ZIMBABWE SCOOL EXAMINATIONS COUNCIL
O’ LEVEL
COMMERCE
PAPER 1
NOV 2000
1. Which is a commercial service?
a. teaching
b. police work
c. fishing
d. finance
2. What is the advantage to a manufacturer of using the channel of distribution
shown below?
Manufacturer - Wholesaler – Retailer – Consumer
a. controls the selling of goods
b. distribution costs are saved
c. goods reach the customer quickly
d. pushes his products better
3. Which product is suited for direct sales?
a. Christmas cards
b. Fashion clothing
c. Newspapers
d. Tea
4. Which is an advantage of do it yourself (D.I.Y) products?
a. Consumers assemble parts using accompanying instructions.
b. Customers serve themselves
c. Products are easy to select
d. Products are sold at competitive prices
5. Which term describes an arrangement by one company to grant permission
to another company to use its trademark in selling products?
a. royalty
b. licence
c. lease
d. franchise
6. Which service does the wholesaler provide to manufacturers only but not to
retailers?
a. clearing of production lines
b. giving advice and information
c. offering storage of goods
d. steadying prices of goods
7. For what reason has the government of Zimbabwe privatized some
agricultural marketing boards?
a. to encourage finance schemes for farmers
b. to discourage competition from other producers
c. to reduce the quantities of produce from farmers
d. to stop subsidizing their operations
8. On 5 November 1999, a sports equipment shop bought sportswear valued at
$10 000 and received 20% trade discount and 5% 30 days cash discount.
If payment was made in full on 3 December 1999, how much was paid?
a. $2 400
b. $7 500
c. $7 600
d. $8 000
9. Which document provides customs officials of the importing country with
reliable information for duty assessment purposes?
a. bill of exchange
b. bill of lading
c. consular invoice
d. open indent
10. The document which is a negotiable instrument is
a. a bill of lading
b. a charter party
c. an airway bill
d. an indent
11. The table below shows the foreign trade figures for country P
Z$ million
Goods bought from foreigners 600
Money received from foreign tourists 50
Goods sold to foreigners 400
Payment for use of foreign transport 40
What is the value of country P‟s trade balance?
a. -Z$190m b. +Z$200m c. -Z$200m d. +Z210m
12. The broker
a. gives guarantee to the principal that the goods imported will be sold
b. helps establish contact between sellers and prospective buyers
c. offers specialist advice on transport facilities available
d. takes possession of goods and sells them in his own name
13. Which law requires manufacturers to show the expiry dates of their products?
a. Food and Foods Standards Act
b. Consumer Council Act
c. Sale of Goods Act
d. Trade Descriptions Act
14. Which statement represents a disclaimer clause?
a. „Do not use for more than 10 days without consulting your doctor.”
b. “Goods left at owner‟s risk.‟
c. “Quality guaranteed or your money back.”
d. Trespassers will be prosecuted.”
15. The Standards Association of Zimbabwe uses the standards marks shown.
Which standards mark is used for jewellery?
Diagrams
16. The turnover of a business for a given trading period is calculated as
a. current assets less current liabilities
b. sales less purchases
c. sales less sales returns
d. total assets less total liabilities
17. Which document contains details on the procedure for calling a general
meeting for a public limited company?
a. Articles of Association
b. Certificate of Incorporation
c. Memorandum of Association
d. Statutory Declaration
Questions 18 and 19 relate to the table below which shows financial records for
Milton Stores as at 30 June 1999.
Z$
Fixed Assets 200 000
Current Assets 100 000
Current Liabilities 40 000
Long term loan 90 000
18. What is Milton Store‟s capital?
a. $60 000 b. $130 000 c. $170 000 d. $300 000
19. What is Milton Store‟s working capital?
a. $10 000 b. $50 000 c. $60 000 d. $100 000
20. What is the advantage of turning a partnership into a private limited
company?
a. its capital will be provided by the state through taxation
b. the business will have continuity after the death of a shareholder
c. the government can easily control important sectors of the economy
d. the promoters can advertise their company in a prospectus
21. Paid- up permanent shares are sold by
a. building societies
b. commercial banks
c. discount houses
d. merchant banks
22. The method of payment where the exporter is both the drawer and the payee
is a
a. bill of exchange
b. cheque
c. money order
d. promissory note
23. The financial market that provides mortgage finance is a
a. building society
b. commercial bank
c. discount store
d. merchant bank
24. Which statement is true of a bank overdraft?
a. Collateral security must be provided
b. It is a formal way of borrowing money
c. It is available to any applicant
d. The repayment period is not fixed
25. Which is a characteristic of money?
a. divisibility into units
b. measure of value
c. medium of exchange
d. store of wealth
26. What does a bank customer benefit by using the cheque system instead of
automated teller machines (ATM‟s)?
a. A statement can be provided on request
b. Overdrafts can be raised
c. The state charges stamp duty
d. Withdrawals can be made on demand
27. The principle of insurable interest states that
a. all matters relating to the insurance contract are disclosed
b. the insured must not gain from a financial loss
c. the insured receives interest from the common pool.
d. The insured must suffer financial loss if the risk occurs
28. Which marine policy would cover the injury of the ship‟s crew or dock workers
due to a fault of the ship?
a. crew and dock workers insurance
b. hull insurance
c. open cover agreement
d. ship owner‟s liability
29. Public liability insurance covers
a. faulty products
b. injury to customers
c. injury to employees at work
d. theft by employees
30. Which facility would one use to send copies of documents urgently from
Harare to Johannesburg?
a. expedited mail service (EMS)
b. facsimile (fax)
c. recorded delivery
d. registered post
31. Which communication service is used in market research to encourage
members of the public to respond?
a. business reply
b. expedited mail
c. poste restante
d. recorded delivery
32. The advantage of using video conferencing (confravision) is that
a. a written message is received
b. an answering machine can be used
c. hotel accommodation expenses are saved
d. information can be reprinted
33. Which document is a contract of carriage?
a. certificate of origin
b. consignment note
c. consular invoice
d. profoma invoice
34. Which is an advantage of road transport over rail transport?
a. fixed timetables
b. minimum transhipment
c. quicker over long distances
d. suitable for bulky loads
35. Why are selling costs lower in a cash and carry warehouse than in a
traditional warehouse?
a. Fewer goods are stored
b. No credit is offered
c. They offer delivery of goods
d. They sell household goods only
36. What measure is taken by customs authorities when imported goods have
been kept for too long in a bonded warehouse without clearance?
a. dispose the goods at a rummage sale
b. issue the importer with a warehouse warrant
c. prohibit further importation of similar goods
d. release the goods to the importer at reduced customs rates
37. For each additional day that potatoes are kept in a warehouse
a. the warehousing bill is reduced
b. the price of potatoes in the shops increase
c. more interest is gained on the capital
d. interest is lost on the capital represented
38. Which is a disadvantage of advertising?
a. it leads to competition among producers
b. it promotes the sale of goods
c. it undermines social standards
d. the prices of newspapers are lowered
39. Why would a manufacturer choose a radio rather than a newspaper to a
product?
a. can use colour for greater impact
b. reaches most parts of the country
c. repeat advertisements can be made
d. helps the illiterate to know of the product
40. Why would a tractor manufacturer advertise in a trade journal?
a. cheap to book advertise space
b. enables a national coverage
c. has a captive audience
d. offers selective coverage
