Han Chiang High School, Penang.

Second Semester Mid-Term Test, 2016

Business Studies
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Class: C11/C12 /CV1
Answer
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Section A: Objective questions(20%)

1. Which of the following sales procedures is correct?
A. Quotation
Purchase Order
Delivery Order
Invoice
B. Delivery Order
Quotation
Purchase Order
Invoice
C. Purchase Order
Quotation
Delivery Order
Invoice
D. Purchase Order
Delivery Order
Quotation
Invoice

Based on the quotation below, answer questions 2,3,4

Tee Boon Hock Sdn Bhd issues quotation to Eric Tan Sdn Bhd at 16th March
2015.
The content is as shown below:

Terms Of Payment And Delivery

For Acceptance within 14 Days

Cash Discount:8% (7 days); 2%(30 Days)

Terms Of Delivery: Within 7 Days, Carriage Paid

2. Base on the information given, which party need to pay transportation cost?
A. Tee Boon Hock Sdn Bhd
B. Eric Tan Sdn Bhd
C. Both Party
D. Transportation Company

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3. If buyer intends to purchase the goods, which is the validity date to place an
order, except;
A. 23th March 2015
B. 29th March 2015
C. 30th March 2015
D. 16th April 2015

4. Which of the following is the reason of Tee Boon Hock Sdn Bhd issues a
quotation?
A. Reply the letter of inquiry and provide them with the information of
purchase
B. Issue a written notice to the seller of products ordered
C. Inform the buyer early and arrange dispatch of goods
D. Request the buyer to provide credentials of goods

5. Which of the following documents is not usually printed with "E. & O.E." terms?
A. Credit Note
B. Invoice
C. Receipt
D. Statement of Account

6. .
Miss Lee bought 100 gift boxes from Koo Trading Company.
Each gift box is RM30, she is entitle to 10% trade discount.
Eligible for Cash Discount 5%(7 days), 3%(30 days).
Miss Lee made the payment after 7 days.

According to the above situation how much does Miss Lee need to pay?
A. RM 2,619
B. RM 2,484
C. RM 2,565
D. RM 2,910

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7. Bank Cheque and Bank Draft have the following similarities:
I. Bank is the drawer.
II. The purchaser hands over personally to the payee.
III. Only used in the same region or country.
IV. Required to pay a fee or commission.
A. I, II, III
B. I, III, IV
C. II, III, IV
D. I, II, IV

8. What does two parallel lines on the left side corner of a cheque represent?
A. Any holder can redeem the cheque.
B. Redeemable at any nearby post office.
C. Any payee can cash the cheque from the bank.
D. It is encashment, only payable to payee’s account.

9. Chin Aik Enterprise needs to pay salaries to hundreds of employees monthly,

which of the following is the most convenient way?
A. Cash
B. Cheque
C. Credit Transfer
D. Telegraphic Transfer

10. Which of the following is not the advantage of paying by cheque:

A. Convenient to facilitate verification.
B. As a legal document.
C. As a legal tender.
D. Save the need to carry large amount of money.

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Answer questions 11, 12, 13 based on Figure 1.

11. “203149” refers to _____________.

A. Cheque Number
B. Bank Code Number
C. Current Account Number
D. Internal Code For Current Account

12. Current Account Number refers to _______________.

A. 203149
B. 18-14099
C. 0000065519
D. 24

13. Which of the following statements are correct regarding the cheque?
I. It is a Dishonour Cheque
II. Drawer is N.Z New Image SdnBhd
III. Drawee is RHB Bank
IV. Che Wan SullainiBtChe Wan Abdullah can cash directly from the bank
A. I, II
B. II, III
C. II, IV
D. I, IV

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14. Which of the following is not the advantage for the consumer to use bank
card to make payment?
A. Not affected the transactions on a bank holiday.
B. Interest on outstanding balance.
C. Able to transfer payments quickly.
D. Avoid the inconvenience of carrying cash.

15. Which of the following are the advantages of using the Charge Card?
I. Card holders enjoy unlimited amount of credit
II. Not necessary to settle the payment within the period
III. Arrears will not be charged interest
IV. Avoid the trouble of carrying cash
A. I, II
B. III, IV
C. I, IV
D. II, III

16. Which of the following descriptions regarding the benefits of warehouse for
businessman is incorrect?
A. Display of goods for sale.
B. Ensure a continuous supply of raw materials.
C. To ensure safety of product.
D. Control over the quantity of imported and exported goods.

17. Which of the following owned by government but under the supervision of
Royal Custom?
A. Manufacturer’s Warehouse
B. Bonded Warehouse
C. Wholesaler’s Warehouse
D. Retailer Warehouse

18. Which of the following warehouses is owned by government for businessmen

to store duty-free goods?
A. Custom Warehouse
B. Public Warehouse
C. Wholesaler’s Warehouse
D. Retailer Warehouse

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19. Which of the following statements about public warehouses is incorrect?
A. Owned By Government
B. Owned By Private
C. Free storage of goods
D. Set up within the vicinity of port

20. Which of the following statements is the similarity between public warehouse
and bonded warehouse?
A. Owned by the government or private
B. Can freely take out the goods
C. Store paid up dutiable goods
D. Able to make pre-sale preparation work

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Section B: Case Study (20%)

Home Deco Furniture Supplies

117A Mount Kiara Business Park, 55000 Kuala Lumpur.

Tel 03-357128121 Fax: 03-357128122

Elegant Home Styles 30 July 2016

3, Jalan Bukit Kenari,
43000 Kalang, Selangor.

Date Details Amount RM Payment RM Balance RM

01/06/2016 Opening Balance 959.00

22/06/2016 Invoice S1000004 3 524.60 3000.00

26/06/2016 Invoice S1000006 434.70 0.00
28/06/2016 Invoice S1000012 1997.30 0.00
2956.60

3 months 2 months 1 months Current Total Amount Due

0.00 0.00 959.00 2956.60 3915.60

Bank Details : Public Bank, A/c. No:123-456-7890

Cheques Payable To : Home Deco Furniture Supplies

E.&0.E

Table 1

Answer the following questions based on the document above (Table 1).
a. Based on Table 1, this document issued by which party Write down 3

purpose of this document .(6%

This document issued by Home Deco Furniture Sdn Bhd.( 2%)

The purpose of issuing this document: [Any 3 points = 4 marks]

I. It is sent by the seller to buyer at the end of every month

II. It summarized the monthly transactions between the buyer and
seller.
III. It serves as a reminder to the buyer to pay up his debt

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 IV. The balance outstanding is the amount that the buyer owes, it
enables the buyer to check his book of account and notify the seller
if there is any error.
b. Elegant Home Styles found that some products are damaged. Hence they
request for a refund of RM 300.00.At the same time, Home Deco Furniture
Supplies found packing charges were undercharged by RM 35.00.
i. Which documents should be issued by Home Deco Furniture
Supplies to rectify the error? Please explain it. (6%)

Home Deco Furniture Supplies should issue Credit Note(2%) as

an additional invoice, when the Elegant Home Styles returns the
products are defective , request refund for RM 300.(1%)

Beside this, Home Deco Furniture Supplies finds out that packing
charges has been undercharged for RM 35.00, Home Deco
Furniture should issues Debit Note(2%) as an additional invoice,
to request packing charges which is undercharged by RM 35 in the
invoice.(1%)

ii. What is the total amount to be paid after deductions on that month?
RM3650.60 (1%)

c. What is the meaning of E. & 0.E, at the corner of this invoice ? 2%

The seller reserves the right to correct/rectify any error or omission on the
invoice.

d. Based on the document( Table 1) above,

i. Elegant Home Styles need to use what types of payment modes
for the purchases?(4%)

Elegant Home Styles can use Cheque payment.(1% ) Cheque

payment should be written to Home Deco Furniture Supplies.(1%)
Beside this , Elegant Home Styles can use Cash payment.(1%)
Cash Payment can be deposited at Public Bank, Account.
Number:123-456-7890(1%)

ii. There are other ways of payment modes for Elegant Home Styles?
(1%)
Bank Draft, Fund Transfer via Third Party Account Transfer,
Interbank Giro Transfer.(1%)
(Between 3 answers , select 1)

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Section C:Subjective Questions -Compulsory Questions (60%)

1. DefineTrade discount and Cash Discount.

Explain the importance of the Trade discount and Cash Discount to the
buyer and seller.(20%)
Define
Trade Discount - A deduction from the list price of goods purchased given
by one trader to one trader. (2%)

Cash Discount - Seller encourage buyer for the prompt payment of

amount owing on the specific period which is deduction from the price of
goods purchase on credit. (2%)

IMPORTANCE TRADE DISCOUNT

Seller
I. Can increase his sales if the discount is attractive enough(2%)
II. Encourage customer purchase in larger quantity will stimulate
the sales growth, thus giving seller larger margin profit(2%)
Buyer
I. Bulk purchase will reduce the cost of goods,thus giving seller a
larger margin profit.(2%)

IMPORTANCE CASH DISCOUNT

Seller
I. Seller is paid promptly with the cash received, he can buy more
goods and pay his creditors.(2%)
II. Encourage buyer solve the payment as soon as possible , thus
reduce the risk of bad debts.(2%)
III. Numbers of debtors will be reduce, if most customer enjoy the
benefit of cash discount.(2%)
IV. Reduce the burden of clerical work.(2%)
(Between 4 answers , select 3)

Buyer
I. Earlier the payment is settled, the greater discount obtained. Thus
the cost of goods will decrease, concurrently increase the
profit.(2%)
II. If the buyer is credit worthy, this will build goodwill and foster the
relationship with seller.(2%)

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 III. Since the discount received, usually greater than the interest he
would earn than he put the money in the bank.(2%)
(Between 3 answers , select 2)

2. Explain the similarities and differences between credit purchase and hire
purchase ( 20% )
Similarities:
1. After the buyer pays a deposit and sign a contract, he can use the
goods.(2%)
2. The buyer can choose to pay within the specified period of principal
and interest or pay in single payment(lump sump).(2%)

Differences
CREDITPURCHASE HIREPURCHASE
1. It is a practical way of selling 1. Is a concept similar to what is
goods to the buyer.(2%) called “rent-to-own“which is a
system of payment in regular
instalments while using it. (2%)

2. Once the product is purchase, 2. Upon the full payment of the

the buyer becomes the owner of loan, the ownership(title) belongs
the product. (2%) to the buyer.(2%)

3.If the buyer doesn’t make the
payment(breaches the
contract),the seller cannot take
away the product but can take
legal action to collect outstanding
payments.(2%)
3. If the buyer doesn’t make the
payment(breaches the
contract),the seller can take away
the product.(2%)

4. For an example: When a buyer 4. For an example: Car

buys a washing machine by using Installment.(2%)
the credit card. .(2%)

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3. (a)Explain the importance of the bonded warehouse to the
government?(10%)
The Importance Of Bonded Warehouse To The Government
1. It enables collection and prevents evasion of custom duties.(2%)
2. It provides information on the goods imported and exported. (2%)
3. It gives the government some control over the goods imported and
exported. It may help in collecting the information about the import
and export products as well as control the import and export
volumes. (2%)
4. Simplify the Royal Customs administrative work because
businessman do not need to reimburse the import tax. (2%)
5. The promotion of import, export and re-export of trade. It is
because businessman enjoy tax-deferred payment until delivery.
(2%)

(b)Explain the importance of the bonded warehouse to the traders?(10%)

The Importance Of Bonded To The Traders
1. The trader can sell the goods while they are still in bond, leaving
the payment of duty to the buyer or get a loan on the security of the
stored goods. (2%)
2. The trader needs not remove all his goods at once until it is
convenient for him to do. He can make the delivery of small
quantities of goods as he sells them by paying the duty and
warehouse rent to date. This enables him to make use of his
working capital for other purposes. (2%)
3. The entrepot trader who imports with the aim of re-exporting the
goods can store his goods in the bonded warehouse while waiting
for transportation of his goods to other countries. (2%)
4. Whilst goods are still in the bonded warehouse, the
trader(importer)has access to these goods to perform the
necessary operations like grading, packing and labelling to prepare
them for sale as in the case of other warehouse. (2%)
5. The arrival of goods that will be put into bonded warehouses. This
is due to it can avoid payment delays to get official approval for the
customs and Excise Authorities. (2%)

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