Below are answers to the Commerce O Level Specimen Paper 1 for 2018. The paper can be downloaded here. We have also provided links to related topics with the hope that you will find them useful. If you need more insights on how we arrived at the answer just click on the adjacent link.

  1. C most value is added during the secondary production stage
  2. C makes the most sense traditionally there are three levels of production: primary, secondary and tertiary.
  3. A specialisation erodes craftsmanship
  4. B producer goods are goods used to make other goods
  5. C the reward for enterprise is profit
  6. D you can learn about indents here
  7. D you can learn more about the bill of lading here
  8. A duty paid for imported goods is irrelevant. The value of imported goods is what is considered.
  9. C this is a rather bizarre solution but it is the only one that would result in a favourable BOP.
  10. D there is no great answer here but this is close as it informs the customer of their balance owing if any
  11. D this is an example of a specialist wholesale
  12. A they recommend best buys and give advice to consumers. They do not test the goods themselves nor do they set the prices although they might visit shops to make sure that the right prices are being charged. You can learn more about the CCZ here.
  13. D
  14. D Private limited companies cannot sell their shares on the stock exchange
  15. B Ordinary shares carry a risk that they might not receive a dividend as they are not entitled to any
  16. A the object clause is in the Articles of Association
  17. B companies have limited liability
  18. C
  19. C specifically specialise in mortgages
  20. B Merchant bank indulge in trade
  21. A The RBZ most certainly does not accept deposits from the public
  22. D roads are under the mandate of ZINARA.
  23. C all the others are just special loans which attract interest. Shares are paid back in dividends
  24. A you can learn more about average clause and other principles here
  25. A
  26. B endowment is the most common form of life assurance. Pluvial policy covers rain related insurance
  27. D covers losses/injury suffered by other parties as a result of the business’s activities
  28. B the insured is only supposed to be indemnified (restored to their position before the loss occurred)
  29. A you can learn more about business reply service here
  30. B also known as fax
  31. A confravision (even the new curriculum still peddles this unfortunately) these days you can just skype, use facechat or a dozen other services
  32. A one could be forgiven for thinking why not Skype. Not a very good question. Trust me the examiners want you to select email
  33. B they are trains
  34. D other forms of transport cannot match the speed of air transport especially over long distances
  35. D also known as (Less than Container Load) is a practice where goods with different bills of lading are loaded into the same container usually because that container still has space after goods from one consignment have been loaded into it.
  36. C bonded warehouse have nothing to do with manufacturing
  37. C retailer’s warehouse
  38. C all the others are basic products that are demanded by most people
  39. A schools tend to have students and teachers who can buy for themselves or pass the information to their parents. Posters would suffice.
  40. D mass marketing involves masses

To access more topics go to the Commerce Notes page.