Questions

Q1.

Define the term limited liability.

(1)
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(Total for question = 1 mark)

(QU01b 4BS1/01, June 2023)

Q2.

Define the term multinational business.

(1)
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(Total for question = 1 mark)

(Q03a 4BS1/02R, June 2019)

Q3.

Define the term public corporation.

(1)
.............................................................................................................................................

.............................................................................................................................................

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(Total for question = 1 mark)

 (QU01c 4BS1/02, June 2022)

Q4.

Define the term public limited company.

(1)
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(Total for question = 1 mark)

(Q03a 4BS1/02, Nov 2023)

Q5.

Define the term social enterprise.

(1)
.............................................................................................................................................

.............................................................................................................................................

.............................................................................................................................................

(Total for question = 1 mark)

(QU01c 4BS1/01, June 2023)

Q6.

Define the term social enterprise.

(1)
.............................................................................................................................................

.............................................................................................................................................

.............................................................................................................................................

(Total for Question = 1 mark)

 (Q01b 4BS1/02, Nov 2020)

Q7.

Define the term sole trader.

(1)
.............................................................................................................................................

.............................................................................................................................................

.............................................................................................................................................

(Total for question = 1 mark)

(Total for question = 3 marks)

(Q01b 4BS1/02, Nov 2021)

Q8.

Answer the question with a cross in the box you think is correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

Hans Raj Mahajan Worldwide (HRMW) is an established manufacturer of sports equipment and
sportswear in India. It is a family-run business, which started trading in 1925 and since then has grown to
become an established business. Its products are exported across the world. These include footballs,
boxing gloves, hockey sticks and sports clothing.

(i) Which one of the following is the meaning of production?

Select one answer.
(1)
A Provision of services
B Exchange of goods
C Extraction of raw materials
D Manufacture of finished goods

(ii) Which one of the following is a benefit to a person of buying a franchise?

Select one answer.
(1)
A The person can buy supplies from any supplier
 B The person is given support from an established business
C The person is guaranteed a set wage
D The person shares their profits with the franchisee

(Q01a 4BS1/02R, Nov 2020)

Q9.

Answer the question with a cross in the box you think is correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

Cadbury was founded in 1842 when John Cadbury opened a shop in Birmingham in the UK. The shop
sold cocoa and drinking chocolate. Cadbury is now one of the major chocolate manufacturers in the
world.

In 1918 the first overseas Cadbury factory was opened in Hobart, Tasmania in Australia. Another factory
opened in South Africa in 1938. Cadbury chocolates are sold across the world and other factories have
been opened. Cadbury produces many well-known brands, such as Dairy Milk, Buttons and Crunchie. It
also produces ice cream and cakes.

Cadbury is now part of Mondelez, the largest snack business in the world.

(i) Which one of the following types of business ownership would usually be formed by a business of two
solicitors?
Select one answer.
(1)
A Sole trader
B Partnership
C Public Corporation
D Public Limited Company

(iv) Which one of the following functional areas would a skilled machinist work in?
Select one answer.
(1)
A Finance
B Human Resources
C Production
D Marketing

Q10.
Answer the question with a cross in the box you think is correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

Loaf, a bakery and cookery school, was set up by Tom Baker in Birmingham, UK. The aim is to promote
real food and healthy living. It wants to use its skilled chefs to bring real food to the kitchens of the local
community. It uses its cookery courses and bakery to help restore the local high street. Loaf also hosts
pop-up events (one-off events) in different parts of the city where it shows off its products. Any profit
made through these events is directed towards furthering Loaf's charitable work.

Loaf operates a scheme called 'Waste Not'. At the end of the day Loaf donates any leftover food to
charities who distribute it to local people. In addition, Loaf provides a recycling hub for the local
community.

Loaf is a social enterprise with nine members of staff; six of whom are directors.

(i) Which one of the following is a non-financial business objective?

(1)
Select one answer.
A Profit
B Sales
C Market share
D Personal satisfaction

Q13.

Answer the question with a cross in the box you think is correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

IKEA is a well-known home furniture retailer with stores throughout the world. It was started in 1943 by
Ingvar Kamprad when he was given some money by his father for doing well at school. He wanted to
produce furniture at a price that people could afford to buy.

He realised that transporting furniture to customers was difficult as goods were often damaged. He
developed flat packs to avoid damage. A flat pack contained all the materials needed to self-assemble a
table, a chair or a bed.

All IKEA stores are run as franchises.

(i) Which one of the following is a financial business objective?

Select one answer.
(1)
A Challenge
B Social objectives
 C Survival
D Personal satisfaction

Q14.

Huawei is a leading global provider of information and communications technology, infrastructure and
smart devices. In March 2011, over one million of its C8500 smartphones were sold in China following its
launch.

It now manufactures a wide variety of different products including Huawei smartphones, watches and
tablets. In recent years Huawei has won many awards. In 2018 it was named the 68th most valuable
brand by Best Global Brands. In 2019 it introduced a smartphone which had new photographic
technology.

(ii) Which one of the following is a financial objective?

(1)
Select one answer.
A Personal satisfaction
B Market share
C Independence
D Control

(Q01a 4BS1/02, Nov 2021)

Q15.

Answer the questions with a cross in the boxes you think are correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

In 1985 Emirates started its airline business with just two aircraft. It is now a well-known airline with over
265 aircraft flying to over 180 destinations around the world.

Emirates has won many awards for service and reliability. Until 2016 passengers rated Emirates the
leading airline to travel with. However, in 2017 its rating dropped from first to fourth.

(i) Which one of the following only applies to a public limited company?
(1)
Select one answer.
A Controlled by the government
B Shares are traded on the stock exchange
C A maximum of 50 shareholders
 D Restriction in the transfer of shares

(ii) Which one of the following departments would send an invoice to a supplier?
(1)
Select one answer.
A Human resources
B Marketing
C Finance
D Production

Q16.

Apple is a US technology company specialising in branded devices such as iPods,

iPads and iPhones. These brands are well known around the world. In 2015,
Apple was recognised as the most valuable global brand by Interbrand (a market
research group).

In 2016, revenue from Apple products fell for the first time in over ten years.
To improve profitability, Apple now intends to focus on its new products, such as the
Apple watch. Following the collection of primary market research, Apple have also
improved their social media presence and now provide advice and customer support
using Twitter.

(i) Which of the following is a reason why a business would advertise its
products?
(1)
A To shorten the product life cycle
B To create customer loyalty
C To identify gaps in the market
D To create employment

(ii) Which of the following describes a person who pays to use another business's
products and branding?
(1)
A Franchisor
B Entrepreneur
C Franchisee
D Shareholder
Q17.

Answer the questions with a cross in the boxes you think are correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .
Backyard Shoez is a retail business located in Nairobi, Kenya. It sells a wide range of
shoes, handbags and accessories for ladies only. Backyard Shoez has three shops in
Nairobi. The shops are located in a busy shopping centre where there are other
shoe shops.

(Source adapted from: https://backyardshoez.co.ke/)

(ii) Which one of the following could be a financial objective for the owners of Backyard Shoez?
(1)
Select one answer.
A Personal satisfaction
B Increased production quality
C Increased market share
D Loyal employees

(iii) Which one of the following is an external source of finance for the owner of a business?
(1)
Select one answer.
A Bank loan
B Retained profit
C Personal savings
D Selling assets

Q18.

Answer the questions with a cross in the boxes you think are correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

Haji Biriyani is a restaurant group located in Dhaka, Bangladesh. The business was started in 1939 by
Haji Mohammed Hossain. The restaurant group now has three restaurants in Dhaka. It is famous for
selling Biriyani, a mixed rice dish containing mutton and spices such as black peppercorns and cinnamon.

(iii) Which of the following could be a non-financial objective for the owner of a business?
(1)
A Improved chance of survival
B Increased market share
C Personal satisfaction
D Increased profit

(iv) Which of the following is a measure of the liquidity of a business?

(1)
A Net cash flow
B Profit
 C Revenue
D Total costs

Q19.

Answer the questions with a cross in the boxes you think are correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .

The Alternative Drum School (TADS) was set up in the wealthy area of Cricklade, England in 2008 by
Ollie Tanner who had a passion for and enjoyed drumming. Ollie invested all of his savings into the
drumming school. He saw the potential of being located away from other drumming schools.

Ollie promotes his business by writing columns in local papers, performing at local music festivals and by
word of mouth recommendations. He has invested heavily in computer technology to allow students to
produce the music they enjoy playing.

Ollie finds it difficult to maintain a good work-life balance. Ollie currently works 60 hours a week in a
business that does not have reliable profits.

(i) Which one of the following could a sole trader pay on its profits?
(1)
Select one answer.
A Sales tax
B Income tax
C Corporation tax
D Indirect tax

(iv) Which one of the following is used to calculate net cash flow?
(1)
Select one answer.
A Total cash inflow − total cash outflow
B Total cash inflow & total cash outflow
C Opening balance − closing balance
D Opening balance & closing balance

Q20.

Answer the questions with a cross in the boxes you think are correct . If you change your mind
about an answer, put a line through the box and then mark your new answer with a cross .
NEXT is a well-known clothing retailer that operates in 70 countries and employs over 43,000 employees.
Since NEXT commenced trading it has introduced many other products to its range such as home
interiors, flowers and a wedding list service.

In 1999 NEXT launched its own online shopping platform, enabling customers to purchase its products
where ever they live. It continues to improve its customer service by introducing new initiatives such as
next day delivery.

NEXT mainly uses its own factories for production. However, it does purchase some clothes such as
ladies dresses from Turkish factories.

(vi) Which one of the following is a benefit of buying a franchise?

(1)
Select one answer.
A The franchisor provides training to the franchisee
B A franchisee pays a lower rate of Value Added Tax (VAT)
C The franchisor pays the franchisee to set up in business
D A franchisee makes all his/her own decisions

Q21.

Loaf, a bakery and cookery school, was set up by Tom Baker in Birmingham, UK. The aim is to promote
real food and healthy living. It wants to use its skilled chefs to bring real food to the kitchens of the local
community. It uses its cookery courses and bakery to help restore the local high street. Loaf also hosts
pop-up events (one-off events) in different parts of the city where it shows off its products. Any profit
made through these events is directed towards furthering Loaf's charitable work.

Loaf operates a scheme called 'Waste Not'. At the end of the day Loaf donates any leftover food to
charities who distribute it to local people. In addition, Loaf provides a recycling hub for the local
community.

Loaf is a social enterprise with nine members of staff; six of whom are directors.

State one reason why Tom Baker set up his business as a social enterprise.
(1)
.............................................................................................................................................

.............................................................................................................................................

.............................................................................................................................................

(Total for question = 1 mark)

(Q01d 4BS1/01R, Nov 2020)

Q22.
Explain one method a small business might use to increase its profit.
(3)
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(Total for question = 3 marks)

(Q01f 4BS1/01R, Nov 2020)

Q23.

Explain one disadvantage of being in a partnership.

(3)
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(Total for Question = 3 marks)

 (Q01f 4BS1/01, Nov 2020)

Q24.

As We Grow (AWG) is a clothing business in Iceland. The social objective of the business is to use
natural materials, such as wool, and produce environmentally friendly products. It aims to design clothes
that will last a long time, to encourage families to buy fewer clothes and reduce waste in society.

AWG's increasing product range now includes jumpers, dresses, shirts and baby clothes. These are
produced in small workshops that employ family and friends. Waste is kept to a minimum and any leftover
material is used to make scarves and hats. The business has one store in Iceland. It uses its website to
advertise and sell its clothing online to customers in other countries. The business has received the
Icelandic Design Award for its contribution to the environment.

Explain one benefit to a business that operates as a sole trader.

(3)
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(Total for question = 3 marks)

(Q01f 4BS1/01, Nov 2023)

Q25.

Explain one benefit to a business of being a partnership.

(3)
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.............................................................................................................................................

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(Total for question = 3 marks)

(Q02c 4BS1/01, Nov 2021)

Q26.

The Better Toy Store (TBTS) is a children's toy shop. TBTS has three shops in Singapore. Two of the
shops are located in busy shopping malls and the third is located at the Jewel Changi Airport. TBTS has a
website for customers looking to buy toys online.

TBTS selects toys to sell that are excellent for play, value, design and quality. All TBTS toys are
environmentally friendly.

Explain one advantage of being a sole trader.

(3)
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.............................................................................................................................................

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(Total for question = 3 marks)

 (QU01f 4BS1/01, June 2022)

Q27.

Explain one advantage of being a franchisee.

(3)
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.............................................................................................................................................

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(Total for question = 3 marks)

(Q01f 4BS1/01R, June 2019)

Q28.

Define the term stakeholder.

(1)
.............................................................................................................................................

.............................................................................................................................................

.............................................................................................................................................

(Q01a 4BS1/02, June 2021)

Mark Scheme

Q1.
 (QU01b 4BS1/01, June 2023)

Q2.

(Q03a 4BS1/02R, June 2019)

Q3.
 (QU01c 4BS1/02, June 2022)

Q4.

(Q03a 4BS1/02, Nov 2023)

Q5.

(QU01c 4BS1/01, June 2023)

Q6.
 (Q01b 4BS1/02, Nov 2020)

Q7.

(Q01b 4BS1/02, Nov 2021)

Q8.
 (Q01a 4BS1/02R, Nov 2020)

Q9.
 (Q01a 4BS1/02R, June 2022)

Q10.
 (Q01a 4BS1/02, Nov 2023)

Q13.
Q14.
 (Q01a 4BS1/02, Nov 2021)

Q15.

(Q01a 4BS1/02, Nov 2020)

Q16.

(Q01a 4BS1/02, SAM 0)

Q17.
 (Q01a 4BS1/01, June 2019)

Q18.

(Q01a 4BS1/01, SAM 0)

Q19.
 (Q01a 4BS1/01, Nov 2020)

Q20.
 (Q01a 4BS1/02, June 2021)
Q21.

(Q01d 4BS1/01R, Nov 2020)

Q22.
 (Q01f 4BS1/01R, Nov 2020)

Q23.

(Q01f 4BS1/01, Nov 2020)

Q24.

(Q01f 4BS1/01, Nov 2023)

Q25.
 (Q02c 4BS1/01, Nov 2021)

Q26.
 (QU01f 4BS1/01, June 2022)

Q27.

(Q01f 4BS1/01R, June 2019)

Q28.

(Q01c 4BS1/01, Nov 2020)