Cambridge O Level

COMMERCE 7100/11
Paper 1 Multiple Choice October/November 2022
1 hour

You must answer on the multiple choice answer sheet.

*4245947569*

You will need: Multiple choice answer sheet

Soft clean eraser
Soft pencil (type B or HB is recommended)

INSTRUCTIONS
• There are forty questions on this paper. Answer all questions.
• For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
• Follow the instructions on the multiple choice answer sheet.
• Write in soft pencil.
• Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
• Do not use correction fluid.
• Do not write on any bar codes.
• You may use a calculator.

INFORMATION
• The total mark for this paper is 40.
• Each correct answer will score one mark.
• Any rough working should be done on this question paper.

This document has 12 pages.

IB22 11_7100_11/3RP
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1 Which picture shows a human need?

A B C D

2 Raw materials and finished goods may not be immediately required for the next stage in the
chain of production.

Which aid to trade solves this problem?

A advertising
B communications
C transport
D warehousing

3 How are commercial services and direct services interrelated?

A Buying and selling are examples of direct services.

B Commercial services depend on direct services.
C Direct services include advertising, accounting and medical services.
D Tertiary production consists of commerce and direct services.

4 Which type of retailer sells a limited range of products and uses national advertising?

A department store
B hypermarket
C speciality chain store
D variety chain

5 Which factor threatens the survival of a small independent retailer?

A cash and carry warehouses

B factory shops
C large-scale retailers
D voluntary chains

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6 A manufacturer gives a trade mark to one of its products.

What is this called?

A bar coding
B branding
C EPOS
D packaging

7 What is the correct order for making purchases online?

A select goods → visit website → make payment → receive delivery

B select goods → visit website → receive delivery → make payment

C visit website → select goods → make payment → receive delivery

D visit website → select goods → receive delivery → make payment

8 Which credit term matches its correct description?

credit term description

A consumer credit individuals buying goods and services

B credit sales goods are paid for when purchased
C credit card a plastic card issued only by retail stores
D creditworthiness the ability to pay for what is bought

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9 Suleiman received this credit card statement.

statement date 1 October

opening balance $2000

debits $750
credits $500
new balance $2250
credit limit $5000
minimum payment $85
payment to be credited by 21 October

Which way will Suleiman avoid paying any interest?

A pay $750 after 21 October

B pay $2000 before 21 October
C pay $2250 after 21 October
D pay $2250 before 21 October

10 Which advantage does a retailer achieve when a wholesaler breaks bulk?

A benefiting from trade discount

B buying goods on credit
C purchasing smaller quantities
D receiving pre-packed goods for sale

11 The table shows information about intermediaries in foreign trade.

intermediary function reward

agent acts for others earns commission

forwarding agent arranges transportation documents earns fees
X brings buyers and sellers together earns commission

What is X?

A broker
B del credere agent
C export merchant
D factor

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12 What is the correct order of use for these trade documents in a credit sale?

A quotation → cheque → invoice → order → statement → receipt

B quotation → invoice → order → statement → cheque → receipt

C quotation → order → statement → cheque → invoice → receipt

D quotation → order → invoice → statement → cheque → receipt

13 The diagram shows an invoice for goods purchased.

Invoice No. 317293 16 October

ET Trading
unit price total
description quantity
$ $

cooking oil 20 10 200

baked beans 50 2 100
dried fish 100 3 300
Total 600
Terms: 5% 7 days: 2.5% 30 days

The customer paid the invoice on 26 October.

How much did the customer pay?

A $15 B $570 C $585 D $600

14 The table shows visible exports and imports of four countries, A–D.

Which country has a Balance of Trade surplus of $3m?

exports imports
$m $m

A 7 10
B 15 12
C 35 58
D 70 61

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15 What is a tariff?

A duty on imported goods

B limit on number of goods imported
C tax on locally produced goods
D total ban on specific goods

16 Why is trading overseas more difficult than trading in the home market?

A Both traders operate within a trading bloc.

B Different legal systems will apply.
C Fewer goods are demanded.
D Road and rail transport cannot be used.

17 What is a benefit to a retailer of a successful advertising campaign?

A improving the quality of goods

B knowing which goods are required
C selling more goods than before
D setting the price of goods

18 The diagram shows an advertisement for an expensive brand of perfume.

SENSATIONAL

FRAGRANCE

Worn by celebrities

Which method of appeal is used?

A ambition
B hero worship
C social acceptance
D success

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19 What is an advantage to a business of internet advertising?

A Competitors have access to product details and prices.

B Competitors may post false reviews.
C Consumers can compare products from other suppliers.
D The business can monitor how many times advertisements are viewed.

20 What is the cheapest method of sending a written message from one company to another?

A airmail
B courier
C email
D post

21 What is a blog?

A app
B online diary
C pop-up
D social network

22 Which service is provided for an air freight company by an airport authority?

A collection of customs duties

B duty-free shopping
C hire of aircraft
D warehousing of goods

23 A consignment note is used when

A hiring a transport company to carry goods.

B moving goods by sea and rail.
C transporting goods by air freight.
D using own vehicle to deliver goods.

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24 Why do firms use air freight to send goods to other countries?

A Insurance costs are higher.

B It is cost effective for high value goods.
C No transhipment of goods is required.
D Planes cannot carry bulk loads.

25 The diagram shows the channel of distribution from a manufacturer to retailers.

retailer

manufacturer’s wholesaler’s
retailer
factory warehouse

retailer

Which function of warehousing is shown?

A breaking bulk quantity into smaller quantities

B helping with production of goods
C keeping goods until duty has been paid
D storing products until buyers can be found

26 What is a bonded warehouse used for?

A keeping illegally imported goods

B offering wholesaling services
C retaining goods until duty is paid
D storing goods not subject to duty

27 Which product would be stored in a cold storage warehouse?

A canned meat
B dried fruit
C ground coffee
D raw fish

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28 The table provides information about an insurance company.

$m

administration costs 10
claims by policy holders 50
interest on investments 5
premiums received 80

How much is the profit of the insurance company?

A $5m B $25m C $40m D $70m

29 ‘This person assesses the probability of insurance risks and calculates premiums payable.’

What is this person called?

A actuary
B agent
C broker
D underwriter

30 The diagram shows the steps taken by an insured driver to make a claim after a car accident.

documents
insurance
claim form car received by
company → → → →
completed inspected insurance
informed
company

What is the final step?

A compensation paid
B damaged articles recorded
C police called
D proposal form completed

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31 The diagram shows a partly completed bank statement.

Bank Statement

credit debit balance

$ $ $

1 October balance b / f 200

6 October cheque 456873 50 150
14 October direct debit 100 50
16 October salary

The amount of salary paid into the account was $700.

What is the correct entry for 16 October?

A $700 in the credit column and the balance would be $650

B $700 in the credit column and the balance would be $750
C $700 in the debit column and the balance would be $650 overdrawn
D $700 in the debit column and the balance would be $750 overdrawn

32 What is the most likely effect a cashless society will have on banks?

A Customers will not go overdrawn.

B More bank branches will be opened.
C Queues will be longer at ATMs.
D The use of debit cards will increase.

33 Why might a manufacturer choose to open a factory shop on its production site?

A advertise new products

B clear substandard goods
C sell at premium prices
D sell directly to retailers

34 Which person will be employed in the public sector of a country?

A firefighter
B storekeeper
C taxi driver
D waiter

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35 Edward has a small business. He wants to buy a new delivery van on credit for $10 000.

Which method of credit is he most likely to use?

A credit card
B extended credit
C hire purchase
D informal credit

36 What is the function of working capital?

A buying land
B funding dividends
C paying wages
D repaying bank loan

37 What is the best method to improve the rate of inventory turnover for a small business selling fast
food?

A improving marketing
B increasing overdraft
C lowering wages
D reducing wastage

38 The diagram shows a notice in a restaurant window.

SORRY WE ARE TEMPORARILY

CLOSED DUE TO A GAS LEAK

WE MUST FOLLOW
GOVERNMENT REGULATIONS

DO NOT ENTER THIS BUILDING

Which PEST factor is this an example of?

A economic
B political
C social
D technological

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39 What is an example of recycling?

A bio-diesel fuel
B bottle banks
C fair trade
D wind farms

40 Joan purchased an expensive gold necklace. Two days later the chain broke. She took these
steps.

read guarantee → contacted shop → presented receipt → requested refund

What should she do if the shop does not give her a refund?

A contact the manufacturer

B make an insurance claim
C report to the police
D take court action

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Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.

Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.

© UCLES 2022 7100/11/O/N/22