ZEGHIE SECONDARY AND PREPARATORY SCHOOL 2nd SEMESTER GRADE 11th

GENERAL BUSINESS MID EXAM OUT OF 20% 2014 E.C

TIME ALLOWED, 20’
NAME----------------------------------------------------GRADE/SECTION-------------NO-------------
I .write true if the statement is correct and false if it is incorrect.
_______1. All economic activity is measured, guided and facilitated by money.
_______2. Equity financing is the fund raised by borrowing from financial institution.
_______3. Money serve as standard of value for accounting records.
-----------4. In Ethiopia checking account is one form of money in the past.
------------5. Money supply is the sum of Cents and paper money in a country.
II. Matching characteristics of money with appropriate meanings
A B
-----------6. Acceptability A. easily divided into its denomination.
----------7. Durability B. the same quality.
----------8. Homogeneity C. not hesitates to exchange their goods.
----------9. Portability D. easy to carry.
---------10. Divisibility E. not be spoiled easily.

III Choose the correct answer from the alternatives

-------11------------- is a type of commercial bank loan facility provides the users to withdraw
more than the amount they keep in checking account.
A. Short term loan B. Middle term loan C. Overdraft D. long term loan
---------12. All are advantages of equity financing except one
A. Stable Operations C. Capital needs of business vary over time.
B. No interest charges must be paid D. Complete Ownership of Profits.
--------13. Which one is not the characteristics of credit associations
A. lend only to members C. non-profit organizations
B. Much of their work is done by members D. lends to the public.
IV. List and fill the black space of the following questions
14. ------------------- is a written pledge to lenders stating the borrower’s intention to repay a loan.
15. Write two types of stocks? A. --------------------------------- B. -------------------------------------
16. -------------------------- is a bond issued by government for short period of time.
17. Write four universal function of money?
A. ---------------------------------------------------------------------------
B. ---------------------------------------------------------------------------
C. ---------------------------------------------------------------------------
D. ---------------------------------------------------------------------------
 BUSINESS Worksheet
1. Money serve as a standard by which the worth of all goods and services is measured and
stated .which functions of money is described? A/ store of value B/ standard of deferral
payment C/ medium of exchange D/ standard of value
2. The material out of which coins are made or the paper out of the paper notes are printed should be of
the same quality .which characteristics’ of money described above?
A/ durability B / Divisibility C/ homogeneity D/ portability E/ acceptability
3. Which one of the following must not be observed in judging the customer’s capacity?
A. Management ability C. Demand stability
B. Business stability D. Sales and net profits stability
4. According to history of banking the 1st bank established in Addis Ababa under a 50-year franchise
agreement with the then British owned National Bank of Egypt.
A. Central bank of Ethiopia C. bank of Ethiopia
B. Bank of Abyssinia D. state bank of Ethiopia
5. ------are types of corporate bond is unsecured bond and as such it has no lien against specific property
as security for the obligation.
A/ Mortgage bond B / debenture bond C/ convertible bond D/ none
6. Which one of the following is importance of banks. A/ they accept and safeguard money
deposit with them B/ they transfer money payment made by cheque . C/ they make loan to
individual, business and government D / all
7. Which of the following terms applies to groups of traits that have social significances and moral quality
A/ Capital B/ capacity C/ character D/ confidence E collateral
8. Which of the following term signifies the loss suffered by a person to the insurances company?
A/ good faith B/ insurable interest C/ subrogation D/ indemnity
9. Which one of the following is not the responsibility of commercial bank of Ethiopia.
A/ perform all commercial banking activities
B/ encourages the public to open up different account with banks
C/ issuing the national currency and seeing to it that its circulated D/ issue letters of credit
10. The following areas are reserved for domestic investors except one.
A/ import trade B/ radio and television broadcasting services
C/ rail transport D/ car, air and taxi-cubs transport
11. Which areas are reserved for foreign investors. A/ export trade B/ forwarding and shipping
agency C/ retail trade and brokerages D/ wholesale trade
12. -----is the types of life insurances provides payment it the insured dies within a certain numbers of
years stated in the policy.
 A whole life insurances B endowment life insurances C term life insurances D none
13. The standard fire insurances policy covers or indemnifies the following except one.
A / fire that destroys building B/ lighting that damage house
C/ explosion of boiler used as domestic purpose and damage property
D/ shops that are stealing by the theft
14. List and describe the 5cs primary factors of credit granting (credit management) .

15. -------IS accomplished by borrowing funds.

A/ equity financing B/ debt financing C / owners contribution D/ none
16. Which one of the following is the advantages of equity financing?
A/ capital needs of business vary over time B/ stable operation
C/ the original owners sacrifice apportion of their control and profit D / a greater total investment by
owners is required to maintain a given scope of operation
17. ------is the types of commercial bank loan usually due above five years
A/ long term loan B/ middle term loan C/ over draft loan D/ short term loan
18. which one of the following is the disadvantages of debt financing
A/ borrowing is convenient for short term needs B/ borrowing money provides additional capital
without giving up any ownership C/ companies that use borrowing money must meet interest payment
regularly D/ all
19. ------is a bond secured by property owned by the issues like building and other movable property.
A/ debenture bond B/ convertible bond C/ mortgage bond D/ all
20. ------refers to income generating or earning power.
A/ confidences B/ collateral C/ capacity D/ character E/ capital
21. Which one of the following is not responsible of national banks of Ethiopia.
A/ acting as an agent of the government B/ keeping the account of other government agencies
and ministries C/ prepare and selling government bonds and documents
D/ issue letters of credit
22. ------the types of marine insurances is related to an insurances coverage of goods in transit from one
places to another by air ,rail and road A/ fire insurances B/ marine insurances
C/ inland marine insurance D/ ocean marine insurances.
23. which one of the following is area reserved for domestic investor.
A/ Banking and insurance business B/ retail trade and brokerages
C/ air transport services D/ forwarding and shipping agency services
24. ---------IS the categories of life insurances the insured makes equal payment periodically from the
purchase date unit his/her death.
A/ term life insurance B/ endowment life insurances policy C/ whole life insurances D/ none