WAEC SSCE - Commerce - 2019

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An instruction to a bank to make regular payments to a third party on behalf of a customer is called a standing order. This is a type of payment arrangement where the customer provides their bank with instructions to transfer a fixed amount of money at regular intervals, such as weekly or monthly, to another person or organization. Standing orders are often used for recurring payments, such as rent, mortgage payments, or utility bills. They provide a convenient way to automate regular payments without the need for manual intervention each time. The customer sets up the standing order with their bank, specifying the amount to be paid, the frequency of the payments, and the recipient's details. The bank then carries out the payment automatically on the specified dates. It's important to note that a standing order is different from a direct debit, which allows a third party to automatically collect varying amounts from the customer's account on specific dates. With a standing order, the customer retains control over the amount and timing of the payments.

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Advertising increases the demand for goods and services by promoting them to potential customers. When companies advertise their products or services, they aim to make people aware of what they have to offer and persuade them to buy them. This increased awareness and persuasion can lead to an increase in demand for the advertised goods and services. Banking, transportation, and warehousing are all important activities in the economy, but they do not directly increase demand for goods and services. Banking facilitates the transfer of funds, while transportation moves goods from one place to another, and warehousing stores goods until they are ready to be sold. While these activities are necessary for a functioning economy, they do not create new demand for goods and services in the same way that advertising does.

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A stock exchange broker is engaged in a commercial occupation. A stock exchange broker is a professional who buys and sells stocks, bonds, and other securities on behalf of clients. They work in the financial industry and are responsible for executing trades, managing investments, and offering advice on investment strategies. Their primary goal is to help clients make informed investment decisions and grow their wealth. In summary, a stock exchange broker is not involved in construction, extractive, or manufacturing work. Instead, they work in the commercial sector, specifically in finance and investing.

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The components of "cash in hand and at bank, plus debtors" are "current assets". Current assets are items that a company owns and can be converted into cash within one year or less. Cash in hand and at bank refers to the physical cash that the company has on hand or the cash that it has deposited in a bank account. Debtors are individuals or companies that owe money to the company and are expected to pay within a year. By adding the value of these items together, we get the total value of the company's current assets. These assets are important because they provide the company with liquidity, which means it has the ability to meet its short-term financial obligations, such as paying its bills and meeting its payroll. Other examples of current assets include inventory, prepaid expenses, and short-term investments. In contrast, intangible assets are non-physical assets that cannot be easily converted into cash, such as patents or goodwill, while current liabilities refer to debts that must be paid within a year or less. Finally, depleting assets are those that are consumed or used up over time, such as natural resources.

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The headquarters of the Mano River Union is located in Freetown, Sierra Leone. The Mano River Union is a regional organization that was established in 1973 by the leaders of Liberia and Sierra Leone to promote economic cooperation and integration among their countries. Guinea later joined the organization in 1980. The organization is named after the Mano River, which flows through the three member countries. The Mano River Union has a number of objectives, including promoting economic development, improving infrastructure, and enhancing regional security. The headquarters of the Mano River Union is located in Freetown, Sierra Leone's capital city. This is where the organization's main administrative functions are carried out, and where member countries meet to discuss and plan their activities.

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XYZ Bank of Commerce PLC is the drawee in a transaction. The term "drawee" refers to a bank or financial institution that is responsible for paying a check or draft when it is presented for payment. In other words, the drawee is the bank that holds the account to which the check or draft is written and is responsible for paying the amount specified on the check or draft. In the context of XYZ Bank of Commerce PLC, it would be the bank that would be responsible for paying out funds to the payee if a check or draft was written to them.

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Computer manufacturers in an area could form a producer association. A producer association is an organization formed by producers or manufacturers of a particular product or group of products. The main purpose of a producer association is to promote the interests of its members and to improve their economic and social conditions. In the case of computer manufacturers, a producer association could provide a platform for them to share knowledge, resources, and expertise, and to collectively address issues that affect their industry, such as government regulations, trade policies, and technological developments. By working together, the members of a producer association can leverage their collective strength to achieve greater success and sustainability.

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Retail outlets that sell from vehicles are called "mobile shops." Mobile shops are retail outlets that operate from vehicles such as vans, trucks, or trailers. They can sell a variety of products, from food and beverages to clothing, electronics, and more. Mobile shops can be found in various locations, such as on the streets, at fairs, festivals, and other events, or in designated areas such as parking lots. Mobile shops are popular because they offer convenience and flexibility to both the seller and the customer. They can easily move from one location to another, allowing them to reach a wider audience and sell in areas where traditional stores may not be available. Other types of retail outlets include: - Supermarkets: Large stores that sell a wide range of products, such as groceries, household items, and electronics. - Departmental stores: Large stores that sell a variety of products, such as clothing, furniture, and household items. - Chain stores: Retail outlets that are part of a larger chain of stores, selling similar products and following the same branding and marketing strategies.

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Rent is the return on land. It refers to the payment made to the owner of land for its use. The owner of the land earns rent simply by virtue of owning the land, and not from any effort or investment on their part. The amount of rent is determined by factors such as the location, size, and quality of the land, as well as the demand for its use. Rent is an example of a factor of production, which is a resource used in the production of goods and services. Unlike wages, which are the return on labor, or interest, which is the return on a loan, rent is the return on the use of a specific factor of production, namely land.

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A diagram showing the positions of the structure of a company is called an organizational chart. An organizational chart is a visual representation of the hierarchy and structure of a company. It displays the different positions and job roles in the organization and how they relate to each other. The chart typically shows the top-level executives at the top, with lower-level managers and employees further down. It may also show the different departments or functional areas of the company and how they are organized. The chart helps to provide a clear understanding of the company's structure and the roles and responsibilities of its employees.

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The combination of business activities of Abbas Ltd and Denko Ltd to form one large company is called an amalgamation. An amalgamation is a process in which two or more companies merge their business operations to form a new entity, which can either be a new company or an existing one. In this case, Abbas Ltd and Denko Ltd are coming together to form a new company that will incorporate the business activities of both firms. This process is also known as a merger or a consolidation.

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A partner whose only contribution to the partnership is his name and goodwill is known as a nominal partner or a sleeping partner. A nominal partner does not actively participate in the management of the partnership business, but their name and reputation are used to help attract customers and increase the credibility of the business. The nominal partner may receive a share of the profits, but they do not have any control over the day-to-day operations or financial decisions of the business. This type of partnership arrangement is different from an active partner, who is involved in the management and decision-making of the business, and a limited partner, who provides financial contributions to the partnership but does not participate in the management.

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Goods sold under a distinctive trademark are "branded goods." A trademark is a symbol, design, or word that distinguishes one company's products from another's. When goods are sold under a trademark, they are known as branded goods. This means that the company has placed its brand on the product, which helps customers easily identify the product and associate it with the company. Branded goods can range from everyday items like clothing and food to luxury goods like designer handbags and jewelry.

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The communication equipment stationed in space for sending signals is called a satellite. A satellite is an object that orbits around the Earth, and it can receive signals from a ground station and then retransmit them to another location on Earth. Satellites are used for a variety of purposes, such as providing television and radio broadcasts, facilitating long-distance telephone calls, and enabling global positioning services. Satellites are essential for modern communication, and they have revolutionized the way people connect with each other across the world.

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A customer who wishes to withdraw an amount greater than the balance in his current account would apply for an overdraft. An overdraft is a type of loan that allows a customer to spend more money than they have in their account, up to a certain limit set by their bank. This type of loan is often used to cover unexpected expenses or to make purchases when there is not enough money in the account. The customer is then required to repay the overdraft, usually with interest, once their account balance is back in the positive. An overdraft is different from a loan, which is a set amount of money that a customer borrows and must repay over a fixed period of time, and a credit transfer, which is a transfer of funds from one account to another.

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A counter offer is a new offer made in response to an original offer, which terminates the original offer. It essentially rejects the terms of the original offer and proposes new terms. Once a counter offer is made, the original offer is no longer valid and cannot be accepted unless the counter offer is rejected. Therefore, a counter offer terminates the original offer.

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The management term that refers to the number of staff a superior officer can efficiently supervise is called "span of control." Span of control is the number of subordinates that a manager or supervisor can effectively manage and oversee. It is also referred to as the "span of management." A manager's span of control can be affected by a number of factors, including the complexity of the work, the level of experience and competence of the subordinates, the degree of autonomy given to subordinates, and the nature of the communication and interaction required between the manager and the subordinates. Having a reasonable span of control is important because it ensures that managers can effectively oversee and guide their subordinates, without becoming overwhelmed or overburdened. A manager with too many subordinates may find it difficult to effectively communicate with them, monitor their progress, and provide appropriate guidance and feedback. Conversely, a manager with too few subordinates may not be utilizing their resources effectively and may be seen as inefficient.

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The factor of production that is fixed in nature is land. In economics, the factors of production are the resources that are used to produce goods and services. These factors include land, labor, entrepreneurship, and capital. Land refers to all natural resources, such as forests, water, and minerals, that are used in production. Unlike labor, entrepreneurship, and capital, land is considered a fixed factor of production. This means that the amount of land available for use in production is limited and cannot be easily increased or decreased in the short run. For example, the amount of land available for farming is fixed, and cannot be increased unless more land is reclaimed or purchased. This fixed nature of land as a factor of production means that the productivity of land is also limited. The amount of output that can be produced from a given amount of land is determined by factors such as the quality of the land, the technology used in production, and the skills of the labor force. As a result, land is an important factor in determining the overall productivity of an economy.

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The choice of transport for goods is influenced by several factors, one of which is the nature of the goods to be transported. Different types of goods require different modes of transport, depending on their fragility, perishability, weight, and volume. For example, delicate and perishable goods such as fresh flowers or seafood may require air transport, while bulky and heavy goods such as construction materials may require road or rail transport. Thus, the nature of the goods to be transported plays a crucial role in determining the most suitable mode of transport for them.

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The type of advertising aimed at taking away existing buyers from their current brand or supplier is called "competitive" advertising. Competitive advertising is a strategy where a company promotes its products or services by highlighting their benefits over those of its competitors. The goal is to convince customers to switch from their current brand or supplier to the advertiser's brand or supplier. This type of advertising can be very effective when done correctly because it helps to create brand awareness and differentiate products or services from the competition. However, it can also be risky as it may cause a backlash from competitors or customers who feel loyal to their existing brand. Other types of advertising include: - Informative advertising: This type of advertising focuses on providing information about a product or service to the target audience. The goal is to educate the audience and create awareness about the product or service. - Negative advertising: This type of advertising focuses on highlighting the flaws or weaknesses of a competitor's product or service. The goal is to discredit the competition and convince customers to switch to the advertiser's product or service. - Mass advertising: This type of advertising targets a large audience through mediums such as television, radio, or print media. The goal is to reach as many people as possible to create brand awareness and promote products or services.

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The European Union is not an economic grouping in West Africa. The European Union is a political and economic union of European countries, and it is not located in West Africa. The other options, such as the Economic Community of West African States, the Lake Chad Basin Commission, and the Niger Basin Commission are all economic groupings in West Africa. These organizations promote regional economic cooperation and integration among their member states.

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A means of payment through the post office is a "money order." A money order is a payment order for a pre-specified amount of money, which is issued and guaranteed by the post office. It is a secure and reliable way to transfer funds, especially when you need to make payments to someone who doesn't accept personal checks or online payments. You can purchase a money order at your local post office, fill it out with the recipient's name and address, and mail it to them or hand it to them in person. The recipient can then cash the money order at their own post office or bank. Unlike personal checks, money orders do not bounce, and they can be replaced if lost or stolen (for a fee).

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The keyboard of a computer is classified as an "input device". An input device is any hardware component that allows you to enter data and commands into a computer. The keyboard is one of the most commonly used input devices, as it allows you to type text, numbers, and symbols into the computer. The information you type on the keyboard is then processed by the computer's central processing unit (CPU) and can be used to perform various tasks, such as writing a document or playing a game. The keyboard is an essential component of a computer system, as it provides a way for users to interact with the computer and control its functions.

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The proportion of the total deposit that a commercial bank must keep as cash and convertible paper is called the liquidity ratio. This is a requirement set by the central bank of a country to ensure that banks have enough liquid assets to meet their obligations to depositors, in case there is a sudden demand for withdrawals. For example, if the liquidity ratio is set at 20%, then a bank with $100 in deposits would need to hold $20 in cash or convertible paper. The remaining $80 could be used for lending or other investments. The liquidity ratio is important for maintaining financial stability and preventing bank runs. If banks did not have to hold a certain proportion of their deposits as liquid assets, they could potentially lend out all of their deposits, leaving them vulnerable to a sudden demand for withdrawals from depositors. The liquidity ratio helps ensure that banks have enough liquid assets on hand to meet their obligations and maintain confidence in the banking system.

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A risk whose probability of occurrence is impossible to estimate is called an uninsurable risk. This type of risk is generally not covered by insurance policies, as insurance companies require a measurable probability of loss in order to calculate the premium that a policyholder must pay. Examples of uninsurable risks may include events that are so rare or unpredictable that there is no actuarial data available to estimate their likelihood, such as a meteorite striking a building or a major earthquake in an area that is not typically seismically active. Uninsurable risks can also include risks that are outside of the control of the policyholder, such as war or political instability in a region where a business operates. In these cases, insurance companies may offer coverage, but at a very high premium or with significant limitations on the coverage. Overall, uninsurable risks are difficult to manage and require careful consideration by individuals and businesses. It is important to have contingency plans in place to mitigate the potential impact of these risks, such as emergency funds or diversified investments.

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A cheque for which payment is refused due to insufficient funds is called a "dishonored cheque". When you write a cheque, you are instructing your bank to pay a certain amount of money to the person or organization you are paying. However, if you do not have enough money in your account to cover the amount of the cheque, the bank will not be able to make the payment. This results in the cheque being returned to the recipient with a "dishonored" stamp on it, indicating that the payment has been refused. This can result in fees and penalties for both the issuer and the recipient of the cheque. Therefore, it is important to ensure that you have sufficient funds in your account before writing a cheque to avoid having it dishonored.

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A firm that imports goods with the intention of re-exporting them is engaged in "entrepot trade". Entrepot trade refers to the practice of importing goods into a country and then re-exporting them without any substantial change or processing. The term "entrepot" comes from the French word "entrepôt" which means "warehouse", and it refers to the use of the importing country as a storage or transit point for goods before they are shipped to their final destination. This type of trade allows for the efficient movement of goods between countries and can provide benefits for both the importing and exporting countries.

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An international trade practice where goods are exchanged for other goods is called barter trade. Barter trade refers to a system of exchange where goods or services are exchanged directly for other goods or services without the use of money. This practice has been used since ancient times and is still used today in certain situations, particularly in situations where traditional currency is scarce or difficult to obtain. For example, a country that has an excess of agricultural goods, such as wheat, may exchange it for machinery or technology with another country that needs the wheat but has a surplus of technology. In this way, both countries can obtain goods they need without having to use traditional currency. Therefore, barter trade is a form of international trade where goods or services are directly exchanged for other goods or services, without the use of money. It allows countries to obtain the goods they need without having to use traditional currency, which can be particularly useful in situations where currency is scarce or difficult to obtain.

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A firm that turns timber into wooden office desks belongs to the construction industry. The construction industry involves the production of buildings, infrastructure, and other structures. It includes companies that specialize in different stages of construction, such as design, planning, building, and furnishing. Since the firm is involved in the production of office desks, which are a type of office furniture, it falls under the construction industry. The firm is taking raw materials, in this case, timber, and turning it into a finished product that can be used in the construction of buildings or the furnishing of offices. Therefore, the construction industry is the most appropriate label for this firm.

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An instruction to a bank to make a regular payment to a third party on behalf of a customer is called a "standing order." A standing order is an instruction that you give to your bank to make a set amount of money available to a third party on a regular basis. For example, you could set up a standing order to pay your rent or a monthly subscription fee to a service provider. The payment is made automatically by the bank, so you don't have to worry about missing a payment or having to make a transfer every month. This type of payment is often used for bills, rent, or other recurring expenses.

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(a) Six advertising media used in business

1. Television.
2. Radio.
3. Newspapers.
4. Magazines.
5. Posters and billboards (hoardings).
6. Internet and social media (online advertising).

(b) What is personal selling?

Personal selling is a method of promotion in which a salesman meets prospective buyers face to face, presents and demonstrates the product, persuades them to buy, and answers their questions with the aim of making a sale. It involves direct, personal communication between the seller and the customer.

(c) Four advantages of personal selling

1. The salesman can give a direct demonstration and detailed explanation of the product to the customer.
2. It allows immediate feedback, so the salesman can answer questions and clear doubts on the spot.
3. The sales message can be adjusted to suit the particular needs of each customer.
4. It builds a personal relationship with customers, which encourages repeat purchases and loyalty.

Two disadvantages of personal selling

1. It is expensive because of the salaries, commission and travelling expenses of salesmen.
2. It reaches only a limited number of customers at a time, unlike mass advertising media.

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(a) Five reasons that would make a bank dishonour a customer's cheque

1. Insufficient funds: The customer's account does not have enough money to cover the amount on the cheque.
2. Irregular or missing signature: The signature on the cheque differs from the specimen signature held by the bank, or the cheque is unsigned.
3. Post-dated or stale cheque: The cheque bears a future date, or it is stale (presented more than six months after the date on it).
4. Difference in amount: The amount written in words differs from the amount written in figures.
5. Countermanded payment (stop order): The drawer has instructed the bank in writing not to pay the cheque.

Other reasons include the death, insanity or bankruptcy of the drawer, a garnishee order on the account, and material alteration of the cheque not countersigned.

(b) Five reasons countries introduce restrictions in foreign trade

1. To protect infant (young) industries from being killed by cheap foreign competition.
2. To correct an unfavourable balance of payments by reducing imports and conserving foreign exchange.
3. To raise government revenue through import and export duties.
4. To prevent the importation of harmful or dangerous goods such as hard drugs and expired products.
5. To retaliate against the trade restrictions imposed by other countries.

Other reasons include preventing dumping and protecting local employment.

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(a) Type of cooperative society formed

Since the staff came together mainly to have access to funds (savings and loans), the society they formed is a Cooperative Thrift and Credit Society (also called a savings and credit or thrift and loan cooperative).

(b) Four features of the cooperative society

1. Open and voluntary membership: Anyone qualified may join or leave freely without compulsion.
2. Democratic control: It is run on the principle of one member, one vote, regardless of the number of shares held.
3. Common bond and mutual help: Members join together for a common economic purpose and to help one another.
4. Contribution of savings and payment of dividend: Members save regularly and surplus is shared as dividend, usually in proportion to patronage or savings.

Other features include registration under the cooperative law and limited interest on capital.

(c) Three advantages of the cooperative society

1. Members can obtain loans at low rates of interest to meet their needs.
2. It encourages the habit of thrift and regular saving among members.
3. Surplus (profit) is shared among members as dividend, so they benefit directly.

Two disadvantages

1. Shortage of capital, since it depends mainly on the small contributions of members.
2. Poor or inefficient management, as officers are often members with little business or managerial expertise.

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(a) The term that relates to the situation

Where a country's total payments to other countries are greater than its total earnings from abroad, the country has an unfavourable (adverse or deficit) balance of payments.

(b) Six measures the country could take to correct the situation

1. Devaluation of the currency: Reducing the value of the local currency makes exports cheaper and more attractive abroad while making imports dearer, so exports rise and imports fall.
2. Import restrictions: Imposing tariffs, quotas and import licences reduces the volume of goods imported and cuts the outflow of foreign exchange.
3. Export promotion: Encouraging exporters through subsidies, incentives and export bonuses increases the country's earnings from abroad.
4. Deflationary policies: Reducing government spending and raising taxes lowers domestic income and demand for imported goods.
5. Exchange control: Government control over the buying and selling of foreign currency limits the amount of foreign exchange available for imports.
6. Encouraging import substitution: Promoting local production of goods formerly imported reduces dependence on imports and saves foreign exchange.

Other measures include borrowing from abroad or the IMF, and encouraging foreign investment and tourism to bring in foreign exchange.

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(a) Three benefits of a commodity exchange

1. It provides a central and organised market where buyers and sellers of commodities can meet and deal.
2. It helps to stabilise prices of commodities through the forces of demand and supply, and reduces wide price fluctuations.
3. It makes marketing of commodities easier and faster because goods are bought and sold by grade or sample without physical inspection of the whole bulk.

Other benefits include price information for producers and the opportunity for hedging against future price changes.

(b) Two methods of trading in a commodity exchange

• (i) Spot (cash) trading: This is the buying and selling of commodities for immediate delivery and payment at the current market price. The goods are available for immediate exchange.
• (ii) Futures (forward) trading: This involves an agreement to buy or sell a commodity at an agreed price now, but for delivery and payment at a fixed future date. It is used to guard against the risk of future price changes (hedging) and by speculators.

(c) Four requirements for trading in a commodity exchange

1. The commodity must be capable of being graded or classified into recognised standard qualities.
2. The commodity must be durable so that it can be stored while awaiting sale.
3. The trader must be a registered member of the exchange.
4. The commodity must be in regular and large supply so that continuous dealings can take place.

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(a) Four career opportunities available to a student of commerce

1. Accountancy and auditing.
2. Banking and finance.
3. Marketing, sales and advertising.
4. Insurance and actuarial work.

Other examples include entrepreneurship, purchasing and supply, and teaching of commercial subjects.

(b) Two functions of an entrepreneur

1. He bears the risk and uncertainty of the business by investing his capital with no guarantee of profit.
2. He organises and coordinates the other factors of production (land, labour and capital) and takes key managerial decisions to run the business.

(c) Explanation of the activities with two examples each

• (i) Extractive industry: This is concerned with the extraction or taking of raw materials and natural resources from the earth, sea or air. Examples: mining of gold or coal, and fishing.
• (ii) Construction industry: This is concerned with the assembling and putting together of materials to build structures. Examples: building of houses, and construction of roads and bridges.
• (iii) Manufacturing industry: This is concerned with converting or processing raw materials into finished or semi-finished goods. Examples: textile production, and food or beverage processing.
• (iv) Tertiary industry: This provides services rather than goods, aiding trade and the comfort of people. Examples: banking services, and transportation.

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Cost of goods bought

(i) Cash paid if payment is made within 7 days. Deduct the trade discount first, then the cash discount.

(ii) Selling price at a mark-up of 20%. The mark-up is added to the value of goods after trade discount:

(iii) Net profit.

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(a) Four services rendered by courier companies

1. Fast collection and delivery of parcels, documents and packages from door to door.
2. Tracking of items so that senders and receivers can monitor the movement of their consignments.
3. Delivery of urgent business documents such as contracts, cheques and legal papers.
4. Packaging and safe handling of fragile and valuable items, sometimes with insurance cover.

Other services include international express delivery and cash-on-delivery arrangements.

(b) Three advantages of rail transport

1. It is suitable for carrying heavy and bulky goods over long distances at relatively low cost.
2. It is fast and runs to a fixed timetable, so it is fairly reliable and not affected by traffic jams.
3. It is safer, with a lower risk of accidents, and can carry large quantities of goods and many passengers at once.

Three disadvantages of rail transport

1. It is inflexible because trains can move only along fixed rail routes and cannot provide door-to-door service.
2. It requires very heavy capital to construct and maintain the rail lines and stations.
3. It is unsuitable for perishable goods and small, urgent consignments over short distances.