2013 HSC -Business Studies - Multiple Choice Questions

1 Which business function transforms raw materials and resources into finished goods or
products?

(A) Finance
(B) Human resources
(C) Marketing
(D) Operations

2 An overseas factory sells 200 000 teddy bears a year to toy stores across Australia.
What type of market is the overseas factory targeting?

(A) Consumer
(B) Intermediate
(C) Niche
(D) Resource

3 A business places a job vacancy advertisement on its website.
Which aspect of human resource management is this an example of?

(A) Development
(B) Maintenance
(C) Recruitment
(D) Selection

4 What does the expense ratio measure?

(A) Efficiency
(B) Growth
(C) Profitability
(D) Solvency

5 A company’s policy is to purchase from lowest-­cost suppliers regardless of their location.
What is this policy an example of?

(A) Global sourcing
(B) Global branding
(C) Economies of scale
(D) Research and development

6 Which of the following would immediately improve the working capital of a business?

(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash flow statement
(D) Repaying debt to creditors more quickly

7 Which of the following includes both an opportunity and a threat from a SWOT analysis?

(A) Low interest rates and high gearing
(B) Loyal employees and outdated technology
(C) Excellent management and strong competition
(D) Strong economic growth and increased tax rates

8 What does a critical path identify?

(A) The lowest cost path to complete all tasks in a project
(B) The highest cost path to complete all tasks in a project
(C) The longest time required to complete all tasks in a project
(D) The shortest time required to complete all tasks in a project

9 What is the most likely reason that a business would use price skimming?

(A) To encourage export sales
(B) To achieve market share quickly
(C) To gain high profits when demand is strong
(D) To reverse the decline stage of the product life cycle

10 Which of the following would improve the financial position of a business?

(A) Lower current ratio and lower accounts receivable turnover ratio
(B) Higher current ratio and lower accounts receivable turnover ratio
(C) Lower current ratio and higher accounts receivable turnover ratio
(D) Higher current ratio and higher accounts receivable turnover ratio

11 Sam is asked by a company to participate in a survey on home security. After a few
questions, she is asked if she would like to purchase a burglar alarm from the company.
What strategy is the company using?

(A) Sugging, which is illegal
(B) Sugging, which is legal but may be unethical
(C) Misleading and deceptive advertising, which is illegal
(D) Misleading and deceptive advertising, which is legal but may be unethical

12 A car company advertises its new luxury car as more exciting and fun to drive than its
competitors’ cars.
What strategy is the car company using?

(A) Opinion leader
(B) Personal selling
(C) Positioning
(D) Public relations

13 Full­time, permanent employees in Australia are generally entitled to four weeks annual
leave. 
What is the legal basis for this?

(A) Common law
(B) Industry awards
(C) National Employment Standards
(D) Workplace health and safety legislation

14 Which of the following includes two examples of transforming resources?

(A) Materials and energy
(B) Information and customers
(C) Task design and technology
(D) Human resources and facilities

15 Company XYZ allocates most of its marketing budget to advertising.
What approach has XYZ adopted?

(A) Selling approach
(B) Market approach
(C) Customer approach
(D) Production approach

16 Auditors have discovered that the value of legal fees paid has been included in the asset
value of a new warehouse purchased by a business.
What limitation of financial reports does this show?

(A) Capitalised expenses
(B) Debt repayments
(C) Normalised earnings
(D) Timing issues

17 Which of the following combinations would result in the lowest production cost per unit?

(A) Limited customer contact, limited product variety and low volume
(B) Limited customer contact, limited product variety and high volume
(C) Extensive customer contact, extensive product variety and low volume
(D) Extensive customer contact, extensive product variety and high volume

18 A business is experiencing increasing costs for its stock over time. It is seeking to
maximise its profit for the current financial period.
Which strategy should it adopt to value its inventory?

(A) First-­in-­first ­-out
(B) Just-­in-­case
(C) Just-­in-­time
(D) Last­-in-­first-­out

20 Which of the following is an example of developmental performance management?

(A) Reviewing the reward system for all employees
(B) Evaluating an online payroll system for employees
(C) Improving an individual employee’s leadership skills
(D) Collecting data to manage the human resources function more effectively