Cambridge Assessment International Education

Cambridge Ordinary Level

* 3 3 3 3 8 8 4 6 1 6 *

COMMERCE 7100/23
Paper 2 Written May/June 2019
2 hours
Candidates answer on the Question Paper.
No Additional Materials are required.

READ THESE INSTRUCTIONS FIRST

Write your centre number, candidate number and name in the spaces at the top of this page.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.

Answer all questions.

The businesses described in this Question Paper are entirely fictitious.

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

This document consists of 12 printed pages.

DC (ST/SW) 171858/3
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1 Fig. 1.1 shows three brands of water sold in plastic bottles by AA Ltd.

Baywater Caspian Oceane

Fig. 1.1

Use Fig. 1.1 to help you answer the following questions.

(a) (i) Give two reasons why AA Ltd offers different brands of bottled water for sale.

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(ii) State two advantages of branding goods.

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(b) The water is packaged in plastic bottles. Identify one other way of packaging water.

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(c) Circle the correct answer to complete each of the following sentences.

Water is an example of a human

need OR want.

An example of renewable energy is

oil OR wind.
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(d) AA Ltd uses trucks to move the bottled water around the country.

(i) Is road the best way to move bottled water? Give reasons for your answer.

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(ii) Discuss whether or not AA Ltd needs warehousing as part of its business. Give reasons
for your answer.

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[Total: 17]

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2 A coffee shop had total sales of $65 000. Total expenses were $8 000 and the cost of goods sold
was $20 000. The coffee shop is located in a town centre.

(a) Calculate the value of the following. Show your working.

(i) the gross profit

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(ii) the net profit (profit for the year)

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(b) Explain two ways in which this coffee shop could increase its sales revenue.

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(c) Explain one reason why many coffee shops are located in town centres.

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(d) The coffee shop owner is renewing the shop insurance and is considering using an insurance
broker rather than going directly to an insurance company. Discuss whether the shop owner
should use an insurance broker to renew the shop insurance. Give reasons for your answer.

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[Total: 16]

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3 Fig. 3.1 shows an invoice that has been used in a commercial transaction between a wholesaler
and a retailer.

INVOICE No. 832

BB Wholesalers
Mumbai

CC Retailers 28 September 2018

Mumbai Terms: 5% 21 days

Your Order No. 596

Code Description Quantity Unit Price Amount

$ $

J490 Jeans 40 30 1200

MJ628 Jackets 25 80 2000
S952 Sweaters 24 35 840
T637 Ties 100 10 1000
Sub-total 5040

LESS Trade Discount 20% (i) …...…

Invoice Total (ii) …...…

Fig. 3.1

Use Fig. 3.1 to help you answer the following questions.

(a) Complete the invoice in Fig. 3.1 by entering (i) Trade Discount and (ii) Invoice Total. [2]

(b) Explain what is meant by Terms: 5% 21 days.

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(c) Explain one difference between an order and an invoice.

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(d) Discuss whether retailers should buy their stock from a wholesaler or buy directly from
manufacturers. Which would you recommend? Give reasons for your answer.

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[Total: 15]

4 Banks provide a number of services to their customers.

(a) Which of these statements about banking are TRUE and which are FALSE?
Tick (3) TRUE or FALSE in the correct column.

TRUE FALSE
A deposit account allows customers to have an overdraft
limit.

ATMs can be used at any time.

The cashless society is gradually removing the need to write

cheques.
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(b) Is it a good idea for bank customers to use mobile banking? Give reasons for your answer.

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(c) Discuss whether it is better for a customer to pay for an expensive TV with a debit card or a
credit card. Give reasons for your answer.

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[Total: 13]

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5 Fig. 5.1 shows an online advertisement for DD Freight Forwarders.

DD Freight Forwarders (UK)

providing air and sea freight services for over 25 years
Experienced in dealing with customs authorities around the
world
To request a price or arrange a shipment call us now on
+44 (0) 2312115689
Or click here to complete our online enquiry form
We will do the rest!

Fig. 5.1

Use Fig. 5.1 to help you to answer the following questions.

(a) What is the main function of a freight forwarder?

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(b) (i) Identify two examples from the advertisement that make it informative.

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(ii) Suggest two ways DD Freight Forwarders (UK) might make this advertisement more
persuasive.

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(c) The online advertisement mentions telephone and completing an enquiry form. Describe one
other method of communication that an international company might use in its operations.

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(d) Describe two ways that customs authorities can restrict the amount of goods imported into a
country.

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(e) Discuss whether DD Freight Forwarders (UK) should use air or sea transport for the delivery
of machinery from London to Tokyo. Which method of transport would you recommend? Give
reasons for your answer.

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[Total: 19]

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
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 the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.

© UCLES 2019 7100/23/M/J/19