Commerce Revision Module Exam Practice
Commerce Revision Module Exam Practice
Commerce Revision Module Exam Practice
REVISION MODULE
EXAM PRACTISE
Tinofamba nevanofamba
It is the process of changing or transforming a product from its original state to a more
valuable state. Many raw commodities have intrinsic value in their original state. For
example, field corn grown, harvested and stored on a farm and then fed to livestock on that
farm has value. In fact, value usually is added by feeding it to an animal, which transforms
the corn into animal protein or meat. The value of a changed product is added value, such as
processing wheat into flour.
b. Beneficiation {3}
It is the crushing and separating ore into valuable substances or waste by any of a variety of
techniques for example, mineral dressing , mineral extraction , mineral processing, ore
dressing , ore processing
Collect revenue for the government by charging customs and excise duties
Collect, keep and analyze records of imported and exported goods and services
Control bonded warehouses to ensure that duty is collected.
Supervise public health by arranging quarantine for animals
Supervise entreport trade
3. a) Distinguish between private limited companies and public limited companies. {4}
A private company is a closely held one and requires at least two or more persons, for its
formation. On the other hand, a public company is owned and traded publicly. It requires 7 or
more persons for its set up. It is compulsory to call a statutory general meeting of members,
in the case of a public company, whereas there is no such compulsion in the case of a private
company. The issue of prospectus/statement instead of the prospectus is mandatory in case of
a public company, but this is not the case with the private company.
5. Identify difficulties faced by importers and exporters and how they can be
overcome. {20}
different languages are used which will require a language interpreter
long distances are involved resulting in high transport costs
a lot of documents are involved of which some are difficult to understand
different currencies are used which will require conversion
different weights and measurements are used which makes it difficult to compare
quantities
the exporter also experiences delays in receiving payments and in some in stances
faces risks of non payment
there is also stiff competition in different countries
political instability that is political interference by the government may restrict trade
different governments may impose trade restrictions by enforcing trade barriers
different cultures and religions also affect trade, for example a Zimbabwean trader
cannot export mini-skirts to Malawi
Multinationals create jobs which boosts the local economy and more workers to tax.
They bring expertise in that skills of workforce are improved, some may use IT that
would never have before or other skills now deemed basic by the western or
developing world.
Multinationals are in position to benefit from economies of scale . This means the cost
per unit can be lowered through specialisation – with a large workforce work can be
divided up and people can do their limited job expertly.
Technical economies can be gained with automated equipment, but only when fixed
costs of machine can be spread out over outputs.
Purchasing economies can be achieved, for example by buying in bulk companies can
obtain supplies and materials at a cheaper cost per unit.
Multinationals can, however, be accused that the jobs they create may be deskilled
jobs and in fact may be low paid, repetitive assembly line work.
They may exert political muscle. The multinational may threaten to pull out of a
country if they don't get deals on workforce (wages) or overheads (land, rent and
rates) and pollution/clean-up deals.
7 a) Identify how consumers can protect themselves when buying goods and services {8}
Social Acceptace:
A consumer could make more friends if a particular brand of deodorant is used.
Romance:
If a woman buys a particular cream she could become more and attractive.
Hero worship
A well known personality can be seen to advertise the product. It is hoped that consumer will
buy the product because of the appeal of personality.
Any three
10. Discuss the impact of multinational companies to the host country. {10}
political environment
economic environment
social environment
technical environment
legal environment
to reduce imports
to prevent dumping of goods
to correct a balance of payment deficit
to protect infant industries
to safeguard employment
to raise government revenue
to protect strategic industries
13 a) Distinguish between private limited companies and public limited companies. {4}
A private company is a closely held one and requires at least two or more persons, for
its formation. On the other hand, a public company is owned and traded publicly. It
requires 7 or more persons for its set up. It is compulsory to call a statutory general
meeting of members, in the case of a public company, whereas there is no such
compulsion in the case of a private company. The issue of prospectus/statement
instead of the prospectus is mandatory in case of a public company, but this is not the
case with the private company.
Advantages
Products will fetch more money when sold
Products look attractive
Disadvantages
It is expensive
Lack of knowledge on how to add value to a product
(b) Explain any six measures which can be taken to correct an unfavourable
balance of payments {10}
increase exports by reducing consumption of imported goods
impose exchange controls by rationing the allocation of foreign
currency to importers.
devalue local currency so as to make imports expensive and exports
cheaper
control the issue of import licences in order to limit the number of
importers
charging high customs duty on imports to make them expensive than
locally produced goods
give tax concessions to exporters so as to reduce export costs to theexporter
b) How does Global Positioning Remote Sensing (GPRS) used in the transport
business? {6}
c. Balance of Payments
Balance of trade plus Invisible balance
- 50M + - $ 50M = - $ 100M
Advantages of containerization
As cranes are used for loading and unloading containers, there is speed in their
transportation. Moreover lorries carrying containers can drive directly on to a ship.
Containers are sealed and opened at its destination. So damages caused by rainwater
and sunlight can be avoided.
Theft of goods can also be avoided.
As the containers are loaded and unloaded with the help of cranes, breakages can be
reduced.
Containers reduce the need to employ labourers to carry the goods. This reduces
expenses.
Containers, which can be stacked, reduce the need for warehousing.
As there is increased safety in using containers, the insurance cost is reduced.
Refrigerated containers can be used to transport perishable goods.
Disadvantages of containerization
High capital costs are involved in purchasing and maintaining containers.
High training costs are incurred in training labour to handle the loading and unloading
of containers.
Containers occupy a lot of space and hence large space is needed to keep the
containers.
The weight of the containers, reduce the amount of goods that can be transported.
Containers are loaded and unloaded with the help of cranes. This replaces human
labour thus causing unemployment.
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23 a) Explain long term and short term capital. {10}
Any five
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(b) Describe the benefits of virtual markets. {10}
These are non-physical markets
Buyers and sellers trade goods and services online
Benefits
Saves on travelling expenses
Shopping can be done whilst at home
Buying can be done at anytime
Distance is not a barrier
There is wide coverage
Variety of goods can be accessed
25. Evaluate the usefulness of the following trends in Zimbabwe: {20}
a. Telebanking
Advantages of telephone banking
Some people prefer telephone banking because it gives them the chance to discuss
their finances with a human voice. For example, if a customer has a specific query, it
may be easier to receive advice on the phone rather than online . Telephone banking is
also convenient for customers who are temporarily unable to access the Internet from
their home.
The main advantage of banking by phone is that customers can receive information
about the status of any payments that are expected to be withdrawn or paid into an
account. If there is an issue, such as an overpaid credit card payment, it may be easier
to alleviate the problem on the phone because workers will be able to access the
bank's private databases.
However, if a customer requires help outside of business hours, it may not be possible
to call their bank during this time.
Another disadvantage is that telephone banking does not usually operate during bank
holidays, whereas online banking is fully accessible throughout the year. Accessing
account details such as a balance or a recent transaction takes longer on the phone
because people will usually be redirected to different services before they can talk to a
person directly.
The security procedures involved are often more strict, since many banks require a
special security code that is different to the one used for online accounts. However,
this makes telephone banking a safer option than Internet banking because it is
significantly harder for criminals to access accounts through a phone network. For
more details, customers should visit their website or call their bank to request further
information about the services they can receive.
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b. Mobile banking
Advantages of Mobile Banking
In Mobile banking, the user can transfer funds from your bank account to another
bank account with a smartphone just with the help of the internet, from anywhere to
everywhere.
It is available for 24 hours and easy and convenient mode for many Mobile users in
the rural areas. Mobile Banking is said to be more secure and risk-free than online
Internet Banking.
With the help of Mobile, Banking user can transfer funds, and pay bills, checking
account balance, study your recent transaction, block your ATM card, etc. Mobile
Banking is cost-effective, and Banks offer this service at less cost to the customers.
Mobile Banking is not available on all mobile phone. Sometimes, it requires you to
install apps on your phone to use the Mobile Banking feature which is available on
the high-end smartphone. If the customer does not have a smartphone than the use of
Mobile Banking becomes limited. A transaction like transfer of funds is only
available on high-end phones. Regular use of Mobile Banking may lead to extra
charges levied by the bank for providing the service. Mobile banking users are at risk
of getting fake SMS messages and scams. The loss of a mobile customer device often
means that criminals can gain access to your mobile banking PIN and other sensitive
information.
c. E-banking
Advantages e-banking
The main advantage of electronic banking is convenience. You can communicate with
the bank via an online website and/or smartphone app from any location that offers an
internet connection. The electronic facilities are available 24/7 and don't require you
to travel to a branch. You can check balances, transfer money into or out of accounts,
issue payments, order checks, buy certificates of deposit, apply for loans and even
deposit checks by scanning and transmitting them. No travel or waiting in line is
necessary when you bank electronically. Online banking is generally secure,
especially websites that use encrypted communications; that is, websites with the
"https" prefix. Virtual banks can offer the same Federal Deposit Insurance
Corporation insurance provided by conventional banks. Often, virtual banks offer the
highest savings interest rates because they pass along to customers the savings
realized from not paying for physical bank branches and the employees to staff them.
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Disadvantages of e-banking
Although generally secure, electronic banking is not totally secure. It's possible for
sophisticated hackers to steal information as it is transmitted to online banks, leading
to identity theft. It can take a long time to fix problems stemming from stolen
financial information. Some folks feel that online banking is impersonal and would
rather sit with a flesh-and-blood customer representative at a branch. The better online
banks have extensive customer support facilities including phone, chat and email
contact, but some offer disappointing support. It's important to remember that some
banking transactions, such as collecting payments, aren't immediate even if performed
online. It's therefore important to print receipts of your money transfers if you want to
track the progress of a transaction. Online banks might not offer all the products and
services available at bank branches, such as insurance, annuities, trust and estate
planning.
If you want to withdraw money from your online-only account, you'll have to contact
the account holder. Often they provide customers with a network of ATMs where you
can use your debit card to get cash. The downsides are that these ATMs aren't always
available 24/7 and they aren't found around every corner.
26. Use the given information to answer questions that follow: {10}
Sales $ 50 000
Sale returns $ 5 000
Cost of sales $ 18 000
Overhead expenses $ 10 000
Average inventory $ 5 000
Required
a. Rate of stockturn
Cost of sales / average inventory
$10 000/ $5 000
2 times
b. Gross profit
Gross profit is Turnover less cost of sales
Then turnover is sales less sales returns
$50 000- $5 000 = $45 000
So $45 000 - $ 10 000 = $35 000
c. Net profit
Net profit = Gross profit less Overhead expenses
$35 000 - $10 000 = $25 000
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27.a) Explain the term production. (10)
It is the provision of goods and services in order to satisfy human needs
and wants.
There are three stages of production and the first stage is primary which
deals with the extraction of raw materials from the surface.
The second stage is secondary which deals with converting the raw
materials from the first stage into finished or semi-finished goods.
The last stage is tertiary which deals with the distribution of goods and
services.
There are also two forms of production namely direct and indirect.
Direct production is when people produce goods and services for own
consumption like subsistence farming.
Indirect production is concerned with producing goods and services
in surplus for sale which is commercial farming.
Lastly there are four factors of production namely land, labour, capital
and enterprise.
28.a) What factors would a trader consider when choosing an efficient mode of
communication? (5)
29.a) Distinguish between visible and invisible trade, giving one example of
each for Zimbabwe. (6)
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b) Explain three purposes and four contents of the following documents:
i. Indent, (7)
an order to buy goods abroad
can be open when it does not state the source from which the goods
are to be obtained
can be closed when it specifies the types of brands required and the
the manufacturer of the goods
it contains: -how goods are packaged
-terms of payment
-how the goods are to be forwarded
-prices of goods
31.a)Below are trade figures for country Z for the year ending 31 December
2014.
Goods bought from other countries $500
Goods sold to other countries $400
Tourists from country Z to other countries $200
Tourists to country Z $100
Transport services provided to foreign companies $40
Shipping services provided to companies in country Z $20
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32.a) What is a bill of exchange? (4)
-it is a promise to pay a certain amount of money at a future date
-it is drafted by an exporter and sent to an importer
-it is drawn for a period of three months (or multiples thereof)
-it must first be accepted by importer who then writes the word “accepted” across the
face of the bill
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c) List six advantages and six disadvantages of a sole trader. (12)
-easy to control and run
-few legal formalities
-little capital is required
-lower overhead expenses, for example wages
-business affairs are private
-has flexible working hours
-offer personal services to customers
-quick decision making since there is no one to consult
-there is close supervision of workers
-does not share profits with anyone
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35.a) Differentiate between a private limited company and a partnership. (10)
Both documents are used in international trade and shows names of shipping company and
hirer. They are transport documents used in sea transport and are used as contract of carriage
which are prepared by the shipping company.
Differences of bill of lading and charter party (6)
A bill of lading is an agreement to carry goods whilst a charter party is an agreement to hire a
ship. A bill of lading is a document of title whereas a charter party is not a document of title.
A bill of lading is a quasi-negotiable instrument whilst a charter party is not a quasi
negotiable instrument.
(c) Distinguish between direct and indirect production (8)
This is when one produces goods and services This is when one produce goods and services in
for own consumption surplus for sale
Collect revenue for the government by charging customs and excise duties
Collect, keep and analyze records of imported and exported goods and services
Control bonded warehouses to ensure that duty is collected.
Supervise public health by arranging quarantine for animals
Supervise entrepot trade
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b. Distinguish between a broker and a factor
Broker Factors
- Sell goods in the principals name - Sell goods in his own name
- Brings buyer and seller into - Deals directly with the customer
contact
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b. Injury to customers – Public liability
Taken by the employer
Cover claims made by the public who get injured within a firm’s premises ,for
example a customer injured by a falling shelf.
Business is indemnified.
a. Indent (8)
Purposes
- An order to buy goods from abroad
- Send by an importer to an agent overseas
- It can be open indent where the indent does not state the source from which goods
are to be obtained or closed indent where the indent specifies the types of goods
required or the manufacturers from whom the agents must buy the goods.
Contents
It gives details of:
-types of goods
-prices of goods
-terms of delivery
-cost of insurance
-terms of payment
-indent number
Purposes
- Document used in international trade and it assist customs officials to calcukate
customs duty.
- Speeds clearance of goods and delivering of goods
- Prevents fraud in duty calculation
Contents
-Description of goods (type and quantities)
-Prices of goods
-Quantities of goods
-Date of issue
-Names and address of importer and exporter
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40. a) Distinguish between a General crossing and a Special crossing.
- Has the words not negotiable written - Has the name of the payees’ bank and
between the lines branch written in between the lines
- Shareholders are paid after debenture - Debenture holders are paid first before
holders shareholders
Liners Tramps
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41.a) Outline functions of seaport authority
Provide refueling facilities for vessels
Loading and offloading facilities e.g. crates
Provide warehouse
Provide accommodation
Fresh supplies of food and water
Passenger facilities e.g. toilets
Office space (for customs officials)
Provides ship repair yards
Provide communication facilities e.g. telephone
Maintain the efficiency of a seaport
Quarantine for animals i.e. maintain public health
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