Business Management 2007 WASSCE-Past Questions and Answers

WAEC
Business Management 2007 WASSCE

WASSCE Past Questions and Answers for Business Management 2007 is a learning resource. Truly, we prepare such e-learning materials to help students pass business management courses or exams.

Notably, this is irrespective of the relevant certificate accreditation board or authority or examining body.

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Table of Content

 

General Overview

WASSCE 2007 business management question by Educareguide is is an online material that may students prefer to study.

It has assists students to gain admission to business management University of their choice. Indeed, if there is any business management classes you should attend to gain a business and management degree, then this website is your preferred choice.

Though business management past questions and answers pdf will soon be available for download.

Nevertheless, this business management studies material is very important in your ambition to pass any business management schools exam, including the WAEC BM paper.

Certainly, excelling in business management programs will be much easier when studying for your degree in business. 

Furthermore, business management colleges that award business management  certificates are always delightful to admit students who study business management subjects lists.

Truly, our site helps you with strategies on how to pass your business management examination. Secondly, we have materials on business management major topics, sub-topics, etc.

Therefore, our site is very helpful to Senior High School – SHS Students across the West African sub-region and the globe.

Notably, some of these countries are Nigeria, Ghana, Sierra Leone, The Gambia and Liberia.  Also, students in Europe use our business management study manual for exam success. Specifically for this paper, check the questions and the answers just below.

 

The Nature of the Examination – Business Management 2007 WASSCE

There are two Papers in the examination, (and these are Paper 1 and Paper 2).Paper 1 is an Objective Test and Paper 2 is a written theory paper.

There are 50 questions in the Paper 1. Finally, there are 8 questions in the Paper 2. The 8 questions is made up of 1 Case Study and 7 other questions.

They are asked to tests the student’s general understanding of the various topics under business management. 

I must emphasize that, in order to pass your WASSCE questions with good answers, you need to practice critical thinking. This is because, some of the questions are tricky.

 

The Summary of the Paper – Business Management 2007 WASSCE

The WASSCE Business management Paper for 2007 can summarized below:

  • 2007WASSCE Business Management Paper One
  • 2007WASSCE Business Management Paper Two

 

Business Management 2007 WASSCE-Past Questions and Answers Paper 1

 

Let me show you how to find the answers to the Business Management Questions – Paper 1. To clarify that, when you read a question, just click on this symbol (˅) that follows the question.

After doing so, the answer will drop down for you. In fact, it is a very simple task. However, for the purposes of evaluating yourself, you may want to answer the before reviewing the suggested answer (or solution)

 

  1. The association of two or more persons engaged in a common business with the view to making profit is referred to as   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. public corporation
    2. co-operative society
    3. company
    4. partnership

 

  1. One advantage of sole proprietorship is   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. specialization
    2. ability to take quick decisions
    3. low overhead cost
    4. high rate of profit

 

  1. Which of the following is not a feature of a developing economy?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Political stability
    2. Low per capita income
    3. Unemployment
    4. Unfavourable balance of payments

 

  1. The management function which ensures that performance conforms to set standards is referred to as   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. planning
    2. organizing
    3. directing
    4. controlling

 

  1. Evaluating an employee’s performance refers to staff   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. training
    2. appraisal
    3. transfer
    4. dismissal

 

  1. At what stage in the life cycle of a product does competition set in?   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Decline
    2. Maturity
    3. Introduction
    4. Growth

 

  1. The ownership right in a limited liability company is in the form of   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. shares
    2. profit
    3. commission
    4. interest

 

  1. The channel of communication between a personnel manager and a finance manager in an organization is called   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. horizontal
    2. downward
    3. diagonal
    4. upward

 

  1. The concentration of decision-making power at the top hierarchy of an organization is referred to as   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. decentralization
    2. centralization
    3. delegation
    4. specialization

 

  1. Which of the following is not an aspect of the directing function of management?   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Communicating
    2. Leading
    3. Supervising
    4. Staffing

 

  1. An association formed by traders and manufacturers to safeguard and develop their interest is referred to as   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. chamber of commerce
    2. trade association
    3. consumer association
    4. trade union

 

  1. The most popular business unit in West Africa is   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. partnership
    2. joint stock company-
    3. co-operative society
    4. sole proprietorship

 

  1. Which of the following is not the subject matter of collective bargaining?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Promotion policy
    2. Grievance resolution
    3. Fringe benefits
    4. Hours of work

 

  1. Which of the following roles is performed by central banks?   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Safeguarding valuables for customers
    2. Accepting deposits
    3. A lender of last resort
    4. Giving advances to customers

 

  1. Radio broadcasting is an example of   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. face-to-face communication
    2. visual communication
    3. grapevine communication
    4. audio communication

 

  1. Which of the following is not a quality of money?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Unit of value
    2. Durability
    3. Divisibility
    4. Relative scarcity

 

  1. The practice of exchanging goods for goods is referred to as   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. exclusion principle
    2. credit system
    3. barter system
    4. window shopping

 

  1. The aim of production is to   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. make profit
    2. satisfy human wants
    3. provide employment
    4. facilitate exchange

 

  1. Risk management involves all the following except   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. avoidance
    2. insurance
    3. location
    4. retention

 

  1. Income tax is a tax levied on the employee’s   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. gross income
    2. tool deduction
    3. pension contribution
    4. net income

 

  1. A contract under which one party agrees to indemnify another against risk is known as   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. assurance
    2. proximate cause
    3. Insurance
    4. cover note

 

  1. The passing on of information from one person to another where the perceived meaning is different from the intended meaning is referred to as   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. effective communication
    2. ineffective communication
    3. informal communication
    4. formal communication

 

  1. Which of the following means of production falls under extractive industry?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Sand winning
    2. Bridge construction
    3. Teaching
    4. Manufacturing

 

  1. The control of a Public Corporation is in the hands of the   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. committee members
    2. board of directors
    3. shareholders
    4. government

 

  1. Which of the following is not a marketing mix variable?   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. The price
    2. The product
    3. The policy
    4. The place

 

  1. A document of title to goods which also acknowledges the receipt of the goods to the shipowner is referred to as   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. consular invoice
    2. proforma invoice
    3. bill of lading
    4. bill of exchange

 

  1. A place for settling inter-bank indebtedness if referred to as   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. development bank
    2. commercial bank
    3. merchant bank
    4. clearing house

 

  1. Which of the following types of cheque can be cashed over the counter?   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Stale cheque
    2. Dishonoured cheque
    3. Crossed cheque
    4. Open cheque

 

  1. The reward received by commercial banks for granting loans is referred to as   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. commission
    2. interest
    3. profit
    4. bonus

 

  1. The process by which raw materials are manufactured into finished good sis termed   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. specialization
    2. extraction
    3. manufacturing
    4. consumption

 

  1. Which of the following types of communication does not follow any official channel?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Grapevine
    2. Formal
    3. Vertical
    4. Horizontal

 

  1. Which of the following is true of a co-operative society?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. It is formed to cater for the interest of its members.
    2. Members have limited liability
    3. There is proxy voting
    4. Senior members are entitled to more votes.

 

  1. Market segmentation requires that each separated market should be   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. heterogeneous
    2. homogeneous
    3. contagious
    4. continuous

 

  1. Feedback received on the computer monitor is an example of   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. input
    2. hardware
    3. output
    4. byte

 

  1. Which of the following departments in an organization is responsible for the health and safety needs of workers?   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Production
    2. Personnel
    3. Marketing
    4. Finance

 

  1. Productivity is one way of measuring the   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. probability of a firm.
    2. production level in a company.
    3. amount of capital invested in a company.
    4. efficiency of labour

 

  1. The process of assessing an applicant’s suitability for a job is referred to as   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. overdraft
    2. trade credit
    3. mortgage
    4. Debenture

 

  1. A loan from the public to a company, attracting a fixed rate of interest and payable before dividend is known as   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. overdraft
    2. trade credit
    3. mortgage
    4. Debenture

 

  1. The setting of an initial high price on a product is known as   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. market skimming pricing
    2. market penetration pricing
    3. target pricing
    4. promotional pricing

 

  1. Which of the following steps comes first in decision-making?   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Solving the problem
    2. Identifying the problem
    3. Implementing alternatives
    4. Selecting alternatives

 

  1. Who is referred to as the payee of a cheque?   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. The banker who issues the cheque book.
    2. The person who pays out for the cheque.
    3. The banker who verifies the cheque.
    4. The person who is to receive the money from the bank.

 

  1. An agent who guarantees a number of sales and earns a special commission is a   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. broker
    2. commission agent
    3. factor
    4. del-credere agent

 

  1. Which of the following is the responsibility of business to government?   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Declaration of losses.
    2. Declaration of profits.
    3. Prompt payment of taxes.
    4. Payment of Union dues.

 

  1. The central processing unit of the computer consists of   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. software, control, arithmetic and logic unit.
    2. output units, control, arithmetic and logic unit.
    3. input units, control, arithmetic and logic unit.
    4. memory units, control, arithmetic and logic unit.

 

  1. In formal recruitment process, which of the following stages comes first?   [expand title=””]  D   is the answer -Business Management 2007 WASSCE   [/expand]
    1. An induction programme.
    2. Transferring an employee to another company.
    3. Demoting existing employees.
    4. Advertising vacant positions.

 

  1. Which of the following is not referred to as oral communication?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. Charts and graphs
    2. Meetings
    3. Conferences .
    4. The use of intercom

 

  1. Customs duty levied according to the weight of a product refers to   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. excise duty
    2. ad valorem duty
    3. specific duty
    4. export duty

 

  1. Marketing of a product begins with   [expand title=””]  B   is the answer -Business Management 2007 WASSCE   [/expand]
    1. promotion
    2. marketing research
    3. pricing a product
    4. employing market agent

 

  1. Which of the following functions of the central bank makes it the bankers’ bank?   [expand title=””]  A   is the answer -Business Management 2007 WASSCE   [/expand]
    1. When it gives advances to commercial banks.
    2. When it accepts deposits from all financial institutions.
    3. When it accepts deposits from commercial banks.
    4. When it accepts advances from insurance companies.

 

  1. One rule regarding consideration in law is that   [expand title=””]  C   is the answer -Business Management 2007 WASSCE   [/expand]
    1. it must be transferable to a third party.
    2. It should be adequate
    3. It should be capable of being valued.
    4. It must move from the promisor.

 

 

I’m sure you are going to evaluate your performance with regards to the objective questions above. Let me emphasize again that the answers to the objective questions can be found by clicking on the symbol (˅) just after the question.

Now let’s proceed to the Paper 2:

 

Business Management 2007 WASSCE-Past Questions and Answers- Paper 2

 

This paper a case study and nine other theory questions. Please read the case carefully before attempting the questions. As I have always,said, this Business Management questions and answers needs critical reading and understanding of the questions, most especially, the case. As I have always said, it is better to first answer the questions on your own before referring to the answer from the drop-down symbol.

Let me show you how to find the answers to the Business Management Questions – Paper 1, Section B. When you read a question, just click on this symbol (˅) beside it, and the answer will drop down for you. It is a very simple task.

 

CASE STUDY

Read the following case and answer the questions that follow:   [expand title=””]

TUDU COMPANY LIMITED

Tudu Company Limited was established in 1990 at Mattru Jong to manufacture palm products for sale in both the domestic and foreign markets.

The company now controls about fifty percent of the total palm products market in Sierra Leone with an annual sale of over Le20,000,000.

The increase in market share was as a result of the company’s sustained pursuit of pragmatic and innovative business strategies and policies.

Currently, the company is embarking on an expansion and diversification programme which requires the appointment of two senior management staff and additional capital to meet its challenges.

At a recent management meeting, approval was given for the recruitment of additional staff from outside the company and furthermore, mortgage and lease financing were agreed as the best options for raising the additional capital.

Tudu’s aggressive advertising methods and sales promotion strategies were aimed at all levels of income earners, especially those in urban areas. In recent times, Tudu Company has come under public criticisms over its advertising and sales promotion strategies.

Various stakeholders of the company have expressed mixed feelings about the promotion strategies. While shareholders and employees are praising the company for its positive responses to an increasingly competitive industry, other groups are unhappy with the deceptive and noisy advertising as well as aggressive sales promotion strategies.

A few months ago, the public relations officer of the company explained certain issues bordering on the company’s aggressive advertising strategies on one of the popular F.M. stations. This still did not go down well with some members of the public.

Management has therefore convened an emergency meeting to discuss and find solutions to the problems. At the management meeting, a committee was set up comprising a journalist, three management staff, the public relations officer, one social commentator and two opinion leaders from the community.

The committee is expected to examine the complaints of the stakeholders and make appropriate recommendations to management within two weeks.  [/expand]

 

1.(a) Identify three other stakeholders and state the interest of each.

Solution Suggested:   [expand title=””]

    1. Customers
    2. Suppliers
    3. Creditors
    4. Government
    5. Competitors
  1. The interest of customers is to maximize their utility or to receive value for their money and quality products. Quality and not shoddy goods is what customers expect from Tudu Company Ltd.
  2. Suppliers are people who provide the company with raw materials and other components which goes into production. Suppliers are interested in the prompt payment for the goods supplied.
  3. Creditors are individuals and financial institutions who give loans to Tudu Company Ltd. Creditors are interested in the. financial position of the company and the prompt settlement of debts.
  4. Government provides/enact laws for the protection of companies. Government therefore expects prompt payment of her taxes and adherence to her policies.
  5. Competitors are people who are in the same business. Fair or healthy competition is what competitors expect.  [/expand]

1.(b) What five advantages would the company derive by recruiting from external sources?

Solution Suggested:   [expand title=””]

  • It may bring in new knowledge and ideas into the company.
  • Qualified and suitable candidate is likely to be selected from a pool of experts. It promotes or creates goodwill for the company.
  • It challenges existing staff of the company to work hard.
  • Infighting for positions in the company will reduce or may be minimized.
  • Cost of training staff is low.  [/expand]

1.(c) Explain three benefits the company could derive from advertising.

Solution Suggested:   [expand title=””]

The benefits of advertising include:

  • It creates awareness about the existence or availability of goods and sere ices.
  • It creates new markets. That is, advertising leads to an increase in demand for the product or service
  • It educates consumers about the use(s) of the advertised product.
  • It persuades consumers to buy a particular product or service rather than others.  [/expand]

1.(d) Distinguish between a lease and a mortgage.

Solution Suggested:   [expand title=””]

A lease is an agreement between the owner of the property (lessor) to grant the use of the property to another party (lessee) for a specified period of time at a specified rent payable periodically. Examples of assets that can be leased include cars, office equipment, machinery, buildings and land.

A mortgage is a legal agreement conveying conditional ownership of assets such as security for a loan and becoming void when the debt is repaid. Or it is a legal agreement by which a bank or similar organizations (e.g., building societies and insurance companies) lends you money to buy a house and you pay the money back over a particular period of time. The lender is known as the mortgagee and the borrower is the mortgagor.  [/expand]

1.(e) Suggest two ways by which the criticisms against the company can be overcome.

Solution Suggested:   [expand title=””]

The criticisms levelled against Tudu Company could be overcome in the following ways:

  • The company should review its advertising or promotional strategy to make it less noisy.
  • It should be socially responsible by complying with the laws/regulations/norms/values of the society in which it operates.
  • It should create good public image or goodwill by undertaking public education.
  • The company can recruit qualified salesmen to sell its products.  [/expand]

2.(a) Identify and explain three objectives of a business organization.

Solution Suggested:   [expand title=””]

  1. Profitability
  2. Growth/Expansion
  3. Survival
  4. Social Responsibility
  5. Employment

 

  1. Profit: -This is the primary objective of a business. Starting a business is a financial andprofessional commitment and every businessman aims at earning a reasonable returns on funds The survival and growth of a business depends on the ability of the business to generate and sustain profits. Nobody would set up a business with the intention of incurring loses. Thus there should be excess of total revenue over total cost to compensate the businessman for the risk he has undertaken. It is important to state here that without enough profit a firm cannot buy modern technology and even plough back funds into the business to help increase its competitiveness. Constant profit therefore ensures improvement in the quality of goods produced and services offered.
  2. Survival: -This is a very important objective of a business because no business Can accomplish its goals if it does not survive. Survival has to do with the ability of a business to remain in operation not withstanding the problems, difficulties or obstacles. A business must however be profitable to survive.
  3. Growth and Expansion: -This is another important objective of a business. For a business toexpand and cope with competition, it needs to grow. Thus a sole proprietorship must grow to become a partnership or a small-scale business must grow to become a large-scale business. Growth in business is determined by factors like technological development and the State of the economy. It also relates to an increase in net assets, number of employees and market share.
  4. Employees’ Interest: -Employees are the workers of a business. Many businesses show great concern towards employees’ interest by giving them fair remuneration packages and fringe benefits.They also provide them with health, welfare and catering services in order to attract and retain qualified employees.
  5. Contribution to Social Progress to succeed: Many business organisations have made it theirobjective to contribute to social progress. They contribute towards the development of the society by building schools, providing vehicles, library books, science equipment, etc. For instance, the Volta Aluminium Company (VALCO) has gone a long way to assist many educational institutions in the country by providing them with means of transport. Volta and VALCO Halls of the University of Ghana and University of Cape Coast respectively were also financed by VALCO.
  6. Produce Economic goods/services: – Another objective of a business is to produce economicgoods and services at a reasonable cost for the society. Manufacturing firms may therefore aim at producing tangible products such as cars, electrical gadgets, detergents etc. at a reasonable cost. Banking, insurance and health services could also be provided by service firms.
  7. Employment: – Some firms may also aim at creating employment avenues for the ever-growing population. In Ghana, for instance, many public enterprises were set up to provide employment for the ever growing Ghanaian population, e.g. GNTC.  [/expand]

 2.(b) Explain three factors that can influence the location of a business.

Solution Suggested:   [expand title=””]

Location of a business may be defined simply as the siting of an establishment or a firm in a particular place. Many factors are considered before a business is located in an area. These factors include:

  • Availability of Market:This refers to the availability of consumers of a given product. There should be ready market for the products or goods of any business/firm to be sited in a place. A business may therefore be set up in an area where there is large demand for its products.
  • Nearness to Source of Power: There should be ready and dependable source of power, e.g., electricity. Since most businesses operate effectively with the help of electricity and other amenities, it should be located where these amenities are available.
  • (iii)Nearness to Raw Materials: In order to reduce cost of transportation, business should be established near the source of raw materials. Perishable goods like fruits, palm oil industries etc. should be located near their raw materials.
  • Adequate transport network:Adequate transport is required to convey all raw materials to business site and also move finished goods to the market or areas of consumption/use.
  • Political Stability:A stable government encourages business or industrial growth and attracts foreign investors. Wars and conflicts discourage industrial growth.
  • Favourable Climate: There should be favourable climatic conditions for business to grow.
  • Availability of labour:There should be quality skilled labour. There should also be enough unskilled labour. A business may be set up in a location where labour both skilled and unskilled is available.  [/expand]

 

3.(a) What is money?

Solution Suggested:   [expand title=””]

Money may be defined as anything that is generally accepted as -payment for goods and services and in the settlement of debts.

3.(b) State five qualities of money.

Solution Suggested:   [expand title=””]

  • Five main qualities of money include the following:
  • Acceptability: Money must be acceptable. In order for money to be considered as
    a good medium of exchange, people must have confidence in it to enable them readily accept it.
  • Portability: Money must be portable. Anything that is used as money must be easy to carry about without facing any problems or difficulties, hence the use of more paper money than coins.
  • Divisibility: In order i-,~ risure that goods can be bought in small and large quantities,there is the need for mo Lc) be capable of being divided into smaller units.
  • Durability: For money to perfori ‘Itnction effectively, it must be durable. That is
    it should not wear out quickly or be strayed within a shorter period. Money must be able to last without any deterioratio
  • Homogeneity: Money must be homogenous. A unit in each denomination should
    be the same as any other unit in the same denomination, e.g. a hundred cedis note in Accra should be the same as a hundred cedis note in Bolgatanga.
  • Scarcity: Money must not be too much in an economy in order to maintain its
    This is because if it is abundant in the economy it may lose its value.  [/expand]

3.(c) Explain four functions of money.

Solution Suggested:   [expand title=””]

  • Medium of Exchange: This is the primary function of money. Medium of exchange
    means money enables people to exchange it for goods and services. It is therefore a means of making payments. It follows that money has claim on goods and services so that once one has money he can exchange it for any commodity. The medium of exchange function facilitates the process of business transaction and eliminates the problem of double coincidence of wants under barter.
  • Store of Value: Money is a handy way to store wealth since it is portable. With the help of money, we are able to keep wealth for quite a long time without wastage or physical deterioration once it is durable. If one finds keeping or storing assets difficult, he only has to convert them into cash and store it. For money to function effectively as store of value, it must be stable in value. During inflation, money becomes inefficient as a store of value since the value of money will decline.
  • A unit of account or measure of value: Money serves as a common denominator with which we measure the relative value of commodities. Money is the standard of measuring value. Money determines the rate of exchange between and among goods, which was a problem under barter. We are therefore able to compare goods by looking at their relative prices. By serving as a measure of value, money helps to calculate the value of goods and services and thus enables the total value of goods and services to be estimated.
  • A Standard of Deferred Payment: With the introduction of money, it has become easy to buy goods and services today and pay for them later. Hence money makes it possible to conduct business on credit basis. Payment for goods and services can be transferred to a future date, e.g., loans are granted to farmers and businessmen and repayment made later.  [/expand]

 

4.(a) What is a negotiable instrument?

Solution Suggested:   [expand title=””]

A Negotiable instrument is an unconditional order or promise to pay an amount of money, easily transferable from one person to another. It establishes how much a person owes and is owed and it is a convenient and safe way of carrying money with a minimum degree of risk, e.g. cheque book.  [/expand]

4.(b) State four characteristics of a negotiable instrument.

Solution Suggested:   [expand title=””]

  • It must be transferable from one person to another by delivery and endorsement.
  • The holder for the time being can sue in his own name.
  • Holders do not have to give notice of transfer
  • Holders are free from defects on them.  [/expand]

4.(c) Differentiate between a crossed cheque and a stale cheque.

Solution Suggested:   [expand title=””]

A Crossed Cheque is a cheque that has two transverse parallel lines drawn across its face preventing it from being cashed across the counter of a work. It must be paid into an account.

A Stale Cheque, on the other hand, is a cheque which is invalid because it has expired. That is, the cheque has been issued or drawn for more than six months but has not been presented for payment.  [/expand]

4.(d) Explain five reasons why a cheque may be dishonoured.

Solution Suggested:   [expand title=””]

  • The cheque may be wrongly made out. That is the words and the figures of the money to be
    paid may vary.
  • When the amount written on the cheque is greater than the amount in the account of the drawer.
  • The signature on the cheque may not correspond with the specimen held by the bank .
  • Where the cheque is not dated.
  • An alteration on the cheque, which requires authentication by the drawer.
  • Payment may be stopped by order of the drawer.
  • If it is a post dated cheque and presented to the bank before the due date.
  • If the name on the back of the cheque does not correspond with the payee’s name on the front (irregular endorsement).
  • Notice of death of drawer by the bank.
  • Insanity or bankruptcy of the drawer.
  • Garnishee order (an order by the court not to pay).  [/expand]

 

5.(a) What is non-verbal communication?

Solution Suggested:   [expand title=””]

Communication can also be done through the use of non-verbal means. Non-verbal communication includes all communications which do not involve the use of words either verbal or written form. It is the use of symbols, gestures, body language, postures or facial expressions to send messages.  [/expand]

5. (b) Explain five importance of communication in business.

Solution Suggested:   [expand title=””]

The following are the importance of communication:

  • Workers’ problems and grievances can be made known to management through Communication.
  • Communication makes it possible for management to give instructions to lower level workers to work.
  • Communication helps workers to know all decisions taken by management that really affect them and the firm as a whole.
  • Through communication, a report on work done is sent to management for control purposes.
  • Communication makes it possible for workers to make suggestions or decisions to management as to the best method of work.
  • It is a means of making possible induction training and other forms of training and education.
  • In the case of a limited liability company, communication helps shareholders to know how their shares are managed and the returns thereof.
  • When communication is effective, it tends to encourage better performance and job satisfaction. People understand their jobs better and feel more involved in them.
  • Workers’ problems and grievances can be made known to management through Communication makes it possible for management to give instructions to lower level workers to work.
  • Communication helps workers to know all decisions taken by management that really affect them and the firm as a whole.
  • Through communication, a report on work done is sent to management for control purposes.
  • (x i) Communication makes it possible for workers to make suggestions or decisions to management as to the best method of work.
  • It is a means of making possible induction training and other forms of training and education.
  • In the case of a limited liability company, communication helps shareholders to know how their shares are managed and the returns thereof.
  • When communication is effective, it tends to encourage better performance and job satisfaction. People understand their jobs better and feel more involved in them.  [/expand]

 

6(a) Distinguish between a commercial bank and a stock exchange.

Solution Suggested:   [expand title=””]

A commercial bank is a financial institution whose main aim is to make profit for its shareholders. Commercial banks are joint stock financial institutions whose business is to collect funds or money and other valuables from the public for safe keeping and make them available to their respective owners when required.

The stock exchange on the hand is a capital market for trading in long-term funds or capital. It provides the means for the moblization of capital funds for growth and development. It is a place where transactions for bonds/stocks or securities are done through brokers. It therefore provides a link between buyers and sellers of securities.  [/expand]

6(b) Explain five functions of a commercial bank.

Solution Suggested:   [expand title=””]

The following functions are performed by Commercial banks in the development of Ghana’s economy:

  • Commercial Banks accept deposits from the general public including savings account, Deposit account and current account. They therefore provide a safe place for keeping customer’s money.
  • Commercial banks grant credit facilities to their customers in the forms of loans and overdrafts. They therefore provide businessmen with money to finance their activities.
  • Commercial banks apart from keeping money also keep customers valuables such as wills, certificates, life policies, securities as well as title deeds.
  • Commercial banks make payments on behalf of their customers upon the written. consent of the customers. They also receive dividends and other monies on behalf of their customers.
  • Commercial banks serve as trustees and referees for their customers, recommending such customers when necessary to other banks.
  • Commercial banks also reduce unemployment by employing people.
  • They also provide export advice on investment and business opportunities to their customers.  [/expand]

 

7.(a) Explain five benefits businesses derive from the use of computers.

Solution Suggested:   [expand title=””]

  • They are flexible in use and can be programmed or manipulated so that a number of
    operations can be carried out.
  • Computers maintain a high standard of accuracy and efficiency in processing and
  • analysing data.
  • Computers function as storage units for information. ‘I hey have the ability to store
    enormous files of information and retrieve information as and when necessary.
  • A computer can carry out complex and complicated exercises at a very high speed than
    can be done manually.
  • Computers relieve qualified and entrepreneurial manpower from routine work.
  • With the use of a computer, data security can be maintained through the use of  [/expand]

7.(b) Mention five disadvantages in the use of computers.

Solution Suggested:   [expand title=””]

Disadvantages of the use of computer include:

  • Large capital is required to be invested in the purchase and installation of a computer.
  • t also involves high maintenance and repair cost.
  • There is scarcity of qualified computer experts with the requisite training to operate the
    computer effectively and efficiently.
  • Computers render some clerical staff redundant. Displacement of clerical staff leads to
    fear and resentment among staff and therefore possible low morale.
  • In the event of computer breakdown, work slows down and back log of work is created
    which could take time to get done.
  • Virus infection may lead to loss of information or data.  [/expand]

8.(a) Explain the following measures for restricting international trade:

  • tariff,
  • quota

Solution Suggested:   [expand title=””]

  • Tariff: – This is the tax imposed on commodity imported. They may be levied on an ad valorem basis, i.e., as a certain percentage of value, or on a specific basis, i.e., as an amount per unit.  [/expand]

Solution Suggested:   [expand title=””]

  • Quota: – This is the quantitative limits placed on the importation of specified commodities. Quotas can also be used to favour preferred sources of supply. Quota is therefore the direct restriction to the quantity of goods that may be imported in to the country.  [/expand]

 8.(b) Explain three problems and two benefits of international trade.

Solution Suggested:   [expand title=””]

The problems associated with International Trade are as follows:

  • Language barriers:- Different languages are spoken by different countries all over the
    It is very difficult for businessmen who speak different languages to communicate effectively and thus cannot do business with each other. It is also difficult for them to get an agent who can trade in both languages.
  • The problem of operational currency:- Differences in currencies is another obstacle to international trade. It is not every currency which is accepted in international trade. Thus if for instance Ghana wants to do business with U. K. (Britain) or America, she must first convert the cedis into pound sterling or dollars.
  • Trade regulations:- Trade regulations also hinder international trade. Such regulations include artificial barriers such as tariffs, quotas, prohibitions, etc. hinder international business. These measures sometimes frustrate exporters and importers and thus discourage them from increasing their trading activities.
  • The Financial problems:- Exporters and importers lack financial assistance. Hence they cannot conduct effective market research to find the most suitable markets. Lack of adequate market information about foreign country could lead to failure in business.
  • Cultural Factors:- The existence of different cultural practices creates a problem in international trade. Culture which is the way of life of people in a particular locality can affect the demand for a product. Their beliefs, likes and tastes determine the demand for a foreign product. It also makes advertising and distribution of foreign products difficult.
  • Different political and legal systems:- The political atmosphere goes to a larger extent to determine the extensity of international trade. Where the political system is stable, many investors come in to invest. But where the system is unstable, less foreign investment is undertaken. Besides that, the legal system affects it in the sense that if the system is favourably exposed to the trade, it flourishes and vice versa.  [/expand]

Solution Suggested:   [expand title=””]

Benefits associated with International Trade are:

  • It Widens/Expands the Market:- International trade widens the extent of a country’s
    Countries will no more be limited to their domestic markets. They have many foreign markets to sell their goods when they engage in international trade. For example, because of international trade, Ghana is able to sell goods in United Kingdom, France, Germany, Belgium and others.
  • Countries Enjoy Variety of Goods:- International trade enables countries to enjoy
    different kinds of goods including those they cannot produce themselves.
  • Foreign Exchange Earnings:- International trade is seen as a source of foreign exchange and hence enables countries to earn enough foreign exchange needed to finance projects meant to speed up the rate of economic growth and development. For example, because of international trade, Ghana is able to earn $1,270m in 1994 from exports.
  • Reduces Unemployment Problems:- International trade helps in reducing unemployment problems or opens up employment avenues both directly and indirectly. Since international trade leads to efficient allocation of resources and optimal utilization of scarce resources, resources, which might have been lying idle, would be employed. Labour from one country can be employed in another country.
  • Sources of Government Revenue:- International trade enables countries to raise
    enough revenue needed to finance development projects. This revenue can be realized through the imposition of export and import duties. For example, in 1995 taxes from international trade accounted for 28% of total government revenue. (Ministry of Finance, Policy Analysis Division).
  • Specialization:- International trade makes international specialization possible and
    hence leading to increase production at a reduced cost. This will enable producers to sell their goods at a reduced price in order to ensure constant demand.  [/expand]

 

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