1).

The three stages of production are classified as

A. importing, selling and distribution
B. importing, manufacturing and exporting
C. manufacturing, wholesaling and large scale retailing
D. extracting, manufacturing and selling

2). The trading figures of Maldives publicized as follows in 2009

Activity $ million
Farming 50
Fish canning 120
Fishing 180
Importing 800
Construction 41
Advertising 10
Agriculture 12
Exporting 200
Tourism 750

What is the total value of tertiary output?

A. $1760
B. $242
C. $161
D. $1670

3). Why is division of labour important for a company?

A. It increases the cost of production.
B. It increase monotony
C. Allows achieving economies of scale.
D. Workers find their jobs more interesting.

4). What is the main function of a retailer?

A. to manufacture goods for customers
B. to supply small quantities of goods to consumers
 C. to sell goods in bulk to wholesalers
D. to supply raw materials to manufacturers

5). What is a franchise?

A. a group of retailers buying from one wholesaler
B. a company operating in several countries
C. a large-scale retailer with many similar branches
D. a permission to use an established brand name

6). Why is the branding of goods important for self-service stores?

A. Goods are less likely to be damaged.
B. Customers can identify the goods they require.
C. Perishable goods may be stored for long periods.
D. Prices of goods are clearly marked.

7). The diagram shows part of a chain of distribution.

Wholesaler Retailer x
Convenient
Manufacturer quantities

What does X represent?

A. consumer
B. agent
C. producer
D. farmer

8). What is the main reason for a business to introduce Internet shopping?
A. to gain computer security
B. to reduce high overheads
 C. to make speedy delivery
D. to gain access of worldwide market

9). Which service is provided by wholesalers to manufacturers?

A. forecasting the likely changes in the market
B. giving information on record-keeping and displays
C. operating a cash-and-carry facility
D. providing a wide range of goods

10). Why does a manufacturer obtain quotations from more than one supplier?
A. to find the cheapest supplier
B. to check deliveries of goods from suppliers
C. to check the manufacturer’s accounts
D. to find out how much the manufacturer owes suppliers

11). A sports equipment retailer purchased the following items from a manufacturer on the following
items on credit terms on 27th October 2006:

Items Quantity Unit price ($) Amount

Sports shoes 200 126 xxxx
Sports cloths 120 250 xxxx
Soccer balls 100 165 xxxx

Trade discount 25 %
Cash discount 5 % 30 days
If payment was made in full on 10 November 2006, how much was paid?
A. $51,086.25 B. $2688.75 C. $53,775 D. $71,700

12). For what purpose is an invoice sent from the seller to the buyer?
A. to confirm the receipt of the customer’s order
B. to inform the buyer of the dispatch of goods
 C. to summarise a number of transactions over a period
D. to show the details and cost of a particular purchase

13). What is a current account at a commercial bank?

A. an account for daily transactions
B. an account requiring a passbook
C. an account used for savings
D. an account which cannot be overdrawn

14). The diagram shows a sample cheque.

When does this cheque expire?

A. 30th June 2000
B. 1st January 2001
C. 31st December 2000
D. 30th June 2001

15). What is the advantage to a bank customer of using standing order as a means of payment?
A. It ensures that a current account is not overdrawn.
B. The bank asks for payment when it falls due.
C. The customer is able to pay several accounts with one cheque.
D. Fixed amounts can be paid at regular intervals.

16). Why is communication important in the global economy?

A. to assist businesses to develop plans and long-term policies
B. to protect industries in the home market
 C. to transport an increased volume of goods worldwide
D. to enable traders in many countries to compete with one another

17). Husain Dhebu, an Indian trader wants to place an order to his supplier in Dubai.
Which of the following is most suitable?
A. e-mail
B. registered post
C. business reply post
D. mobile phone

18). A large retail organization sends thousands of catalogues customers every month.
Which postal service would be most convenient for customers to reply back?
A. express delivery
B. prepaid postage
C. business reply post
D. recorded delivery

19). Where sellers of similar products advertise their goods jointly, they are said to be using
A. collective advertising.
B. competitive advertising.
C. informative advertising.
D. persuasive advertising.

20). Where is ‘point of sale’ advertising likely to be seen?

A. at an exhibition
B. in a newspaper
C. in a trade magazine
D. on a shop counter

21). Nexus Cars Ltd is offering the following sales promotion packages during the Ramazan:

Gold Package Silver Package

Car value $22000 Car value $50000
5% discount 6% discount
One year free insurance at $500 Two year free insurance at $500 per year
One year free road tax $120 One year free road tax $120
How much would a customer save if he bought his car with Silver Package?
A. $4,120
B. $45,880
C. $20,280
D. $1,720

22). Which types of goods are often carried by airway?

A. heavy and bulky goods
B. heavy goods of low value
C. light goods of high value
D. light goods of low value

23). Which method of transport is shown in the diagram?

A. passenger liner
B. container ship
C. cargo liner
D. tanker

24). Which document is most important when goods are transported by sea?
A. advice note
B. bill of lading
 C. air way bill
D. delivery note

25). For each additional day that vegetables are kept in warehouses,
A. more profit is gained on the capital represented.
B. the price of vegetables in the shops is increasing.
C. the vegetables increase in value.
D. warehousing costs are reduced.

26). Which of the following goods will be stored in types of warehouse?

A. perishables
B. iron-ore
C. timber
D. books and stationeries

27). Ibrahim owns a small general store.

Why is insurance important for him?
A. to help customers
B. to make a profit
C. to guard against risk
D. to reduce prices

28). Which insurance policy covers a customer who is accidentally injured on business premises?
A. public liability
B. employer’s liability
 C. fidelity guarantee
D. personal accident

29). What does the principle of utmost good faith state?

A. The insured cannot gain from a financial loss.
B. The insured must suffer financial loss if the risk occurs.
C. The insured receives interest from the common pool.
D. The insured must disclose all matters relating to the insurance contract.

30). An insurance company announces the rates of premium charges for building insurance

Building Insurance Charges 2010

Location South North West East

Annual Premium charged per $10 $15 $20 $25
$100

What would be the annual cost if a customer insurance a house worth $122 000 at South?
A. $18 300
B. $12 200
C. $109 800
D. $103 700

31). Why should Maldives join a trading bloc such as SAFTA?

A. For high tariffs
B. For political awareness
C. For speedy transport
D. For free trade

32). Why is international trade difficult to undertake than home trade?

A. Advertising is difficult
 B. Lack of advice
C. Distance is greater
D. Subsidies are lower

33). Ome, Jay and Jagdish, wish to set up a new business venture offering accountancy services.
Which types of business organization is described above
A. public corporation
B. public limited company
C. partnership
D. sole trader

34). A company has an authorized share capital of $1 500 000 and an issued share capital of $500 000.
How much will be paid to shareholders if a 5 % dividend is declared?
A. $25 000
B. $40 000
C. $75 000
D. $300 000

35). What is the meaning of the term ‘limited liability’?

A. Shares are issued only to a certain total value.
B. Shareholders are paid back only a certain percentage of their investment.
C. Shareholders can lose only the value of their investment.
D. Shareholders can buy only a certain sum of share capital.

36). A multinational is a business which

A. is owned by shareholders from many different countries.
B. has at least ten branches in a country.
C. operates in several countries.
D. has its head office in the same country as its branches.

37). A company raises finance by issuing debentures.

What is the advantage debenture holder having over shareholders?
A. interest after the shareholders have been paid.
 B. one vote per share.
C. repayment before shareholders if the company goes into liquidation.
D. variable dividend.

38). An extraction of the book of Silcone Pvt. Ltd shown as follows

$
Cash 100 000
Securities 50 000
Account receivables 10 000
Inventory 30 000
Account payable 60 000
Accrued expenses 10 000
Debts 20 000

What is the working capital?

A. $190 000
B. $100 000
C. $ 90 000
D. $19 000

39). In which form of credit purchase do the goods not belong to the consumer until the last payment
is made?
A. bank loan
B. credit card
C. credit sale
D. hire purchase

40). Which development might help to protect the consumer when shopping for food?
A. increased use of bar coding
B. persuasive advertising by manufacturers
C. retailers’ use of loss leaders
D. ‘sell by’ dates on packaging