Entrepreneurship & Business Management N5 Revision Guide 1

Question

When a worker is paid per unit produced, it is known as …

A commission,
B a piece job,
C piecework,
D time work.

The correct answer is C, piecework.
Piecework refers to a payment system where employees are compensated based on the quantity of items they produce, directly linking effort to earnings.

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Question

The ethical test or approach that one can use to establish an ethical standard is a … principle.

A moral stance,
B utilitarian,
C suitability,
D profitmaking.

The correct answer is A, moral stance.
A moral stance provides a framework for judging actions based on ethical principles rather than consequences or financial gain.

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Question

The supporting materials of a business plan that are included in the addenda, may be …

A copies of contracts and leases,
B personal materials and the lifestyle of an entrepreneur,
C the curriculum vitae of an entrepreneur,
D credit reports.

The correct answer is B, personal materials and the lifestyle of an entrepreneur.
Addenda typically contain supplementary documents like CVs or personal references to showcase the entrepreneur’s qualifications and character.

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Question

The return on investment indicates the …

A cost of sales,
B growth of the business,
C capital investment,
D compensation of the owner’s risk.

The correct answer is D, compensation of the owner’s risk.
ROI quantifies the financial return relative to the investment’s cost, demonstrating how effectively the investment rewards the risks undertaken.

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Question

Comparing actual results with your business plan and correcting errors, are called …

A organising,
B planning,
C control,
D leading.

The correct answer is C, control.
Control involves evaluating performance against set objectives and making necessary adjustments to stay aligned with business goals.

Question

Which ONE of the following is not a DIRECT business environment?

A Political,
B Competition,
C Government,
D Customers.

The correct answer is A, Political.
While political factors influence businesses, they are part of the broader macro-environment rather than the direct, day-to-day business environment that includes competitors, customers, and government regulations.

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Question

The habit that implies knowing where we are going …

A is being proactive,
B is thinking win/win situation,
C is a priority,
D begins with the end in mind.

The correct answer is D, begins with the end in mind.
This habit from Stephen Covey’s principles emphasizes setting clear goals and envisioning desired outcomes to guide actions and decisions effectively.

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Question

What is the ethical test or approach that one can use in order to establish an ethical standard?

A Moral stance principle,
B Utilitarian principle,
C Suitability principle,
D Profit-making principle.

The correct answer is B, Utilitarian principle.
The utilitarian approach evaluates actions based on their consequences, aiming to maximize overall happiness or benefit for the greatest number of people.

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Question

A characteristic of an effective supplier is …

A bad reputation,
B high delivery fees,
C good quality,
D poor service.

The correct answer is C, good quality.
Reliable suppliers are distinguished by consistent product quality, which ensures business operations run smoothly and customer satisfaction is maintained.

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Question

Which cost is deducted from total sales to determine gross profit?

A Fixed cost,
B Cost of sales,
C Production cost,
D Variable cost.

The correct answer is B, Cost of sales.
Gross profit is calculated by subtracting the direct costs of producing goods or services (cost of sales) from total revenue, reflecting the core profitability of business operations.

Question

Which of the following terms is NOT an element of habit formation?

A Technology,
B Skill,
C Desire,
D Knowledge.

The correct answer is A, Technology.
Habit formation involves three key elements: knowledge (understanding what to do), skill (knowing how to do it), and desire (wanting to do it). Technology is an external tool, not an intrinsic part of this psychological process.

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Question

ONE of the characteristics of a good supplier is …

A good quality,
B competition,
C target market,
D production differentiation.

The correct answer is A, good quality.
A reliable supplier prioritizes consistent product/service quality, ensuring smooth business operations and customer satisfaction, unlike abstract concepts like competition or target markets.

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Question

Which financial statement helps determine the future cash needs of a business?

A Income statement,
B Cash book,
C Cash flow statement,
D Balance sheet.

The correct answer is C, Cash flow statement.
This statement tracks cash inflows and outflows, providing critical insights into liquidity and helping businesses plan for upcoming expenses or investments.

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Question

What cost is deducted from total sales to determine gross profit?

A Variable cost,
B Cost of sales,
C Production cost,
D Fixed cost.

The correct answer is B, Cost of sales.
Gross profit reflects revenue minus the direct costs of producing goods sold (cost of sales), distinguishing it from indirect costs like fixed or variable overheads.

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Question

Mike identified a good business opportunity but never had the guts to start his own business. This reflects a … situation.

A win/lose,
B lose/win,
C lose/lose,
D win/win.

The correct answer is C, lose/lose.
Inaction leads to missed opportunities (Mike loses) and potential societal/economic benefits from the unrealized business (others lose), making it a doubly negative outcome.

Question

Delegation means …

A the encouragement to work harder,
B the supervision of workers,
C the ability to perform a specific job,
D the ability to allocate responsibilities.

The correct answer is D, the ability to allocate responsibilities.
Delegation involves assigning tasks and authority to others, enabling efficient teamwork and management.

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Question

The habit of effective self-management implying knowing where we are going, is called …

A synergy,
B production,
C begin with the end in mind,
D priorities.

The correct answer is C, begin with the end in mind.
This principle emphasizes setting clear goals and envisioning desired outcomes to guide actions effectively.

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Question

… is the formulation of detailed financial plans.

A Balance sheet,
B Budget,
C Fixed assets,
D Break-even point.

The correct answer is B, Budget.
A budget outlines projected income and expenses, serving as a financial roadmap for businesses.

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Question

Power based on the ability to influence others because of your superior knowledge is called … power.

A legal,
B position,
C expert,
D reward.

The correct answer is C, expert.
Expert power derives from specialized knowledge or skills that command respect and influence.

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Question

ONE of the characteristics of an efficient supplier is …

A target market,
B good quality,
C production differentiation,
D competition.

The correct answer is B, good quality.
Reliable suppliers consistently deliver high-quality products/services, ensuring operational stability.

Question

Which ONE of the following is not a DIRECT business environment?

A Political
B Competition
C Government
D Customers

The correct answer is A, Political.
Political factors are part of the broader external environment that indirectly affects businesses, unlike direct environmental factors like customers, competitors and government regulations that have immediate impact on operations.

Question

The habit that implies knowing where we are going…

A is being proactive
B is thinking win/win situation
C is a priority
D begins with the end in mind

The correct answer is D, begins with the end in mind.
This principle emphasizes setting clear goals and envisioning desired outcomes to guide decision-making and actions effectively.

Question

What is the ethical test or approach that one can use in order to establish an ethical standard?

A Moral stance principle
B Utilitarian principle
C Suitability principle
D Profit-making principle

The correct answer is B, Utilitarian principle.
This approach evaluates actions based on their consequences and ability to maximize overall benefit for the greatest number of people.

Question

A characteristic of an effective supplier is…

A bad reputation
B high delivery fees
C good quality
D poor service

The correct answer is C, good quality.
Consistent product/service quality is fundamental for maintaining smooth business operations and customer satisfaction.

Question

Which cost is deducted from total sales to determine gross profit?

A Fixed cost
B Cost of sales
C Production cost
D Variable cost

The correct answer is B, Cost of sales.
This represents the direct costs attributable to the production of goods sold by a company, which is subtracted from revenue to calculate gross profit.

Question

ONE of the characteristics of an efficient supplier is …

A competition.
B production differentiation.
C excellent service.
D bad quality of raw materials.

The correct answer is C, excellent service.
Reliable suppliers provide consistent, high-quality service that ensures smooth business operations and customer satisfaction.

Question

… is NOT an important function to assist managers to manage their business well.

A Organising.
B Planning.
C Leadership.
D Discrimination.

The correct answer is D, Discrimination.
While organizing, planning and leadership are essential management functions, discrimination has no place in effective business management.

Question

The habit of effective self-management, which implies that you know where you are going, is called …

A begin with the end in mind.
B proactive.
C synergy.
D priorities.

The correct answer is A, begin with the end in mind.
This principle from effective management strategies emphasizes setting clear goals to guide all actions and decisions.

Question

The community includes the area where the … of your business are living.

A government.
B customers and workers.
C state.
D suppliers.

The correct answer is B, customers and workers.
A business’s community primarily consists of the people directly connected to it – both customers and employees.

Question

… is the formulation of detailed financial plans.

A Fixed assets.
B Break-even point.
C A balance sheet.
D A budget.

The correct answer is D, A budget.
A budget serves as a comprehensive financial plan that outlines projected income and expenses for a specific period.

Question

Allocating tasks and responsibilities to employees:

A Employer
B Manager
C Organising
D Authority

The correct answer is C, Organising.
Organising involves assigning tasks and responsibilities to employees to ensure efficient workflow and achievement of business objectives.

Question

Costs that are the same per unit of production but increases in total when the volume of production increases:

A Fixed costs
B Standard costs
C Increased costs
D Variable costs

The correct answer is D, Variable costs.
Variable costs remain constant per unit but increase in total as production volume rises, as they are directly tied to production levels.

Question

To make sure that plans are carried out and desired results are achieved, the following is a necessity in all organisations:

A Directing
B Control
C Staffing
D Organising

The correct answer is B, Control.
Control processes monitor performance against plans and implement corrective actions to ensure organizational goals are met.

Question

The main responsibility for the productivity of a business lies with the …

A workers
B quality of raw materials
C trade union
D management and equipment

The correct answer is A, workers.
While multiple factors affect productivity, workers bear primary responsibility as they directly execute tasks and operations.

Question

At a breakeven point …

A costs are the same
B total cost equals total fixed cost
C total income equals total expenses
D the business makes profit

The correct answer is C, total income equals total expenses.
The breakeven point occurs when a business’s total revenue exactly matches its total costs, resulting in neither profit nor loss.

Question

Which ONE of the following is NOT a type of interview?

A Tension interview
B Planned interview
C Unstructured interview
D Unplanned interview

The correct answer is D, Unplanned interview.
Professional interviews are always planned, even unstructured ones follow some preparation.

Question

Water and electricity are examples of … costs.

A total
B variable
C fixed
D marginal

The correct answer is B, variable.
Utility costs vary with production levels, making them variable expenses.

Question

Which ONE is NOT a compulsory fringe benefit for employees?

A Workman’s compensation
B Unemployment Insurance Fund
C Medical aid schemes
D A and C

The correct answer is D, Medical aid schemes.
While medical aid is beneficial, it’s not legally required like UIF or compensation.

Question

Trade unions strive to …

A promote equal salary
B promote workers’ holidays
C promote the social, economic and political interests of employees
D promote black workers

The correct answer is C, promote the social, economic and political interests of employees.
Unions advocate for comprehensive worker benefits beyond just wages.

Question

A return on an investment indicates the …

A growth of the business
B profit and loss
C compensation for the risk that the owner took
D capital investment

The correct answer is C, compensation for the risk that the owner took.
ROI measures risk compensation, not just growth or profit.

Question

The main responsibility for the productivity of a business lies with the …

A workers
B quality of raw materials
C trade unions
D management

The correct answer is D, management.
While workers execute tasks, management bears ultimate responsibility for productivity systems.

Question

The following offence constitutes final dismissal:

A Drunkenness off duty
B Absent from work
C Fraud
D Being late for work

The correct answer is C, Fraud.
Fraud is a serious breach of trust warranting immediate dismissal.

Question

The most important assets of a business are …

A raw materials
B finished goods
C workers
D buildings and equipment

The correct answer is C, workers.
Human capital drives innovation and execution more than physical assets.

Question

… is the benefit of the lower cost per unit when large volumes are produced.

A Net profit
B Economics of scale
C Opportunity cost
D Sales cost

The correct answer is B, Economics of scale.
This describes the per-unit cost advantage of higher production volumes.

Question

The difference between a product and a service is that a service is …

A private
B tangible
C intangible
D all of the above

The correct answer is C, intangible.
Services lack physical form unlike products.

Question

Which ONE is NOT part of the selection process?

A Application form
B Salary scale
C Physical examination
D Tests

The correct answer is B, Salary scale.
Compensation is negotiated after selection, not part of the evaluation process.

Question

An employee’s productivity rates depend on a variety of factors which includes …

A level of training
B motivation of employees
C environmental factors
D all of the above

The correct answer is D, all of the above.
Productivity is multidimensional, affected by training, motivation and environment.

Question

The cost price of a product depends on …

A the sales volume of the product
B the amount customers are prepared to pay
C both fixed and variable costs
D the efficiency of the sales force

The correct answer is C, both fixed and variable costs.
Production costs combine these two fundamental expense types.

Question

Power based on the ability to influence others because of the superior knowledge is known as … power

A personal
B position
C legal
D expert

The correct answer is D, expert.
Expert power comes from specialized knowledge and skills.

Question

Market conditions refer to …

A a business doing the same business as others
B selling and buying
C the number of customers
D the level of competition in the same business or industry

The correct answer is D, the level of competition in the same business or industry.
Market conditions primarily describe competitive dynamics.

Question

It is true that habits are an addition and therefore …

A cannot accepted
B can be changed
C cannot be changed
D do not determine our effectiveness

The correct answer is B, can be changed.
Habits are learned behaviors that can be modified through conscious effort and repetition.

Question

Marketing planning is the ongoing process of …

A identifying the target market
B where buyer and seller meet
C managing the marketing department
D fixing product and service prices

The correct answer is A, identifying the target market.
Effective marketing begins with understanding and defining the specific audience for products or services.

Question

Which of these is not regarded as customers’ rights?

A Right to safety
B Right to know
C Right to be heard
D Right to strike without permission

The correct answer is D, Right to strike without permission.
While consumers have protected rights, striking is a labor concept unrelated to customer protections.

Question

The aim of a flat organisational structure is to …

A control, rule and regulate techniques in defined manner
B combine all departments in an organisational structure
C soften the hierarchy of authority
D divide departments into top, middle and lower structure

The correct answer is C, soften the hierarchy of authority.
Flat structures reduce management layers to promote faster communication and decision-making.

Question

Job identification refers to …

A lists of important duties or functions of a specific job
B special work circumstances
C the job title, job status and date on which the job description was compiled
D authority and duties are spelled out

The correct answer is C, the job title, job status and date on which the job description was compiled.
Job identification formally documents the basic information about a position.

Question

Trade unions strives to promote …

A pay workers a salary and pension
B the social, economic and political interests of employees
C economic, educational and housing benefits
D strikes and increase workers holidays

The correct answer is B, the social, economic and political interests of employees.
Unions advocate for comprehensive worker welfare beyond just wages and benefits.

Question

The … budget is a network of separate budgets in a business that are interdependent.

A sales
B master
C cash
D cash flow

The correct answer is B, master.
The master budget consolidates all departmental budgets into a comprehensive financial plan.

Question

Economies of scale refer to …

A a drop in the average cost per unit when a large volume is produced
B putting economics on a scale
C the cost doing business with big companies using a scale
D the production of goods and services with a measuring scale

The correct answer is A, a drop in the average cost per unit when a large volume is produced.
This economic principle describes cost advantages from increased production scale.

Question

Fixed order quantity is …

A event triggered
B price triggered
C order triggered
D fixed products and services

The correct answer is A, event triggered.
This inventory system reorders a set quantity when stock reaches a predetermined level.

Question

The most important assets of South Africa are …

A Parliament and President Ramaphosa
B the government and SARS
C the people of South Africa
D natural resources, land and buildings

The correct answer is C, the people of South Africa.
Human capital represents the nation’s most valuable resource for development and growth.

Question

Ethics refers to …

A a set of moral principles or values held by an individual or group
B management’s skills
C authority to do the right thing
D leadership

The correct answer is A, a set of moral principles or values held by an individual or group.
Ethics represents the fundamental moral guidelines that govern decisions and behavior in personal and professional contexts.

Question

… provides grants for people who were employed but now are unemployed.

A Budget
B Department of Social Development
C Unemployment Insurance Fund
D Pension

The correct answer is C, Unemployment Insurance Fund.
The UIF offers temporary financial assistance to workers who have lost their jobs through no fault of their own.

Question

Power based on formal authority is called …

A legal power
B performance power
C expert power
D position power

The correct answer is D, position power.
This type of authority stems from an individual’s formal role or rank within an organizational hierarchy.

Question

The single most important day to day factor business has to contend with is …

A government
B competitors
C customers
D suppliers

The correct answer is C, customers.
Customer needs, preferences and satisfaction ultimately drive all business operations and decision-making.

Question

The most important assets of a business are …

A raw materials
B finished goods and services
C people
D buildings and equipment

The correct answer is C, people.
While physical assets are valuable, human capital – employees’ skills, knowledge and creativity – constitutes the most critical resource for organizational success.

Question

The seven habits of effective personal management does not include …

A proactivity
B prioritisation
C dynamics
D synergy

The correct answer is C, dynamics.
Stephen Covey’s 7 Habits framework includes proactivity, prioritization and synergy, but not dynamics as a distinct habit.

Question

Within a group, the following individuals may be identified:

A Dominator, avoider, degrader and shy person
B Dominator, avoider, degrader and expert
C Dominator, avoider, leader and expert
D Dominator, manager, degrader and avoider

The correct answer is A, Dominator, avoider, degrader and shy person.
These represent common behavioral archetypes observed in group dynamics and interactions.

Question

Leadership is the ability of an individual to …

A doing what he/she already knows
B do things right
C obtain the support and action of people to achieve a common goal
D give orders and control

The correct answer is D give orders and control . This traditional view of leadership emphasizes the formal power structure where leaders primarily direct and control team members. Directives establish clear expectations and task assignments Control mechanisms ensure compliance with organizational standards

Question

… requires a clear understanding and commitment to group goals which should involve the workers jointly determining these goals.

A Trade Union
B Team
C Management
D Employers

The correct answer is B, Team.
Effective teamwork depends on collective goal-setting and shared understanding among all members.

Question

A manager needs the following skills:

A Planning, organising and technical skills
B Technical, human and conceptual skills
C Conceptual, business and control skills
D Technical, human and ethical skills

The correct answer is B, Technical, human and conceptual skills.
These three skill sets represent the essential competencies required for effective management at all levels.

Question

Which of the following is not a core function of a manager?

A Planning
B Judging
C Organising
D Controlling

The correct answer is B, Judging.
While judgment is important, the four core management functions are planning, organizing, leading and controlling.