Third Term Business Studies Examination for JSS 2

Examination on Business Studies
Class: JSS 2
Term: Third Term
Time: 1 hour
Total Marks: 70

SECTION A: OBJECTIVES (40 Marks)
Instruction: Answer all questions.

1. Which of the following is a document issued before a policy is finalized? (a) Insurance Certificate (b) Cover Note (c) Claim Form (d) Policy Note
2. The imprest system is primarily associated with the: (a) Pension Scheme (b) Health Insurance Scheme (c) Petty Cash Book (d) Export Credit Insurance
3. Which type of insurance protects against financial loss due to an employee’s dishonesty? (a) Agricultural Insurance (b) NHIS (c) Accident Insurance (d) Fidelity Guarantee
4. The process of replenishing the petty cash fund is known as: (a) Reimbursement (b) Contra Entry (c) Balancing (d) Retirement
5. A document that serves as proof of insurance coverage is the: (a) Cover Note (b) Claim Form (c) Insurance Certificate (d) Policy Note
6. The National Health Insurance Scheme (NHIS) is an example of a(n): (a) Fidelity Guarantee Scheme (b) Agricultural Insurance (c) Pension Scheme (d) Health Insurance Scheme
7. When preparing a three-column cash book, discount allowed is recorded on the: (a) Balance column (b) Debit side (c) Contra entry side (d) Credit side
8. The main purpose of insurance is to: (a) Increase business profit (b) Guarantee a specific return (c) Eliminate all risks (d) Transfer risk
9. All of the following are types of insurance policies EXCEPT: (a) Health Insurance (b) Accident Insurance (c) Export Credit Insurance (d) Pension Scheme
10. A ledger account showing a debit balance typically indicates: (a) A reduction in capital (b) An expense or asset (c) A loss (d) A liability or revenue
11. What is the primary function of a claim form in insurance? (a) To outline policy terms (b) To initiate the policy purchase (c) To provide proof of coverage (d) To request payment for a loss
12. The main item recorded in a single-column cash book is: (a) Discount Allowed (b) Cash Receipts and Payments (c) Petty Cash (d) Contra Entries
13. Which of the following is NOT a column typically found in a petty cash book? (a) Date (b) Amount Paid (c) Discount Received (d) Details
14. The process of transferring information from the cash book to the ledger is essential for: (a) Maintaining a complete set of accounts (b) Preparing the insurance certificate (c) Calculating the imprest amount (d) Balancing the petty cash book
15. A pension scheme is designed to provide: (a) Immediate medical cover (b) Financial security after retirement (c) Coverage for export transactions (d) Protection against crop failure
16. Which document confirms that an insurer has agreed to provide cover while the full policy is being prepared? (a) Policy Note (b) Claim Form (c) Insurance Certificate (d) Cover Note
17. The difference between a cash book and a petty cash book is that the cash book records: (a) All transactions including minor ones (b) Only credit transactions (c) Only major transactions (d) Primarily discount transactions
18. Which type of ledger contains accounts for all assets and liabilities of a business? (a) General Ledger (b) Nominal Ledger (c) Purchases Ledger (d) Sales Ledger
19. When a discount is received, it means the business has: (a) Paid more than the invoice amount (b) Received less than the invoice amount (c) Charged more than the invoice amount (d) Paid less than the invoice amount
20. The purpose of balancing a cash book is to: (a) Prepare a claim form (b) Determine the net cash position (c) Apply the imprest system (d) Record contra entries
21. A three-column cash book includes columns for: (a) Cash, Bank, and Discount (b) Cash, Bank, and Petty Cash (c) Cash, Discount Received, and Discount Allowed (d) Bank, Discount, and Cheque Number
22. The National Health Insurance Scheme (NHIS) provides ________ for beneficiaries. (a) Financial support for export (b) Retirement benefits (c) Medical services (d) Compensation for crop loss
23. Recording cash received from a debtor in the cash book and also in the ledger is an example of: (a) Balancing (b) Insurance policy (c) Discount allowed (d) A contra entry
24. What is the main advantage of the imprest system for petty cash? (a) It guarantees a profit (b) It simplifies record-keeping and control (c) It eliminates the need for a cash book (d) It allows unlimited spending
25. Which insurance policy protects against losses arising from natural disasters affecting crops? (a) Accident Insurance (b) Fidelity Guarantee (c) Export Credit Insurance (d) Agricultural Insurance
26. The term “ledger” in accounting refers to: (a) A collection of all accounts (b) A form for submitting claims (c) A book for recording daily transactions (d) A document for policy details
27. Which of the following is a benefit of insurance? (a) Guaranteed profit (b) Increased business expenses (c) Peace of mind (d) Higher taxes
28. The act of recording a payment in the cash book and then withdrawing cash from the bank for that payment is a ________ entry. (a) Contra (b) Discount (c) Balancing (d) Retirement
29. Which of the following is a characteristic of a ledger account? (a) It records only one type of transaction (b) It is used only for petty cash (c) It is always balanced daily (d) It shows all transactions for a specific account
30. A debit balance in a cash book typically signifies: (a) An excess of payments over receipts (b) A discount allowed (c) An excess of receipts over payments (d) A retirement of petty cash
31. The process of preparing a petty cash book involves recording ________ expenses. (a) Minor (b) All (c) Major (d) Large
32. When a business receives a discount, it is recorded on the ________ side of the cash book. (a) Balance (b) Contra (c) Debit (d) Credit
33. Which insurance document is issued by the insurer to the insured as confirmation of the insurance contract? (a) Policy Note (b) Claim Form (c) Cover Note (d) Insurance Certificate
34. The total value of cash and discounts recorded in a three-column cash book for a period is used for: (a) Applying the imprest system (b) Balancing the ledger accounts (c) Preparing a cover note (d) Determining the business’s net worth
35. Which of the following is a type of insurance policy? (a) Health Insurance Scheme (b) Cover Note (c) Pension Scheme (d) Export Credit Insurance
36. The total amount of petty cash available at the beginning of a period under the imprest system is called the: (a) Imprest amount (b) Discount allowed (c) Retirement amount (d) Balance carried down
37. A policy note is essentially a: (a) Request for a claim (b) Summary of policy benefits (c) Temporary insurance cover (d) Detailed insurance contract
38. When preparing a three-column cash book, discount received is recorded to: (a) Increase the amount received (b) Reduce the amount paid (c) Show a contra entry (d) Facilitate petty cash retirement
39. What does a credit balance in a ledger account typically represent? (a) A cash receipt (b) A discount received (c) A liability or revenue (d) An asset or expense
40. Which of the following is a benefit of the health insurance scheme? (a) Coverage for export risks (b) Financial assistance for medical expenses (c) Retirement income (d) Protection against theft

SECTION B: THEORY (30 Marks)
Instruction: Answer any THREE questions.

1. Answer the following questions:
(a) Define “Insurance Policy”. (2 marks)
(b) State two types of insurance policies mentioned in your studies. (4 marks)
(c) Explain two benefits of having an insurance policy. (4 marks)

2. Answer the following questions:
(a) What is a ledger? (2 marks)
(b) Briefly explain the preparation of a single-column cash book. (4 marks)
(c) Differentiate between discount received and discount allowed. (4 marks)

3. Answer the following questions:
(a) Define the “Imprest System” as it relates to petty cash. (3 marks)
(b) List three columns typically found in a three-column cash book. (3 marks)
(c) Explain the meaning of a debit balance and a credit balance in a cash book. (4 marks)

4. Answer the following questions:
(a) Identify three insurance documents discussed in class. (3 marks)
(b) What is the purpose of a claim form? (2 marks)
(c) Explain the concept of a “contra entry” in a cash book. (5 marks)

Objective Marking Scheme
Question 1 – ✅ (b) Cover Note
Question 2 – ✅ (c) Petty Cash Book
Question 3 – ✅ (d) Fidelity Guarantee
Question 4 – ✅ (a) Reimbursement
Question 5 – ✅ (c) Insurance Certificate
Question 6 – ✅ (d) Health Insurance Scheme
Question 7 – ✅ (b) Debit side
Question 8 – ✅ (d) Transfer risk
Question 9 – ✅ (a) Health Insurance
Question 10 – ✅ (b) An expense or asset
Question 11 – ✅ (d) To request payment for a loss
Question 12 – ✅ (b) Cash Receipts and Payments
Question 13 – ✅ (c) Discount Received
Question 14 – ✅ (a) Maintaining a complete set of accounts
Question 15 – ✅ (b) Financial security after retirement
Question 16 – ✅ (d) Cover Note
Question 17 – ✅ (c) Only major transactions
Question 18 – ✅ (a) General Ledger
Question 19 – ✅ (d) Paid less than the invoice amount
Question 20 – ✅ (b) Determine the net cash position
Question 21 – ✅ (a) Cash, Bank, and Discount
Question 22 – ✅ (c) Medical services
Question 23 – ✅ (a) Balancing
Question 24 – ✅ (b) It simplifies record-keeping and control
Question 25 – ✅ (d) Agricultural Insurance
Question 26 – ✅ (a) A collection of all accounts
Question 27 – ✅ (c) Peace of mind
Question 28 – ✅ (a) Contra
Question 29 – ✅ (d) It shows all transactions for a specific account
Question 30 – ✅ (c) An excess of receipts over payments
Question 31 – ✅ (a) Minor
Question 32 – ✅ (c) Debit
Question 33 – ✅ (d) Insurance Certificate
Question 34 – ✅ (b) Balancing the ledger accounts
Question 35 – ✅ (d) Export Credit Insurance
Question 36 – ✅ (a) Imprest amount
Question 37 – ✅ (c) Temporary insurance cover
Question 38 – ✅ (b) Reduce the amount paid
Question 39 – ✅ (c) A liability or revenue
Question 40 – ✅ (b) Financial assistance for medical expenses