COMMERCE 7100/13 Paper 1 Multiple Choice May/June hour

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1 * * ambridge International Examinations ambridge Ordinary Level OMMERE 7100/13 Paper 1 Multiple hoice May/June hour dditional Materials: Multiple hoice nswer Sheet dditional Materials: (not provided by IE) Soft clean eraser Soft pencil (type or H is recommended) Ruler Protractor RE THESE INSTRUTIONS FIRST Write in soft pencil. o not use staples, paper clips, glue or correction fluid. Write your name, entre number and candidate number on the nswer Sheet in the spaces provided unless this has been done for you. O NOT WRITE IN NY ROES. There are forty questions on this paper. nswer all questions. For each question there are four possible answers,, and. hoose the one you consider correct and record your choice in soft pencil on the separate nswer Sheet. Read the instructions on the nswer Sheet very carefully. Each correct answer will score one mark. mark will not be deducted for a wrong answer. ny rough working should be done in this booklet. The businesses described in this question paper are entirely fictitious. This document consists of 11 printed pages and 1 blank page. I15 06_7100_13/3RP ULES 2015 [Turn over

2 2 1 The diagram shows the parts of production. production X commerce direct services What is X? aids to trade industry trade warehousing 2 ommerce is involved in the production process because it includes building houses and roads. distributing goods and services. extracting raw materials from the earth. manufacturing machinery. 3 What difficulty will aids to trade not help a business to overcome? distance between buyers and sellers poor consumer knowledge storage of seasonal goods the risk of a business failing 4 What is a feature of a supermarket? competitive prices luxurious shopping facilities many sales floors specialised sales staff ULES /13/M/J/15

3 3 5 The bar chart shows the number of different types of retailer in a town number of retailers department store supermarket variety chain store 6 mobile shop multiple chain store hawker and street trader independent retailer total number of retailers = 80 What percentage are small-scale retailers? types of retailer 10% 25% 50% 75% 6 The picture below shows items used at a retailer s checkout. These items help retailers to encourage impulse buying. obtain invoices and statements of account. offer a delivery service to customers. produce information on sales and stock levels. ULES /13/M/J/15 [Turn over

4 7 Which question is most important for a customer considering buying goods on credit? 4 re the goods fit for the purpose? o the goods represent value for money? What discount will be given by the retailer? What is the difference between the cash price and the credit price? 8 Seals of approval on manufactured goods mean that they are cheaper than other goods. they have been advertised to persuade customers to buy. they have been tested for quality. they were made by a well-known company. 9 The decline of the independent wholesaler has been caused partly by the growth of automatic vending machines. cash and carry warehouses. large-scale retailers. mobile shops. 10 general wholesaler acts as a middleman between the manufacturer and the retailer. Which function carried out by the wholesaler benefits both the manufacturer and the retailer? clearing stocks to enable production to continue giving help and advice on the use of new products providing a wide variety of goods taking the risks of losses from unsold goods 11 What is the function of a broker in international trade? arranging contracts in his own name being responsible for the delivery of goods bringing buyers and sellers together guaranteeing payment to the seller ULES /13/M/J/15

5 12 What is not contained on a statement of account? 5 balance at the end of the period balance at the start of the period credit notes issued during the period description of goods bought during the period 13 The diagram shows an invoice. INVOIE cme Trading Ltd To: Souvenirs ate: 28 May 2015 elivery Note: 3037 Order No: 273 Quantity at. No. Item Terms: 5% 30 days Unit Price $ 150 XY27 hina ups OM32 hina Plates ost $ Less Trade iscount 200 How much money will Souvenirs save if payment is made immediately? $10 $40 $50 $200 Total ost customer would expect trade discount to be deducted from the value of goods bought when goods are bought on credit. goods are intended for resale. it is a cash transaction. the debt is paid promptly. 15 Why does a country import raw materials from other countries? to assist home production to improve the balance of trade to obtain customs revenue to protect home industries ULES /13/M/J/15 [Turn over

6 16 Last year a country s trade figures were as follows. 6 $bn visible imports 1.6 visible exports 1.9 invisible imports 2.1 invisible exports 1.7 What was the country s balance of trade for last year? $0.4bn $0.1bn $0.3bn $3.5bn 17 government is considering imposing a tariff on imported foreign cars. What would be the likely effect of imposing the tariff? It would result in the increased export of home-produced cars. It would raise revenue for the government. The government would know exactly how many cars would be imported. There would be no extra work for the customs authorities. 18 Four employees of a publishing company are discussing the launch of a book about sport. Which employee is referring to advertising coverage? large budget will be necessary. The book cover must have a picture of a famous sportsperson. The target market should be Europe and US. We have a wide choice of methods of appeal. ULES /13/M/J/15

7 7 19 Which advertising medium would be most suitable for use by a manufacturer of engineering parts? billboards leaflets radio trade journals 20 department store organises a competition for its customers. In order to enter, customers have to give their address. What is the main purpose of the competition? to enable the company to inform customers about future promotions to give away surplus stock as prizes to make shopping in the store more attractive to reward customers for their loyalty to the store 21 Why is communication important in the global economy? to advertise and promote goods nationwide to enable companies to contact customers worldwide to move goods urgently required to transport people over long distances 22 What is an advantage of using teleconferencing as a communication service? opies of the message can be received at any time. osts of travelling are reduced. It can be used with an answering machine. It gives exact copies of documents, including colour. 23 What is an advantage of sea transport over air transport? greater safety greater speed over long distance lower carriage costs for bulk cargoes lower insurance charges ULES /13/M/J/15 [Turn over

8 24 The transport of goods has been made easier by 8 express road routes in many countries. fewer facilities at many airports. increased checks by customs officers. more detailed inspections of railway networks. 25 What is a document of title to goods? bill of lading certificate of incorporation insurance policy invoice 26 What is a function of a port authority? collecting customs duties controlling movement of prohibited goods hiring out ships providing refuelling facilities 27 Manufacturers continue producing goods, even when the demand for their goods is seasonal, because they can advertise the goods. insure the goods. transport the goods. warehouse the goods. ULES /13/M/J/15

9 9 28 Mr hang is advertising his cash and carry warehouse. His advertisement includes some information which is not accurate for a cash and carry warehouse. hang s ash and arry Warehouse offers discounted prices extended credit free car parking variety of goods open 7 days a week! Which part of his advertisement is not accurate? discounted prices extended credit free car parking variety of goods 29 Mrs Smith owns a small general store. Why does she have various insurance policies covering different aspects of the business? to guard against risk to help customers to make a profit to reduce prices 30 To which type of insurance does the new for old principle of compensation refer? household contents insurance life assurance marine insurance motor insurance 31 Which insurance principle does not allow a person to insure another person s property? indemnity insurable interest subrogation utmost good faith ULES /13/M/J/15 [Turn over

10 10 32 What is an inflow of funds into a customer s bank account? dividends on investments standing orders for regular payments transfers money to other banks withdrawals of cash 33 Which document may be used to settle debts in international trade? air waybill delivery note letter of credit quotation 34 Which service is not available to a person using Internet banking at home? applying for a loan or overdraft checking bank statements paying cheques into his account transferring funds between accounts 35 Who controls a public corporation? a board of directors elected by shareholders a board of management appointed by the government shareholders who buy shares on a stock exchange tax payers who provide capital through their taxes 36 What is the purpose of the ertificate of Incorporation when setting up a company? to advertise the sale of shares to the public to establish the identity of the company to register the company as a legal entity to set out the rules for operating the company ULES /13/M/J/15

11 11 37 Which statement explains the term limited liability? The amount of money put into a business is limited by law. The business has a limited amount of time to pay its debts. The business limits the range of goods it sells. The owners responsibility for debts is limited to their investment. 38 What is a fixed asset for a shop? cash tills creditors debtors stock 39 clothing retailer says that her rate of turnover is five. What does this mean? The average stock held remains with the retailer for five weeks. The mark-up is 5% more than the cost of the clothes. The profits are 5% of the capital invested. The retailer sells five times the average stock held each year. 40 Suzi runs a business selling shoes. Last year her profit and loss account showed the following: $000 $000 sales revenue 100 less cost of sales 40 gross profit 60 expenses: warehouse and office 5 advertising and sales promotions 15 net profit What is the value of X? wages and salaries 30 X $10 $50 $60 $200 ULES /13/M/J/15

12 12 LNK PGE 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 (ULES) 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 ambridge International Examinations opyright cknowledgements ooklet. This is produced for each series of examinations and is freely available to download at after the live examination series. ambridge International Examinations is part of the ambridge ssessment Group. ambridge ssessment is the brand name of University of ambridge Local Examinations Syndicate (ULES), which is itself a department of the University of ambridge. ULES /13/M/J/15