SECTION A: (20 marks)
1. Department stores and multiple shops are grouped under........................................
A) Whole salers.
B) Large scale industries.
C) Supermarkets.
D) Chain stores.
2. Re-insurance is defined as:
A) The taking out of more than one policy on same property.
B) The confirmation by the insured with his insurer in respect to property insured.
C) The insurer also undertakes insurance from bigger firm.
D) Bigger insurance firms offering insurance services to small firms.
3. Loss leaders are used by large scale retailers to
A) Keep the prices as low as possible.
B) Stock more goods in the shelves.
C) Dismiss unfaithful shop attendants.
D) Increase sales.
4. ........................................is a document that is signed by Uganda's high commissioner in London for an importer in Uganda.
A) Letter of Hypothecation.
B) Proforma Invoice.
C) Letter of Credit.
D) Consular Invoice.
5. The account in a bank where withdrawal is only by cheque is
A) Fixed Deposit Account.
B) Savings Account.
C) Current Account.
D) Joint Account.
6. How will the consumer react when there is a decrease in the price of a commodity?
A) Increase quantity supplied.
B) Increase quantity demanded.
C) Decrease quantity demanded.
D) Decrease quantity supplied.
7. The total face value of the shares that have been provided by the company are referred to as
A) Paid up share capital.
B) Issued share capital.
C) Called up share capital.
D) Nominal share capital.
8. The means of payment which enables business abroad to make small payments is called
A) Personal cheques.
B) Money orders.
C) Travelers' cheque.
D) Credit transfer system.
9. What can an insurer do in order to reduce her liability on property which is too expensive to insure?
A) Increase the premium
B) Over-insure
C) Re-insure
D) Under-insure
10. The relationship between the value of the visible and invisible exports and, visible and invisible imports for a particular period is called
A) Balance of trade.
B) Balance of visible trade.
C) Balance of invisible trade.
D) Balance of payment.
11. Itinerant traders would include
A) Tied shops.
B) Barrow boys.
C) Village stores.
D) Supermarkets.
12. ....................................is a financial involvement capable of being insured.
A) Indemnity.
B) Insurable interest.
C) Subrogation.
D) Contribution.
13. The following is the balance sheet for Kilimani ltd as 31-12-1995.
Liabilities Assets
Capital shs.360, 000 Building shs.200, 000
Creditors' shs.40, 000 Equipment shs.112, 000
Stock shs. 48, 000
Debtors' shs. 32, 000
Cash at Bank shs. 8, 000
Total shs.400, 000 Total shs.400, 000
What is Kilimani Ltd's working capital?
A) Shs.48,000
B) Shs.88,000
C) Shs.40,000
D) Shs.128,000
14. What makes a bearer cheque unsafe?
A) Payee is not named on its face.
B) Payee has to be named on its face.
C) Payee and drawer are the same.
D) Carries two parallel lines on its face.
15. Which one of the following forms of transport is suitable for transporting flowers?
A) Road
B) Railway
C) Air
D) Water
16. The type of business suitable for a person with small capital living along a busy highway is
A) Village store
B) Vending
C) Hawking
D) Roadside selling.
17. Which type of warehouse can an importer who has cleared his goods and has no space of his own use?
A) Private
B) Public
C) Bonded
D) Personal store
18. What happens to the customer in both Hire Purchase and Deferred payment in case of defaulting?
A) In both cases the seller takes back his goods.
B) In differed payment the seller takes back his goods while in hire purchase he is allowed to keep them.
C) In hire purchase the seller takes back his goods while in differed payment he does not.
D) In both cases the buyer retains the goods.
19. Which one of the following is not considered as a productive activity?
A) Looking after cattle.
B) Hunting for leisure.
C) Preparing food for the school.
D) Playing football for a soccer club.
20. In the following sets, which one is the correct order of use of the documents?
A) Prices current, order, Advice Note, Invoice and Debit Note.
B) Order, Prices current, Invoice, Advice Note and Debit Note.
C) Prices current, Invoice, Order, Advice Note and Debit Note.
D) Prices current, order, Advice Note, Debit Note and Invoice.
SECTION B: (80 marks)
21. a) What are the advantages of road transport over rail transport in the transportation of goods in Uganda?
b) Under what circumstances may a trader prefer transporting good by rail?
22. a) State the advantages that a farmer who has been producing both maize and beans will have by concentrating in producing maize alone.
b) What disadvantages is he likely to face?
23. a) What is a consumer co-operative society?
b) Give the main services performed by the consumer co-operative societies in Uganda.
c) Outline the major problems faced by these societies.
24. a) Define the term branding.
b) Outline the functions of branded goods.
c) How does branding assist retail trade?
25. a) What are the disadvantages of insurance to the business community in Uganda?
b) Briefly explain the following principles of insurance.
i) Utmost good faith.
ii) Indemnity.
iii) Insurable interest.
iv) Proximate cause.
26. a) State the characteristics of itinerant traders.
b) What are the qualities of a good itinerant trader?
27. a) What is difference between an "active partner "and "quasi partner"?
b) State the advantages of a partnership.
28. The following information was extracted from the books of Accounts of a businessman.
Stock on January 1, 1994 shs. 240,000
Stock on December 31, 1994 shs. 300,000
Net Purchases shs.1, 440,000
Total Sales shs.1, 964,000
You are required to determine:
i) The cost of goods that were sold throughout the year.
ii) The gross profit of the businessman.
iii) The average stock he held that year.
iv) The rate of turnover.