Centre Candidate number

Numb
er

Name: ………………………………………………………

MINISTRY OF EDUCATION
LUANGWA DISTRICT COMMON MOCK
EXAMINATIONS
SCHOOL CERTIFICATE ORDINARY LEVEL

COMMERCE 7100/1
2025
Time: 2 hours 30 minutes Marks: 100

Instructions to candidates:

1. There are Three (3) sections in this paper, section A, B and C

2. Section A:Four suggested answers are given A B C and D. Choose the best one
and mark it with letter (X) on the Multiple Choice Answer Grid provided
3. Answer all questions in this paper
4. In Section B and C, follow the instructions as guided
5. Write your name and candidate number on the spaces provided
6. Do not start writing until you are told to do so

not allowed in the examination Room.

CELL PHONES
NON-PROGRAMMEABLE CALCULATORS may be used in the examination Room.

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SECTION A: [20 Marks]

Answer all the questions in this section on the answer grid provided by putting
a cross (X) on the letter you have chosen as your answer.

1. Commerce involves the following principle activities except …………….

a. Production
b. Manufacturing
c. Exchange and distribution of goods and services
d. Consumption
2. ………….. goods are goods made or sold under another’s brand name without the
brand owners’ authorization
a. Counterfeit
b. Substandard
c. Original
d. Quality
3. Not everyone has the ………. to enter completely into a contract because of certain
requirements
a. Consent
b. Legal capacity
c. Knowledge
d. Chance
4. When is the credit sales agreement made?
a. When the customer pay cash for the goods
b. When the customer pays nothing for the goods
c. When the customer gets the goods and pay later
d. When the customer asks for personal advice from the retailer
5. What is not a reason for protectionism in foreign trade?
a. To safeguards local jobs
b. To help a new local industry
c. To prevent the country from getting into debts
d. To encourage exports
6. The advantage of bringing a partner into a business by a sole trader is that he will
….
a. Handover the business to the partner
b. Pay the partner a salary
c. Receive more capital for the business for expansion
d. Share only the losses with the partner
7. In a limited company, capital is raised by ……….
a. Selling shares
b. Buying of fixed assets
c. Trading and selling
d. Selling of fixed assets

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 8. Debenture holders are creditors to a company who receives …..
a. Loans
b. Dividends
c. Interest
d. Profits
9. Which document used in the transport of goods is quasi-negotiable?
a. Airway bill
b. Bill of lading
c. Consignment note
d. Insurance policy
10. Which process is not carried out in a bonded warehouse?
a. Blending
b. Bottling
c. Manufacturing
d. Selling
11. What do we call vessels that do not operate regular routes to pick up cargo
whenever it can be found?
a. Tramp ships
b. Passenger liners
c. Container ships
d. Cargo liners
12. From the following identify the feature of a bank current account
a. A high interest rate is earned on money deposited
b. A minimum amount must be kept in the account
c. An overdraft may be possible
d. It is a means of long-term saving

13. What is building societies main area of concentration?

a. Approving mortgages
b. Being financial advisor to the government
c. Discounting bills of exchange
d. Providing cheque facilities

14. A postal service that enables letters or parcels to be addressed to a post

office in order to be collected in person is known as …………
a. Cash on delivery
b. Data post
c. Post restante
d. Business reply service

15. The telecommunication service that allows a business to send exact copies
of documents to distant places using telephone lines is called ………
a. Confranvision

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 b. Facsimile
c. Prestel
d. Telex
16. Which of the following is not an advantage of the internet
a. It has the widest coverage
b. It is expensive to maintain the website
c. It combines visual impacts with sound
d. Attractive and interesting adverts are shown in color
17. Many people are involved in insurance. What name is given to the person
who accepts risks and meets claims?
a. Actuary
b. Assessor
c. Broker
d. Underwriter
18. Which of the reason below is not an advantage of advertising on the radio?
a. It is cheaper than television
b. It gives wide coverage
c. The advertisement is not in color
d. Radios are cheap to buy

19. The type of advertising jointly put up by a group of traders, promoting the
use of a product without mentioning a particular brand is called …… advertising
a. Competitive
b. Generic
c. Informative
d. Persuasive

20. In which way is advertising beneficial to the public?

a. Consumers may be tempted to buy goods they did not budget for
b. Advertising plays around with consumers emotions and they make irrational
judgments
c. Project a favorable image of the product advertised
d. Brings new products to the attention of consumers

SECTION B: [40 MARKS]

Answer all questions in this section on the spaces provided in the inserted Answer Booklet.

1. Explain industry as a branch of production. [3]

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 2. (a) Explain legality of the agreement as an element of a valid contract? [3]
(b) A retailer bought 50 shirts costing K50.00 each. He is allowed 10% trade discount and 5% cash
discount if he pays within days. How much will he pay if he pays within 21days? Show all your
calculation. [3]

3. Use the words or phrases below to complete the statements that follow:

WORD LIST

Bill of Lading, Letter of hypothecation, Indent, Quota, Certificate of origin, Charter

i. ………………… is a limit imposed by the government, on the importation of certain goods.

ii. A document that guarantees advance payment to the exporter before dispatching goods, and as
well as assures the importer of ownership of goods before making payment is called
………………………………………………….
iii. In an event that the importer fails to honour the bill of Exchange at its maturity stage,
……………………. is issued out to grant permission to the importer’s bank to sell the goods on
which payment has been defaulted.
iv. An instruction by the importer to an agent in foreign country to order goods is known as
……………….
v. A contract between the customer and the transport, to hire a transport vessel is called
…………………... [5]
4 Describe an article of association. [3]

5 What is the function of the contract note on the stock exchange? [3]

6 Outline four (4) modern trends in transport. [4]

7 State the three emerging issues in banking. [3]

8 With regards to communication, state whether the following statements are true/false

i. Communication assists in settlement of payment and queries that may arise in a business
transaction.
ii. A Business reply service is a postal service that enables licensed businesses to receive replies
or orders from potential clients.
iii. Poste Restante is a postal service provided for residents of the town or city with a permanent
address.
iv. Franking machine prints postal impressions on envelopes.
v. A mobile phone (also known as a cellular phone) works exactly like modern land phone.
[5]

9 Mrs. Lee’s house is valued at K250, 000 but she declared it at the value K180, 000 when taking out an
insurance Policy. The house is later destroyed by fire and K70,000 is needed for repairs.

i. How much compensation will be received from the insurance company?

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 ii. Give a reason for your answer in (i) above, clearly highlighting the relevant principle of
insurance applied.
iii. The non-refundable fee paid by Mrs. Lee to the insurance company in return for the cover of
her house is called ………………. [3]
10 Complete the following sentences below by using the WORDLIST given: Advertising, persuasive
advertising, personality, Informative advertising, advertising media, Ambition, Advertising

i. …………. Widens the market share of a product.

ii. The advertising that gives facts about the usefulness of the product is called…..
iii. …………. It uses emotions to appeal to potential customers.
iv. Famous people may be shown using a product in the advertisement such as Dr Kenneth
Kaunda and Barbra Banda, this method of advertising appeal is ……….
v. ………… is the means through which an advertisement is disseminated to the target group.
[5]

SECTION C: [40 Marks]

There are five questions in this section. Answer only two questions. Write your
answers in the separate answer booklet provided.

1.How do commercial services assist a doctor in running a small hospital?[20]

2 (a) Describe the functions of a wholesaler. [10]

(b) Discuss the functions of the Zambia Revenue Authority. [10]

3 (a) Outline the differences between partnerships and limited companies.[10]

(b) Explain the benefits of a shareholder. [10]

4 (a) Explain the disadvantages of rail transport. [10]

(b) Discuss the benefits of advertising to the manufacturer. [10]

5 (a) Outline the importance of commercial banks to business. [10]

(b) Express the principle of indemnity. [10]

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