Term 4 paper 1 exam MA BOI

Question 1

What is the purpose of business functions

Answer 1

The eight business functions work together to achieve the business goal

Roles and tasks may change depending o the size/type/stage of growth

Question 2

What is the meaning of general management

Answer 2

See overall direction or strategy for the business

Question 3

Difference between management and leadership

Answer 3

Management

Task orientated
Uses instructional approach
Guides human behaviour

Leadership

Creates vision
People orientated
uses motivatioonal approach

Question 4

What are the levels of management and what status do they have

Answer 4

Top management

Strategic decisions
eg CEOs and Directors
(plan the future of the business )

Middle management

Tactical
eg Departmental managers
and financial managers
(controls the people and processes in the business)

Lower level

Operational
eg foreman , supervisor
(make routine activities)

Question 5

Explain what PLOCR is and what it does

Answer 5

Planning
The process of setting goals and developing strategies

Organising
Involves breaking a plan into action

Leading
The process of leading is to guide, motivate and inspire others to achieve goals

Controlling
Ensure activities are carried out as planned

Risk management

Evaluates the potential impact of risk in terms of financial liability

Question 6

Activities of the administration

Answer 6

Management of information
Collection of information
Handling of information
information technology
office practice

Question 7

Sources of finance

Answer 7

Banks loans
Bank overdraft
Asset based loans
Grants

Question 8

What is Budgeting

Answer 8

Once the budget is drawn, it should be compared to the actual income and expenditure

Assists businesses to keep track of its finances and ensure better profitability

Question 9

What are the two types of budgets

Answer 9

Capital budget
Cash budget

Question 10

What are the Types of Capital :-D

Answer 10

Fixed capital
Pays fixed assets

working Capital
Money pays for day to day activity

Own capital
Money provided by the owners of the business

Question 11

Give the difference of Own capital and Borrowed capital

Answer 11

Own Capital

Owners provides capital
It is not a liability for the business
Return on capital is on profits

Borrowed Capital

Obtained from financial institutions
It is a liability to the business
Return on capital is paid in form of interest

Question 12

What is the purpose of purchasing

Answer 12

Manage stock to ensure sufficient levels of stock to carry out business operations

Continuously looking for the best/reputable suppliers

Negotiate the best possible term of payment with suppliers

Question 13

Give the 7 production procedures

Answer 13

Determine the need for the product
determine the product/material/resource needs of the businesses

Determine the price of the product
find the best price by obtaining quotes

Select a suitable supplier
the department should choose reliable suppliers for its raw materials

Place an order
confirm the prices of the products in order to avoid unexpected surprises when payments are made

Collect or receive order
the quality and quantity of stock received should be checked against the order

Pay supplier
Must provide a delivery note to the financial department

Distribute stock
department must ensure proper distribution of stock

Question 14

Determine the Importance of stock

Answer 14

Keep the correct levels of stock on hand

Record the cost prices and selling prices of stock

Businesses can check the cost and selling prices of products

Question 15

Difference between Cash and Credit payments

Answer 15

Cash

Cash payers qualify for cash discounts
refers to all payments made by cash

Credit
Refers to all payments made by means of credit cards
can pay more for goods due to interest added on credit purchases

Question 16

Advantages of credit

Answer 16

• There is no discrimination based on age/race/age in granting
• if interest rates decrease consumers will have more cash to pay off debts
• Credit goods bought by the consumer have extended warranty

Question 17

Disadvantages of credit

Answer 17

• There is always the risk of unsettled debts
• Accounts should be sent out to debtors
• There will be less money to invest for consumers

Question 18

Purpose of NCA

Answer 18

• Promotes the development of a credit market that is accessible to all south africans
• Encourage responsible buying
• Discourage reckless credit granting by credit providers

Question 19

The impact of consumer protection Act

Answer 19

Positives

• Businesses may be safe guarded from dishonest competitors
• Business may be protected if they are reguarded as consumers

Negatives

• Penalties for non-compliance may be very high
• Businesses may feel unnecssarily burdened by legal processes

Question 20

Importance of public relations

Answer 20

• Businesses can sponsor the community events
• Brochures can be used to distribute information