Principles of Business – Caribbean Examinations Council |

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CARI BB E AN      E XA MINA TIONS            C OUN CIL




      REPORT ON CANDIDATES' WORK IN THE
 SECONDARY EDUCATION CERTIFICATE EXAMINATION




                    JANUARY 2012




            PRINCIPLES OF BUSINESS
       GENERAL PROFICIENCY EXAMINATION




     Copyright  2012 Caribbean Examinations Council
                   St Michael, Barbados
                    All rights reserved.
                                                     2

                                       GENERAL COMMENTS

This year a total of 4, 913 candidates registered for the Principles of Business General Proficiency
examination. The examination is comprised of the following Papers:

        Paper 01                 -                Multiple Choice
        Paper 02                 -                Essay Paper
        Paper 032                -                Alternative to School Based Assessment
                                                  (Private Candidates)

Paper 01 consists of 60 multiplechoice items taken from the three profiles of the syllabus. The
performance of candidates on this paper was commendable. The mean mark was 33.69. Approximately
67 per cent of the candidates scored at least 50 per cent of the available marks on this paper. One
candidate achieved the maximum available mark.

Paper 02 comprised two sections. Candidates were required to answer three compulsory questions in
Section I and two of four optional questions, one from Section II and one from Section III. The mean
mark for this paper was 51.35 out of 100. The standard deviation was 16.93. The marks ranged from 0 to
98. Approximately 53 per cent of the candidates scored at least 50 per cent of the available marks on this
paper.

Paper 032  the alternative to the SchoolBased Assessment (SBA)  is an examination offered to private
candidates. Candidates were required to respond to questions based on a business plan using a given
template.

The overall performance on this paper continues to show improvement. The mean mark was 19.89 out of
40. The standard deviation was 6.98. The maximum marked achieved was 39 out of 40. Approximately
54 per cent of the candidates scored at least 50 per cent of the maximum available mark on this paper.




                                       DETAILED COMMENTS
                                          Paper 02Essay

Section I  Compulsory

Question 1

This question tested candidates' knowledge of the functions of a business and types of business
organizations. The question was attempted by approximately 52 per cent of the candidates, the majority
of whom gave good responses. The mean mark was 10.49 out of 20. The standard deviation was 4.34.

Part (a) (i) required candidates to outline two functions of a business. This part of the question was well
done by most candidates, most of them achieved the maximum available mark for this part of the
question.

For Part (a) (ii), candidates were required to state two ways in which a sole proprietorship is different
from a partnership. The majority of candidates answered correctly, but there were some who failed to
make this distinction.
                                                    3

Part (b) (i) required candidates to define the term franchise. Most candidates confused a franchise with
multinationals and were therefore unable to score the maximum available mark for this section of the
question.

In Part (b) (ii) candidates were required to identify four popular franchises. The majority of candidates
were able to score the maximum mark.

For Part (c), candidates were required to discuss two advantages of operating a franchise. The majority of
candidates was unfamiliar with the concept `franchise' and did not perform well. Candidates gave poor
responses in this section and so was unable to earn the maximum mark. Weaker candidates gave the
advantages to the franchisor rather than the franchisee. Some candidates even gave advantages to the
country where the franchisee operates.

The following are suggested responses to Question 1

(a)     (i)     The functions of business are:
                    To produce goods and services by converting raw materials or inputs into
                       saleable products.

                        To manage money and money resources of business operations which relate to its
                        accounting and financial function.


        (ii)    Two ways in which a sole proprietorship is different from a partnership:
                    A sole proprietorship is owned and managed by the same person while a
                      partnership is jointly owned by the parties involved and may or may not be
                      managed by owners.

                        A sole proprietorship lends itself to quick decision making while a partnership
                        does not generally lend itself to quick decision making but engages in more
                        informed decision making.

(b)     (i)     Definition of franchise
                A franchise is a legal agreement with a parent company to abide by the guidelines and
                regulations set out by that company for a period of time and can take the form of a sole
                proprietorship, partnership or limited company. A franchise is easily recognized because
                it carries the logo and other physical similarities and characteristics of its parent
                company.


        (ii)    Four popular franchises are:

                    McDonalds
                    Burger King
                    KFC
                    Texaco/Esso
                                                      4

(c)     Advantages of operating a franchise:

                     A franchise is usually based on a proven idea. A person will be interested in buying a
                     franchise because he or she knows of the business' track record. The franchisee can
                     research the success history of the business as well as the success history of other
                     businesses before making a commitment.

                     The franchisee can use a recognized brand name and trademarks. The public would
                     have already been aware of the products and/or services offered by the business. The
                     franchisee will benefit from any advertising or promotion by the owner of the
                     franchise,  the `franchisor'.

Recommendations

                     Teachers should ensure that students are able to differentiate between various types
                     of business organizations such as sole proprietorship and partnership. This can be
                     achieved with the use of tables as part of the teaching tool. These can be used to
                     show similarities of and differences between concepts.
                     More emphasis should be placed on the definitions of business organizations such as
                     franchises and the differences and similarities should be highlighted.

Question 2

This question tested candidates' knowledge of documenting business transactions, instruments of
payment, as well as contract law, including types of contracts, termination of contracts, explanations of
the concepts of offer and acceptance and consideration. The question was attempted by 54 per cent per
cent of the candidates, the majority of whom gave good responses. The mean mark was 10.89 out of 20.
The standard deviation was 3.69.

Part (a) (i) required candidates to state four reasons for documenting business transactions.
This part of the question was well done by most candidates, and they were able to earn the full four marks
for this section.

Part (a) (ii) required candidates to identify three instruments of payment, other than a credit card.

The majority of candidates gave good responses, but there were some who incorrectly gave the response
of a medium of finance such as credit union.

Part (b) (i) required candidates to define the term contract. The majority stated that a contract is an
agreement, but a minority failed to mention that the agreement is between two or more parties, and others
omitted that a contract is legally binding or enforceable by law, thus loosing valuable marks.

Part (b) (ii) required candidates to identify the type of contract entered into by Sun and Sand Resort and
Mr. Jones. The majority of candidates did not know the correct answera simple contract  and so lost
the one mark allocated to this section.

Part (b) (iii) required candidates to state four ways in which the contract between Sun and Sand Resort
and Mr Jones may be terminated. The majority of candidates responded correctly to this part and so was
able to earn the full four marks allocated. However, some candidates mistakenly gave the response that
Mr Jones was not able to pay for the scuba instructions, in spite of the information provided in the case
study that stated otherwise.
                                                     5

In Part (c), candidates were required to explain the legal concepts of (i) offer and acceptance and (ii)
consideration, with reference to the relationship between Mr Jones and Sun and Sand Resort. The
majority of candidates gave incorrect responses, thus, they lost most of the marks allocated to this part of
the question. Additionally, weaker candidates did not refer to the relationship between Mr Jones and Sun
and Sand Resort in their responses. Very few candidates gave the correct explanation of the legal term
consideration, with the majority giving the layman's meaning of the word `consideration'.


The following are suggested responses for Question 2

(a)     (i)     Four reasons for documenting business transactions:

                        Business documents help to keep track of all official and unofficial business
                        transactions.
                        Business documents are used for reference purposes to clarify or answer queries.
                        Business documents are used to inform people about business transactions.
                        Documenting business transactions saves time when looking for information
                        since the documents contain relevant information on the business that transpired.

        (ii)    Instruments of payment other than a credit card:
                       Money order
                       Bank draft
                       Cheque
                       Cash


(b)     (i)     Definition of contract:
                A contract is an agreement made by two or more parties that is legally binding or
                enforceable by law.

        (ii)    The type of contract entered into by Sun and Sand Resort
                and Mr. Jones is a simple contract
        (iii)   Four ways in which the contract between Sun and Sand and Mr Jones may
                be terminated are:
                        Performance  both parties carried out their side of the agreement.

                        Agreement  both parties agree to cancel the contract before it is completed.

                        Breach  one party breaks the contract by failing to carry out his side of the
                        agreement.

                        Renunciation  one party carries out a portion of the contract and fails to go any
                        further.
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