Model Answers in the Structure of Commerce (eBook)

Front Cover 1
Model Answers in the Structure of Commerce 4
Copyright Page 5
Table of Contents 6
Preface 8
How to answer Examination Questions 10
Chapter 1. Questions relating to Industry and Commerce 13
Question No. 1. Explain the inter-dependence of industry and commerce. Enumerate the principal types of commercial occupations, and discuss the importance of each of these to modern production 13
Question No. 2. In what ways do the nationalized industries differ from other types of business units? 16
Chapter 2. Questions relating to Types of Business Organizations 19
Question No. 3. Explain the function of a Marketing Board. Illustrate your answer by reference to one of the existing British Marketing Boards 19
Question No. 4. Compare the characteristics of two main types of business units paying particular attention to the provision of capital, ownership and control 23
Question No. 5. Describe the organization of a retail co-operative society and say, with reasons, if you think this form of business unit can meet successfully the increasing competitive conditions in modern retailing 26
Question No. 6. What are the main differences between the two kinds of joint stock companies? State the advantages to the community, and to the individual business units of these forms of organization, and mention the different kinds of shares which may be issued 29
Question No. 7. A group of persons decide to form a Limited Liability Company to carry on business as manufacturers of chemical fertilizers. Give your views as to (a) the sources from which they could obtain a total capital of £250,000 and (b) the form or forms which such capital participation could take, stating the reasons which would influence the promoters in deciding the form or forms into which the capital should be divided 32
Question No. 8. In what ways and for what reasons may a public limited liability company increase (a) its long-term capital, and (b) its short-term capital? 35
Chapter 3. Questions relating to Methods of Distribution 38
Question No. 9. State the chief differences between the methods of distributing agricultural produce and manufactured goods and explain the reasons for these differences 38
Question No. 10. What are the advantages to a manufacturer of branding and advertising? 41
Question No. 11. Comment on the following statements noted recently in commercial literature 43
Question No. 12. What do you understand by Market Research? By whom is it carried out and why? 46
Question No. 13. Account for the expansion of the hire-purchase system in the sale of goods in recent years. What are the objections to this form of selling, and has the Government taken any steps to control deferred payment schemes? 49
Question No. 14. Write notes on the following as channels of distribution 53
Question No. 15. What are the functions of the wholesale merchant? To what extent is it true to say that these functions are no longer essential? 56
Question No. 16. What are the factors making for (a) the elimination of the wholesaler in home trade and (b) his survival? 59
Question No. 17. Give an account of London's main wholesale food markets 62
Chapter 4. Questions relating to Import and Export Procedure 65
Question No. 18. Give an outline of the usual procedure when exporting goods, and the method of arranging payment by means of a documentary bill of exchange. Does the Government afford any assistance in this field 65
Question No. 19. What services are provided for the businessman who wishes to export? 68
Question No. 20. Explain how a timber importer would obtain delivery of a cargo consigned to him on its arrival at a U.K. port. 72
Chapter 5. Questions relating to Foreign Trade 75
Question No. 21. Describe briefly the pattern of the foreign trade of the United Kingdom and indicate the main post-war changes 75
Question No. 22. Distinguish between the balance of trade and the balance of payments. Discuss the usefulness of tariffs on imported goods as a method of correcting an adverse balance of trade 78
Question No. 23. Give a concise account of the following: G.A.T.T. (General Agreement on Tariffs and Trade), E.E.C. (European Economic Community), E.F.T.A. (European Free Trade Association) and the principal reasons for their formation 81
Chapter 6. Questions relating toThe Capital Market 84
Question No. 24. Give an account of the London Stock Exchange, and discuss whether it assists in the raising of new capital for industry 84
Question No. 25. You wish to acquire 500 ordinary shares of £1 each, fully paid, of a Public Limited Company and for which the current Stock Exchange quotation is 27$. 6d.-28s. 6d. Describe in detail the procedure under which you would buy these shares and eventually receive a Share Certificate in your name 87
Question No. 26. Write short notes on three of the following: (a) Bulls, (b) Bears, (c) Stags, (d) Double Options, (e) Trustee securities 90
Question No. 27. What do you understand by the capital market? To what extent is it an organized market in this country? 93
Question No. 28. Distinguish between (a) an Accepting House, (b) a Discount House, and (c) a Bill broker, describing their respective fields of activity 96
Chapter 7. Questions relating toThe Banking System and Methods of Payments 99
Question No. 29. What are the functions of the Bank of England? 99
Question No. 30. Describe the work of the commercial banks and say what services they render to industry 103
Question No. 31. (a) What safeguards may be adopted by a business man when drawing a cheque? (b) Outline the arrangements of the principal banks for the "clearing" of cheques 106
Question No. 32. Give an account of the work of the Bankers' Clearing House. What is its relationship to the Clearing Banks and the Bank of England? 109
Question No. 32. Give an account of the work of the Bankers' Clearing House. What is its relationship to the Clearing Banks and the Bank of England 109
Question No. 33. "We are being urged these days to use credit transfer in making various payments". Describe the system and indicate its advantages 112
Question No. 34 What are the following: (a) Bank Rate (b) a Bill of Exchange
Question No. 35. What are the main characteristics of the methods of payment offered by the Post Oflfice? Why are they not more widely used in trade? 117
Chapter 8. Questions relating toTransport 120
Question No. 36. What factors should be taken into account when deciding the form of inland transport to be used? Illustrate your answer with examples 120
Question No. 37. Consider the transport of goods from Liverpool to Bristol. State, with reasons, in what circumstances you would give first preference to (a) passenger train, (b) goods train, (c) road, (d) coastal steamer 123
Question No. 38. An adequate transport system is obviously necessary to Britain's business. Yet, on the one hand, the railways are losing money and, on the other hand, the roads are becoming increasingly congested. Discuss the necessity of both railways and road transport at the present time 126
Question No. 39. Write an account of three important types ofcargo shipping in common use today 129
Chapter 9. Questions relating toLocation of Industry 132
Question No. 40. Discuss the factors which now determine the location of factories in U.K 132
Chapter 10. Questions relating to Insurance 135
Question No. 41. Describe the main risks of business and say, giving reasons, if they are all insurable 135
Chapter 11. Questions relating to Consumer Protection 137
Question No. 42. What safeguards in regard to the quality of goods are available to the consumer? 137
Question No. 43. Write notes on FOUR of the following 140
Chapter 12. A Selection of Questions requiring brief treatment on a variety of Subjects 144
Question No. 44. Write briefly upon FOUR of the following 144
Question No. 45. Write briefly on FOUR of the following 148
Question No. 46. Explain briefly any FOUR of the following 151
Chapter 13. Questions relating to Trade Calculations 154
Question No. 47. The following statement from a company's records shows the comparison between the estimates and the actual results for the year 1959-60 154
Question No. 48. Two firms, each with a capital of £100,000, supply the following information regarding their trading in 1962-63 157
Question No. 49. The A.B. Co. Ltd. has a paid-up capital of 50,000 £1 5 per cent preference shares and 400,000 5s. ordinary shares 159
Question No. 50. (a) Explain the meaning and importance of working capital and from the following balance sheet calculate the amount of working capital of the S.T. Company Ltd 160
Appendix 164
Index of Questions 168