Saraswati Vidya Niketan

Vyasa Purnima End of Term Examinations

PRINCIPLES OF BUSINESS - YuvitaJi
Name: ____________________________ Date: 21st July, 2021
Class: Form 4____ Time: 2 hours
Good Luck 

Circle the letter next to the correct

answer. (25 MARKS)
1. Which of the following types of business
environment is MOST typical of the
Commonwealth Caribbean?
(A) Corporate State
(B) Mixed Economy
(C) Centrally planned
(D) Perfectly competitive

2. Labour is BEST defined as the

(A) physical and mental capabilities used to Study the chart above carefully then answer
perform tasks questions 5 & 6.
(B) ability to carry out management functions
effectively 5. The purchasing supervisor reports directly to
(C) level of skills training received by individuals the
who are working (A) CEO
(D) total number of persons who hold jobs in (B) HR supervisor
government ministries (C) finance manager
(D) production manager
3. The term ‘division of labour’ can be defined as
the 6. Which of the following positions would be
(A) organization of tasks in production BEST suited at ‘X’?
(B) assembling of goods for distribution (A) Chief Advisor
(C) separation of tasks to complete a job (B) Board of directors
(D) employment of different types of workers (C) Managing director
(D) Human Resource Manager
4. Private enterprise is run MAINLY to
(A) create profits 7. Mr. Lloyd, manager of LM Ltd, holds regular
(B) reduce inflation staff meetings to listen to ideas from employees
(C) distribute goods and services before making decisions that would affect the
(D) provide jobs for more people future of the company.
What leadership style does Mr. Lloyd employ?
(A) Autocratic (B) Charismatic
(C) Democratic (D) Laissez Faire
8. Under which of the following categories would 14. Which of the following forms of taxation can
subsidized meals for employees fall? be classified as ‘direct’?
(A) Fringe benefits (A) income tax
(B) Duty allowances (B) excise duty
(C) Wages and salaries (C) purchase tax
(D) Workmen’s compensation (D) customs duty

9. Which of the following is NOT an example of 15. Which of the following is a function of a
collateral? Chamber of Commerce?
(A) Bond (A) creating employment
(B) Stock (B) protecting the environment
(C) Property (C) assisting in securing markets for producers
(D) Money order (D) providing financial aid to hurricane victims

10. Which of the following individuals benefit 16. Which of the following measures are used by
from having ‘limited liability’ status? governments to redistribute income?
(A) Franchises (A) Custom duties and levies
(B) Shareholders (B) Consumption tax and tariffs
(C) Ordinary partners (C) PAYE and National Insurance
(D) Debenture holders (D) Excise duties and value added tax

11. Management Information System (MIS) is 17. A country has a favourable balance of trade
defined as the when
(A) use of computer technology to gather (A) it sells more than it buys
information for use in making decisions within an (B) it buys more than it sells
organization (C) imported goods are cheaper
(B) technological benefits gained by an (D) there are no restrictions to trade
organization for being part of a well-organized
industry 18. Which of the following practices would NOT
(C) use of various factors within a busines to contribute to the economic development and
reduce costs and increase profits growth of a country?
(D) management process responsible for (A) provision of loans and technical assistance for
identifying, anticipating and satisfying consumer establishing local businesses
requirements at a profit. (B) provision of more infrastructure within the
country
12. The condensed version of the business plan is (C) increased use of the country’s natural resources
contained in the (D) increased importation of consumer goods
(A) feasibility plan (B) marketing plan
(C) keynote summary (D) executive summary 19. Export licences are issued MAINLY to
(A) encourage local businesses to produce more
13. The success of a government’s economic goods for export
policies can be MOST effectively measured by (B) indicate to the importing country the price at
(A) an increase in the level of policies which the goods are to be sold
(B) an increase in the standard of living (C) indicate to the importing country that the
(C) a decrease in the level of employment goods are of a high standard
(D) a decrease in the volume of production (D) enable the government to control the flow of
goods being exported
20. The buying and selling of goods and services 25. Which of the following BEST describes
among countries is called the term ‘loss leaders’?
(A) balance of trade (A) an item which the retailer gives away to
(B) international trade customers
(C) balance of payment (B) a product which is sold cheaply to attract
(D) international marketing customers
(C) a good which has no real market value
21. The purpose of CARICOM is to (D) a product which the retailer is unable to
(A) allow member states to collaborate locate
(B) encourage the transfer of technology within the
region
(C) foster interregional trade and common services
(D) allow for the unrestricted movement of persons
among the territories

22. Which of the following terms defines a

continuous rise in the general level of prices?
(A) inflation
(B) reflation
(C) deflation
(D) depression

23. In periods of inflation, the ability to raise

additional capital for expansion is MOST likely
to be a problem for
(A) partnerships
(B) sole traders
(C) public companies
(D) multinational corporations

24. Which of the following is NOT a benefit

of international trade?
(A) producers are able to increase their
market size
(B) political links are developed with other
countries
(C) import restrictions can be imposed on
foreign items
(D) a greater variety of goods is obtained
from overseas
 SECTION TWO – (40 MARKS)
SECTION A (10 MARKS) 3. Cite ONE piece of evidence from the case to show
CASE STUDY - Poplen Iron Works how Ford Poplen demonstrated his responsibility to
EACH of the following:
Ford Poplen started his metal craft business two - Society
years ago in a shed at the back of his parent's
home, located in a strictly residential community.
He produces and sells a variety of metal furniture,
grills and gates. However, handcrafted metal
souvenir items are his unique designs. He is
- Government
thinking of registering his business, but he has not
been keeping proper accounting records. He
decided to employ a part-time accountant to
organize his finances and ensure that he is meeting
his tax obligations. He will also employ a finisher
and a painter. He had to relocate his business
because his neighbours complained about the noise (2 marks)
and constant smell of paint coming from the shed.
The new location is in a commercial district where 4. Describe how Ford Poplen has executed the
he pays a fixed amount which covers rent, utilities management function of 'organizing'. (1 mark)
and the use of equipment.

Complete the following business plan using

information from the case.

1. Identify the kind of business based on the type of

ownership. (1 mark)
5. State TWO unethical business practices in which
Poplen Iron Works was involved. (2 marks)
2. Create an organizational chart showing the
structure of Poplen Iron Works. (4 marks)
 5. Identify TWO responsibilities that Mary must
SECTION B (8 MARKS) undertake as a manager of the business. (2 marks)
CASE STUDY - Almost New

Finding affordable and fashionable clothing was

one of Mary’s biggest struggles until her sister,
Agatha, moved to the USA. Agatha started
purchasing out-of-season and used clothing and
shipping them back home for Mary and her
daughters. People started complementing the
family on their fashionable attire. Mary and
Agatha decided to turn the venture into a business.
They plan to name the business Almost New.
Agatha would purchase and ship items and Mary
SECTION C (12 MARKS)
would manage the business. They would each own
50 per cent of the business and share any profits or
losses equally. Mary would operate the business The owners want to make the business attractive to
from her house which is located on a busy street families who operate on a limited financial budget
corner near the city. Two of Mary’s daughters but want to remain in fashion. They plan to set up
would work as shop attendants. the store like any other fashion boutique, taking
advantage of the busy street on which, they will be
QUESTIONS: located. In addition to carrying high quality
products at affordable prices, the owners’
marketing strategy would include seasonal fashion
1. Identify the form of business organization that
shows, television advertisements, distribution of
Mary and Agatha plan to start. (1 mark)
flyers and special discounts to customers. Mary’s
daughters would help to promote sales and do
market research for the business by issuing surveys
2. List TWO stakeholders of the business. (2 marks) to customers and passers-by and through e-mails
to target markets.

3. State ONE potential source of conflict that could QUESTIONS:

arise between Mary and Agatha. (1 mark)
1. State TWO benefits of the location of the business.
(2 marks)
4. Outline TWO strategies for effective
communication between the owners of the business.
(2 marks)
2. Identify ONE likely targets of the business.
(1 mark)
 employees, paying taxes and paying other
recurrent expenses.
3. State ONE way in which Almost New may
benefit from conducting market research. (1 mark)

QUESTIONS:
4. List TWO factors that are likely to influence
consumers’ decision to shop at Almost New. 1. Identify THREE sources of financing, other than
(2 marks) personal sources, from which the company may
obtain funds. (3 marks)

5. State TWO marketing activities in which Almost

New could engage to promote sales. (2 marks)
2. State TWO benefits to the owners of using their
own funds to start the business. (2 marks)

6. Identity TWO distribution channels that Almost

New can utilize to get its products to customers.
(2 marks)

7. State ONE terms-of-sale options that Almost New

can offer to encourage customers to purchase its
products. (1 mark) 3. State THREE ways in which government could
assist this new business. (3 marks)

8. State ONE strategy that the business could use to

price its products. (1 mark)

SECTION D (10 MARKS)

The business owners used their own resources to

start the business. If the business grows as has been
projected, the owners plan to seek financing to
open other outlets in the city. The financing would
include money for start-up costs, hiring additional 4. Identify TWO types of taxes that Almost New
should pay to the government. (2 marks)
END OF EXAM.