(For Both School and Private Candidates)

Time: 2:30 Hours Friday, 10th November 2015 p.m.


  1. This paper consists of sections A, B and C.

  2. Answer all questions in sections A and B and two (2) questions from section C.

  3. Calculators and cellular phones are not allowed in the examination room.

  4. Write your Examination Number on every page of your answer booklet(s).

SECTION A (20 Marks)

Answer all questions in this section.

1. For each of the items (i) - (x), choose the correct answer from among the given alternatives and write its letter.

(i) A document which serves as an invitation to the general public to buy shares is called:

  1. Memorandum of Association
  2. Articles of Association
  3. Prospectus
  4. Certificate of trading
  5. Certificate of incorporation
Choose Answer :

(ii) Why is a debit note issued?

  1. To correct any error in an invoice
  2. To correct an undercharge in an invoice
  3. To correct an overcharge in an invoice
  4. To correct an overcharge in an account
  5. To correct an undercharge in an account
Choose Answer :

(iii) Which principle is applied when a country decides to produce goods or services that bring a greatest advantage to the country?

  1. Absolute advantage
  2. Competitive advantage
  3. Comparative advantage
  4. Cooperative advantage
  5. Continuous advantage
Choose Answer :

(iv) Find the price elasticity of demand using proportionate change method for maize when demand falls from 800kg to 600kg due to increase in price from shs 40 per kg to shs 60 per kg.

  1. 3/4
  2. -3/4
  3. 20/21
  4. -20/21
  5. 1/2
Choose Answer :

(v) Which of the following should not be considered when communicating?

  1. The source of communication
  2. The consent of the message
  3. The process by which the communication is produced
  4. The evidence of communication
  5. The method by which it is transmitted
Choose Answer :

(vi) Production can generally be classified as:

  1. constructive, extractive and manufacturing industries
  2. industries, commerce and direct services
  3. industries, trade and aids to trade
  4. home trade, aids to trade and direct services
  5. foreign trade, aids to trade and direct services
Choose Answer :

(vii) A document showing the details of commodity sent and its total value which the receiver will have to pay is known as

  1. Consignment note
  2.  Delivery note
  3. Invoice  
  4. Proforma invoice
  5.  Consular invoice
Choose Answer :

(viii) Which of the following canons of taxation shows clearly the amount to be paid to the state by the tax payer?

  1. Convenience 
  2. Equity
  3. Certainty   
  4. Economy
  5. Productivity
Choose Answer :

(ix) Ex works is a price quotation which presents the cost of goods as they leave the:

  1. bonded warehouse premises
  2. manufacturers premises
  3. port of destination
  4. port of loading
  5. public warehouse premises
Choose Answer :

(x) The bank that issues the legal tender currency in any country is

  1. Commercial banks
  2. Central bank
  3. Investment bank
  4. Bank of Tanzania
  5. National Bank of Commerce
Choose Answer :

2. Match the item in Column A with the response in Column B by writing the letter of the correct response beside the item number in you answer booklet.

  1. The close connection between what makes
     the loss and risk insured. 
  2. Loss/damage  to  vessels, cargo or
    passengers during transportation in high seas. 
  3. The means by which some of the risks incurred in the business can be overcome.
  4. The situation where insurer takes the risks
     to another insurance company to cover part of its risk. 
  5. The amount paid to the insured who no
     longer wishes to continue with an insurance contract. 
  6. A temporary policy issued before the actual
    policy has been issued. 
  7. Compensation  to an employer whose
    money or goods has been stolen by an employee. 
  8. Insurance contract for the protection of loss caused by unlawful possession of goods from the insured person.
  9. The sum assured is payable at the expiration
     of the specified period or if the assured dies before the period expired. 
  10. The insured should be in the same financial
    position as before the risk occurred. 
  1. Reinsurance
  2. Fidelity insurance
  3. Endowment policy
  4. Marine insurance
  5. Proximate cause
  6. Indemnity
  7. Cover note
  8. Insurance
  9. Livestock insurance
  10. Double insurance
  11. Life assurance
  12. Plate glass insurance
  13. Surrender value
  14. Burglary insurance 
  15. Insurable interest
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 3.  (a) Briefly explain the term stock administration.

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(b) Elaborate five (5) functions of stock administration.

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(c) List four (4) advantages of a Bonded warehouse to the government.

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4. Differentiate the following commercial terms

  1. Brokers and Factors
  2. Commission agents and Del-Credere agents.
  3. Public corporation and Parastatal Bodies
  4. Specialization and Division of labour.
  5. Naked Debentures and Mortgage Debentures.
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5. (a) K & K Traders of P. 0. Box 574, Arusha placed an order on March 11th, 2013 to Mashanga wholesalers of P. 0. Box 45230 Dar-es-Salaam to supply the following items:

100 bags of maize flour of 50kgs @ Tshs 28,000

55 bags of sugar of 50kgs @ Tshs 93,000

100 bags of wheat flour of 50kg @ Tshs 100,000

30 boxes of OMO of 5kgs @ Tshs 12,000

50 tins of cooking oil of 20 liters @ Tshs 85,000

K & K Traders is entitled to a trade discount of 5%.

Design an invoice for the above transactions on 18/03/2013; the invoice designed should be noted as invoice number 342.

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(b) Describe the following terms: 

(i) Trade discount

(ii) Cash discount

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 6.   (a) (i) Briefly explain the term cheque.

(ii) Elaborate three main parties to a cheque.

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(b) Whenever someone buys goods or services, payment can be made by either cash or cheque. Describe five advantages of paying the debts by using cheques.

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7. Mkazakamba is a trader who exports fresh fish and flowers from Tanzania to Japan and he is planning to use air means of transport. As a commercial student, describe to him five advantages and five disadvantages of this mode of transport.

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8. (a) Packing becomes very useful in marketing of goods. Explain five advantages of packing the product.

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(b) Explain three main methods of personal selling to the producer of the goods.

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(c) Briefly elaborate two limitations of personal selling to the producer of the goods.

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9. (a) Discuss five problems faced by Tanzania for being involved in international trade.

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(b) Explain five methods a country may use to control the volume of imports.

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10. (a) Differentiate wholesale trade from retail trade.

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(b) Elaborate seven services provided by a retailer to the final consumers.

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(c) Describe four steps involved in the distribution of goods from the manufacturer to the final consumer.

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