertise the business

B. To obtain finance from lenders
C. To provide information to suppliers
D. To summarise the transaction of the business

5. Which pair of items are examples of revenue expenditure in an income statement of a

business?

A. Buying fuel and purchasing goods for sale

B. Buying furniture and selling computers
C. Buying motor vehicles and receiving rent
D. Buying stationery and paying commission

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6. Which item appears in a profit and loss account?

A. Carriage outward
B. Cash at bank
C. Returns inward
D. Subscriptions received

7. Which service is provided by the central bank?

A. Discounting bills of exchange

B. Issuing foreign currency
C. Issuing new currency
D. Making payments for private customers.

8. A farmer needs start-up capital for a small livestock business. Which financial
institution is most likely to assist?

A. Building society
B. Insurance company
C. Savings bank
D. Stock exchange

9. Kenneth Motheo insured his car for P50 000. He intends to sell it for P70 000. The
book value is P40 000. The vehicle was involved in an accident and was written off.
How much compensation was paid to Kenneth Motheo?

A. P30 000.
B. P40 000.
C. P50 000.
D. P90 000.

10. Which principle of insurance is applied when the insurance company takes over a
written off motor vehicle?

A. Indemnity

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 B. Insurable interest
C. Proximate cause
D. Utmost good faith
11. Which type of insurance provides cover for employees at work?
A. Business interpretation
B. Employee’s fidelity
C. Employers liability
D. Public liability

12. Which advertising medium is most appropriate for a product intended for the local
community?

A. Newspaper
B. Poster
C. Radio
D. Television

13. What is the main advantage of using e-mail rather than telephone as a means of
communication?

A. It allows discussion.
B. It gives immediate feedback.
C. It is quick to transmit information.
D. It provides a written record.

14. Ofeni-Ofeni Ltd pays its out of station employees by cheques. Which postal service
would be the most secure method to send cheques?

A. Business reply service

B. Express mail
C. Ordinary mail
D. Registered mail

15. Which means of transport would be suitable to move diamonds from Orapa to
Gaborone?

A. Air
B. Pipeline
C. Rail

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 D. Road

16. In commerce, production is considered complete when

A. Finished goods reach the consumer

B. Finished goods reach the wholesaler
C. Raw materials are changed into finished goods
D. Raw materials reach the producer

17. Which is a reason for the Botswana government’s privatisation policy?

A. To control investments in the country

B. To acquire more industries
C. To reduce its control of basic industries
D. To reduce involvement in the economy.

18. Which of the following is a disadvantage of advertising to a consumer?

A. Financial loss
B. Higher production costs
C. Higher prices for goods
D. Wastage of resources

Use the information in the box below to answer question 19.

A tourist travel to Xhumo village to see a place of beautiful scenery. He happened to be
bitten up by a venomous snake in Xhumo while moving around the bush.

19. Which combination of transport would be fast to send snake serum from Xhumo to
Gaborone in order for him to receive the right treatment?

A. Air and river

B. Air and road
C. Railway and air
D. Railway and road.

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 20. Why is market research necessary before starting a business?

A. To avoid competition
B. To adjust an increase in prices
C. To assess demand in the market
D. To attract more customers

21. What advantage does a franchisor enjoy in a franchise business?

A. Easily expands business world wide

B. Easily gets loans and advice
C. Enjoys free advertising
D. Pays royalties to the owner

The following is a diagram of a stock record card for Jobrofi Secondary School.

Jobrofi Secondary School

Stock Record Card
Stock: A4Lined paper Stock levels
Supplier: Botswana Book Centre Maximum: 100 reams
Shelve No: 5B Minimum: 20 reams

Date Received From Issued To (Reams)

Quantity Quantity Balance
01.03.14 150 BBC 40 Business Dept 110
03.03.14 - - 10 Art 100
10.03.14 - - A Setswana 50
20.03.14 B BBC - English 120

Use the diagram above to answer question 22 and 23.

22. Calculate “A” the quantity issued to Setswana department on the 10th March 2014.
A. 20
B. 25
C. 50

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 D. 70

23. Calculate “B” the quantity received from BBC on the 6th February 2014.

A. 70
B. 50
C. 90
D. 170

24. Which is a function of the customs and Excise Authority?

A. Devaluing the local currency

B. Collecting import duties
C. Giving loans to exporters
D. Selling exports at low prices.

25. Which definition best describes communication?

A. Contacting customers by telephone

B. Issue of instructions to staff by management
C. Network within a business using computers
D. Transmission of information from one person to another

26. Which facility is provided by the post office?

A. Registered mail
B. Telephone services
C. Telex facility
D. Video conferencing

27. Which retailer uses self-selection as a method of selling?

A. Hawker
B. Hypermarket
C. Mail order
D. Street vendor

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28. Why is good customer service important to a business?

A. It gives customers choice

B. It guarantees the quality of products
C. It improves the standard of living
D. It leads to customer loyalty

29. What is a reason for international trade?

A. Countries differ in their population

B. Countries differ in their production efficiency
C. Countries have the same level of technology
D. Countries have the same natural resources

30. What is a feature of a public corporation?

A. It has branches in many countries

B. It is created by an act of parliament
C. It is funded through the sale of shares
D. It is owned by private individuals.

31. What is a stock exchange?

A. Market for commodities

B. Market for currencies
C. Market for metals
D. Market for shares

32. The Botswana government has established the Young Farmers Fund. How would this
be classified in the SWOT analysis for a young farmer?

A. Opportunity
B. Strength
C. Threat
D. Weakness

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 Use the information below to answer question 33.

P
Sales 8 700
Purchases 3 000
Opening stock 1 500
Closing stock 500

33. What is the cost of goods sold?

A. P2 000
B. P2 700
C. P4 000
D. P 500

34. Which statement shows the importance of Commerce in business?

A. It helps in selling goods

B. It links the producer and the consumer
C. It protects the business from making losses.
D. It shows the activities in business

35. Namoshi uses his vehicle to sell vegetables around the village. What type of retailer is
he?

A. General dealer
B. Hawker
C. Market stall holder
D. Mobile shop

36. Selling off government owned corporations to private buyers is called

A. Commercialisation
B. Globalisation
C. Nationalisation

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 D. Privatisation

37. Some businesses fail soon after being established. What can cause business failure?

A. Lack of competition
B. Lack of foreign market
C. Limited management skills
D. Limited capital from government

38. Which type of bank is responsible for the issuing of bank notes and coins in a
country?
A. Central bank
B. Development bank
C. Merchant bank
D. Savings bank

The table below shows an extract of a balance sheet.

Current Asset P P
Stock 800
Debtors 1 200
Cash 2 700 4 700

Current Liabilities
Overdraft 800
Creditors 1 000 1 800
Z

39. Use the information above to calculate the value of Z.

A. 1 800
B. 2 900
C. 4 700
D. 6 500

40. What is the most effective type of communication for a business with many branches
within the country?

A. Cable
B. E-mail

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C. Letter
D. Post restante

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