PAPER 3 REVISION QUESTIONS(Ms.

Zaouache)

BGCSE 2004

TOPICS OF FOCUS;

- PARTNERSHIPS

- MARKET RESEARCH

- SWOT ANALYSIS

- START UP CAPITAL

- INCOME STATEMENT(used to determine gross profit and net profit)

- WORKING CAPITAL

Kgabo and Kagiso have completed their studies and decided to set up their own business . with the
help of an interest free loan from Kgabo s father, they managed to set up a stationery shop as a
partnership. They called their business ‘KK Stationers.’

They did not draw up a deed of partnership because they could not afford a lawyer.They also
thought they could trust each other.

At first all went well and they had enough customers. However they began experiencing problems
like losing orders from customers. They increased prices to cover for operational costs, but some
customers stopped buying from them. To make matters worse,they disagreed over sharing of profits
and clear division of responsibilities.

They were told it was cheaper to buy stationery from Western book suppliers.

a. Explain two ways in which Kgabo and Kagiso might have come up with their business idea.(4)

b. Explain three ways how Kgabo and Kagiso might have been affected by not drawing a deed of
partnership.(6)

c. If Kgabo and Kagiso could have researched the market better, they might have encountered fewer
problems. Explain two ways a market research could have helped the business to run more
effectively(4)

d. Write two closed ended questions on competition and price that Kgabo and Kagiso might have
used to collect information on the market.(4)

e.Explain two reasons consumer panels might be useful to collect data.(4)

f. Planning is an important part of the business. A SWOT analysis can identify many important areas
for a business to work on. Complete the SWOT analysis below for KK Stationers. The first example
has been done for you.

Strengths Weaknesses
- Good financial position
- Good location

Opportunities Threats
g. A business needs capital to start. Explain two reasons why Kgabo and Kagiso need Start up capital.
(4)

h. Discuss three ways in which a bank loan might assist Kgabo and Kagiso at the start of their
business.(9)

Below is an extract from KK Stationers books

P
Closing inventory(stock) 2700
Trade Receivables(debtors) 200
Cash 500
Trade Payables(creditors) 2500
Bank Overdraft 3200
Capital 5000
Sales 9500
Purchases 5000
Expenses 950

i. Calculate Gross Profit for KK Stationers.(2)

j. Calculate Net Profit for KK Stationers.(2)

k. Calculate the business s working capital(4)

l. Suggest two ways how KK Stationers could improve their working capital(4)

m. Discuss three ways, other than improving working capital, that KK Stationers might use to
become successful.(9)

BGCSE 2015

TOPICS OF FOCUS;

-FRANCHISING

-BUYING AN EXISTING BUSINESS

-MARKET RESEARCH

-START UP CAPITAL

-CEDA LOAN

-DECLINE IN SALAES

-BRANDING

-STATEMENT OF FINANCIAL POSITION(INCLUDING WORKING CAPITAL)

-IMPACT ON THE ENVIRONMENT

Atang, a chemical engineer, has worked for 15 years in a factory processing cooking oil. During that
period, he accumulated savings of P150000. Atang was not happy with the management so he
resigned to start his own business with his savings.

He met a successful business person who suggested to him that he should either buy a franchise or
start from scratch. Atang decided to carry out market research to test the feasibility of the idea.
After analysing the market research results, Atang chose to start his own cooking oil processing
company called Atang (Pty) Ltd with the brand name ‘Natural Oil.’

a. State one method Atang might have used to carry out market research. (1)

b. Examine three possible problems that Atang might have met when carrying out market. (6)

c. Assess Atang s decision to choose to start from scratch instead of buying an existing business.(9)

d. The market research findings indicate that the P150 000 start up capital from Atang would not be
enough. Atang decided to apply for a long term CEDA loan.

Explain two ways in which Atang could have used the start up capital(4)

e. Discuss the implications of choosing a Citizen Entrepreneurial Development Agency loan as a

source of finance.(6)

f. The business did well in its first three years. After that sales started to decline. Analyse two
poessible causes for the decline in sales.(4)

g. Evaluate the importance of branding for Atang (Pty) Ltd s products.(6)

The following information was extracted from Atang (Pty)Ltd s Statement of Financial Position as at
December 2014.

P
Buildings 100000
Trade Receivables 15000
Inventory(stock) 50000
Cash 5000
Motor vehicle 85000
Trade Payables 25000
CEDA long term loan 70000
Bank overdraft 10000
Owner s equity 150000

i. Calculate the total non-current assets.(3)

j. Calculate the total current liabilities.(2)

k. On 10 January 2015 Atang Oil (Pty) Ltd bought inventory P10000 on credit. On 20 January 2015
one debtor paid cash P5000. Calculate the current assets as at January 2015.(4)

l. Discuss how Atang (pty) Ltd would benefit from having adequate working capital(6)

m. Assess the impact of Atang (Pty)Ltd s operation on the environment.(9)

 BGCSE 2017

TOPICS OF FOCUS;

-WAYS AND TECHNIQUES OF STARTING A BUSINESS

-SWOT ANALYSIS

-SOURCES OF FINANCES(GOVERNMENT GRANT+ BANK LOAN)

-STATEMENT OF FINANCIAL POSITION

-BUSINESS UNITS(SOLE PROPRIETORSHIP+ PARTNERSHIP)

-CUSTOMER SERVICE

-BUSINESS ON COMMUNITY

-UTILISATION OF RESOURCES

-REASONS WHY BUSINESSES FAIL

Keletso has been a truck driver for a multinational company and recently retired to start a public
transport business. He used his retirement package and savings to start Keletso Tours. After a year
of operating the business began experiencing problems like increased competition from other
businesses and pressure from the community due to recent rise in transport fares and pollution.he
approached Local Enterprice Authority and was adviced to practice good record keeping, financial
discipline, good customer care, social responsibility and conduct to buy a analysis.

A. suggest two possible ways that Keletso used to decide on the business idea.(2)

b. Keletso has been advised to conduct a SWOT analysis. How would a SWOT analysis help Keletso
with the success of his business.(8)

c. Keletso is thinking of applying for a government grant or bank loan to buy another bus. Evaluate
the best source of finance for Keletso.(9)

(d) The following information was extracted from Keletso Tours Statement of Financial Position.

Land and buildings- Bank overdraft-8000

10000
Motor vehicle-63910 Creditors-6737
Furniture-4000 Bank loan-2100
Debtors-53203 Capital-86106
Cash-9700 Net profit-5000

Use the information to answer question d (i) to (v)

Calculate the following;

i. total fixed assets

ii. total current assets

iii. total current liabilities

iv. net current assets

v. capital employed

e. Keletso started as a sole proprietor but wants to expand to a partnership. Discuss whether or not
Keletso should change into a partnership.(9)

f. Keletso was advised to improve customer service. How can Keletsos improve customer service for
the bus service.(4)

g. The transport fares have been increased by the public transport association, much to the
displeasure of the community. Identify three ways the community might react to this action.(3)

h. There are cosmplaints from the community that Keletso Tours is not socially responsible in its use
of resources. Evaluate two sustainable ways that Keletso Tours could use its resources.(6)

i. Discuss three ways whether or not Keletso s business might fail.(9)

BGCSE 2018

TOPICS OF FOCUS;

-WAYS OF COMING UP WITH A BUSINESS IDEA

-BUSINESS RECORDS

-SPECIALISATION

-PARTNERSHIP

-MARKET RESEARCH

-SWOT ANALYSIS

-METHODS OF PAYMENT(ELECTRONIC TRANSFER AND DIRECT PAYMENT)

-BENEFITS OF YOUTH EVELOPMENT FUND

-BUSINESS PLAN

-GOOD CUSTOMER SERVICE

-FACTORS TO CONSIDER WHEN DESIGNING AN ADVERT

-MIDDLEEN OF INTERNATIONAL TRADE(FORWARDING AGENTS)

-STATEMENT OF FINANCIAL POSITION(INCLUDING WORKING CAPITAL)

-SUSTAINABLE USE OF RESOURCES

Josa and Sarah applied for and received a grant through the Youth Development Fund. The fund
offered 50% grant therefore they had to pay back only 50% of the amount given. They supplemented
the business capital with their own savings. They formed a partnership called Josa motors. The
partners prepared a business plan for their business of which a market research was included. Due
to the research findings, they decided to import spare parts from Japan. They paid the supplier
through direct payment and electronic transfer. The government increased customs duty on
imported cars parts and this affected Josa Motors and led to decline in sales and working capital.The
business approached a consultant who advised them to either admit a new partner or look for new
sources of supply for cars parts.

A. Explain one way in which Josa motors would use the capital from Youth development fund.(2)

b. explain two reasons why it is important to keep accurate financial records of the business.(4)

c. analyse two implication of specilisation to Josa motors.(4)

d. Evaluate whether or not a partnership was the appropriate type of business structure for Josa
motors. Justify your answer.(9)

e. describe one method of conducting market research(2)

f. explain two possible reasons for the decline in sales for Josa motors. (4)

g. state two strengths for josa motors.

h. Josa Motors is considering the advice from the suppliers of using one of the following methods of
payment.

1. Electronic transfer

2. direct payment

Discuss both methods of payment. Which method would you recommend? Give two reasons for
your recommendation.(9)

i. state two possible reasons why Josa Motors decided to apply for financing at the Youth
Development Fund.(2)

j. Discuss two ways in which a submission of the business plan would help in the long term success of
Josa motors.(6)

k. Explain two benefits of good customer service for Josa Motors.(4)

l. Assess three factors that Josa Motors should consider when designing an advertisement.(9)

M. State two reasons why Josa Motors decided to use forwarding agent when purchasing spare
parts and machines from Japan(2)

n. John and Sarah are considering the advice from the consultant to admit a new partner or look for
a new supplier. Discuss both options(6)

Recommend the best option(3)

The following is the extract of statement of financial position of Josa Motors as at 31 st March 2018.

P P P
(A)NON-CURRENT ASSETS
Property 150000
Fixtures and fittings 100000
Equipment and machinery X
Total non-current assets 400000

(B)CURRENT ASSETS
Inventory 10000
Trade Receivables 50000
Cash 10000
70000

(C)LESS:CURRENT LIABILITIES
Trade Payables 90000
Bank Overdraft 24000
114000
(B)-(C)=WORKING CAPITAL Y

O. Calculate the amount spent buying equipment and Machinery.Show your workings.(2)

P. Calculate the working capital of Josa Motors. Show your working.(2)

Q. Analyse two ways in which Josa Motors could improve the qorking capital of the business.(4)

R. Discuss two sustainable ways in which Josa Motors may use its resources.(6)