Article No.

138

9609

Paper-2
(Topical Past Paper with Mark Schemes)
(2008-2018)

Features:
 All Variants
 Mark schemes included
 Questions order new to old
Editor:
Maham Kabani
(Green Hall)
Review Board:
o Khalid Malik o Shameel Khalid
Green Hall, LGS (1A1, JT Girls, JT Green Hall, LGS (Paragon), LGS (1A1),
Boys), LACAS (Burki, JT) BSS (ALJT), LGS (JT), BSS (ALGC, ALJT), The City
Roots (Millenium). School, BSS, (Newlands), LGS (14C).
o Kashif Aziz o Tayyab Elahi
Green Hall, BSS (Bahria Town), The Green Hall, Garrison, KIMS.
City School, Pak Turk). o Waqas Hassan
o Asif Iqbal Green Hall, LGS Paragon.
Green Hall, BTS & MUSAB. o Ahsan Naqvi
o Shahzad Khalid Green Hall, BSS (Bahria), SISA,NGS,
Green Hall UCL, MUSAB, Pak Turk. GCC, ALS.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior written permission of the Publisher.

Title Business A-Level Paper-2 Topical (Article# 138)

Published by Read & Write Publications.

Printed by Read & Write Publications.

Composing Department Sharjeel Khan, Salman Buksh, Hayat, Shahab, Waqas, M. Awais,

Zulfiqar Ali, Usama Farooq

Graphics Department Rashid Mehmood, Khalid Khursheed

Legal Advisor Mian Tariq Ahmad (Advocate Supreme Court)

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Edition: 2019

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Contents
UNIT 1: BUSINESS AND ITS ENVIRONMENT ................................................................................... 7
1.1: Enterprise 7
1.2: Business Structure 8
1.3: Size of Business 21
1.4: Business Objectives 24
1.5: Stakeholders in a Business 30
UNIT-2: PEOPLE IN ORGANISATIONS........................................................................................... 36
2.1: Management and leadership 36
2.2: Motivation 39
2.3: Human Resource Management 44
UNIT-3: MARKETING .................................................................................................................. 56
3.1: What is marketing? 56
3.2: Market Research 61
3.3: The marketing mix 67
UNIT-4: OPERATION AND PROJECT MANAGEMENT ..................................................................... 91
4.1: The Nature of Operation 91
4.2: Operations Planning 95
4.3: Inventory Management 102
UNIT-5: FINANCE AND ACCOUNTING ........................................................................................ 107
5.1: Sources of finance 107
5.2: Costs 115
5.3: Accounting fundamentals 135
5.4: Forecasting cash flows and managing working capital 150
DATA RESPONSE-EXTRACTS...................................................................................................... 156
O/N 08/P02/Q1 (Paperclips) 156
O/N 08/P02/Q2 (CC Cosmetics) 156
M/J 08/P02/Q1 (East Farm Wildlife Park) 157
M/J 08/P02/Q2 (Ganmor Cars) 158
O/N 09/P22/Q1 (Phonequip) 159
O/N 09/P22/Q2 (Pedro’s Fish (PF) 160
O/N 09/P21/Q1 (Mediquip) 160
O/N 09/P21/Q2 (Joe’s World) 161
M/J 09/P22/Q1 (Bob’s Band) 162
M/J 09/P22/Q2 (Cheapo Air) 162
M/J 09/P21/Q1 (Jane’s Book) 163
M/J 09/P22/Q2 (Cheapo Air) 163
O/N 10/P22/Q1 (Big Boxes) 164
O/N 10/P22/Q2 (Newtown Hospital) 165
O/N 10/P21/Q1 (Big Bags) 165
O/N 10/P21/Q2 (Newton College) 166
O/N 10/P23/Q1 (Big Bottles) 166
O/N 10/P23/Q2 (Newtown University) 167
M/J 10/P22/Q1 (Sassy Suits) 168
M/J 10/P22/Q2 (Sheep Stew) 168
M/J 10/P21/Q1 (Taylor’s Tables) 169
M/J 10/P21/Q2 (Fruity Surprises) 169
M/J 10/P23/Q1 (Classy Clocks) 170
M/J 10/P23/Q2 (Vegetable Soup) 170
O/N 11/P22/Q1 (Kidz) 171
O/N 11/P22/Q2 (Rex Cinema) 172
O/N 11/P21/Q1 (Now) 172
O/N 11/P21/Q2 (Newtown Arts Centre) 173
O/N 11/P23/Q1 (Suave) 173
O/N 11/P23/Q2 (The Dreambox Theatre) 174
M/J 11/P22/Q1 (Turbo Tractors (TT) 175
M/J 11/P22/Q2 (McQuarry (MQ) 176
M/J 11/P21/Q1 (Loader Lorries (LL)) 177
M/J 11/P21/Q2 (United Coal) 178
M/J 11/P23/Q1 (Quality Coaches (QC) 179
M/J 11/P23/Q2 (Eldorado Gold (EG)) 180
O/N 12/P22/Q1 (BizBank (BB)) 181
O/N 12/P22/Q2 (King Kites (KK)) 182
O/N 12/P21/Q1 (Tiger Skateboards (TS)) 182
O/N 12/P21/Q2 (Bestmove partnership (BM)) 183
O/N 12/P23/Q1 (Fastship (FS)) 184
O/N 12/P23/Q2 (Junior Games (JG)) 185
M/J 12/P22/Q1 (Bright Air Conditioning (BAC)) 185
M/J 12/P22/Q2 (Largetown Football Club (LFC)) 186
M/J 12/P21/Q1 (Advanced Control Systems (ACS)) 187
M/J 12/P21/Q2 (Eagle Golf Club (EGC)) 187
M/J 12/P23/Q1 (Turboprop (TP)) 188
M/J 12/P23/Q2 (Deucetown Sports Club (DSC)) 189
O/N 13/P22/Q1 (Fizzy Drinks (FD)) 189
O/N 13/P22/Q2 (School Sports Shops (SSS)) 190
O/N 13/P21/Q1 (Clare’s Clothes (CC)) 191
O/N 13/P21/Q2 (Freshly Frozen (FF)) 191
O/N 13/P23/Q1 (Charlie’s Chocolates (CC)) 192
O/N 13/P23/Q2 (George’s Gym (GG)) 193
M/J 13/P22/Q1 (Regal Restaurant (RR)) 193
M/J 13/P22/Q2 (Trendy Paints (TP)) 194
M/J 13/P21/Q1 (The Harbour Hotel (HH)) 194
M/J 13/P21/Q2 (Bright Glass (BG)) 195
M/J 13/P23/Q1 (Coffee Paradise (CP)) 196
M/J 13/P23/Q2 (Cando eCables (CeC)) 196
O/N 14/P22/Q1 (Best Bakery (BB)) 197
O/N 14/P22/Q2 (Helping The Children (HTC)) 198
O/N 14/P21/Q1 (Classic Cars (CC)) 198
O/N 14/P21/Q2 (Blooming Flowers (BF)) 199
O/N 14/P23/Q1 (Classic Clothes (CC)) 199
O/N 14/P23/Q2 (Fine Furniture (FF)) 200
M/J 14/P22/Q1 (Let’s Make Music (LM)) 201
M/J 14/P22/Q2 (Great Gifts (GG)) 201
M/J 14/P21/Q1 (Super View (SV)) 202
M/J 14/P21/Q2 (Top Quality Supermarkets (TQ)) 202
M/J 14/P23/Q1 (Pippa’s Shop (PS)) 203
M/J 14/P23/Q2 (Enterprise Energy (EE)) 204
O/N 15/P22/Q1 (Popular Presents (PP)) 205
O/N 15/P22/Q2 (Kitchen Quality Appliances (KQA)) 206
O/N 15/P21/Q1 (Pet Care (PC)) 206
O/N 15/P21/Q2 (Cooper Manufacturing (CM)) 207
O/N 15/P23/Q1 (Classic Cushions (CC)) 207
O/N 15/P23/Q2 (Wonderful Windows (WW)) 208
M/J 15/P22/Q1 (Easy Television (ET)) 209
M/J 15/P22/Q2 (Affordable Builders (AB)) 210
M/J 15/P21/Q1 (Best Books (BB)) 210
M/J 15/P21/Q2 (Tangerine Tablets (TT)) 211
M/J 15/P23/Q1 (Enterprise Electricals (EE)) 212
M/J 15/P23/Q2 (Frank’s Farm (FF)) 213
O/N 16/P22/Q1 (Pampered Pets (PP)) 214
O/N 16/P22/Q2 (Fire Fly Ebooks (FFE)) 214
O/N 16/P21/Q1 (Barbeque House (BH)) 215
O/N 16/P21/Q2 (Software Creations (SC)) 216
O/N 16/P23/Q1 (Exam Success (ES)) 217
O/N 16/P23/Q2 (Yondis Phones (YP)) 217
M/J 16/P22/Q1 (Scented Candles (SC)) 218
M/J 16/P22/Q2 (Mackintosh Shoes (MS)) 218
M/J 16/P21/Q1 (Peterson Manufacturing (PM)) 219
M/J 16/P21/Q2 (Prestige Jewellery (PJ)) 220
M/J 16/P23/Q1 (Sailing Shop (SS)) 220
M/J 16/P23/Q2 (Car Components (CC)) 221
March 16/P22/Q1 (Lovell’s Jewellery (LJ)) 222
March 16/P22/Q2 (Fruit Fusions (FF)) 223
O/N 17/P22/Q1 (Occasion Cards (OC)) 223
O/N 17/P22/Q2 (Nearly New (NN)) 224
O/N 17/P21/Q1 (Rugged Back Packs (RBP)) 225
O/N 17/P21/Q2 (Car Wash (CW)) 225
O/N 17/P23/Q1 (Jones Sticky Labels (JS)) 226
O/N 17/P23/Q2 (Perfik Plumbing (PP)) 226
M/J 17/P22/Q1 (Perfect Pizza (PP)) 227
M/J 17/P22/Q2 (Quality Leather (QL)) 228
M/J 17/P21/Q1 (Magical Mirrors (MM)) 228
M/J 17/P21/Q2 (Security Alarms (SA)) 229
M/J 17/P23/Q1 (Designer Clothing (DC)) 230
M/J 17/P23/Q2 (Budding Gardens (BG)) 230
Mar 17/P22/Q1 (Gourmet Ices (GI)) 231
Mar 17/P22/Q2 (Clean and Tidy (CT)) 232
M/J 18/P22/Q1 (Online Travel (OT)) 232
M/J 18/P22/Q2 (Umpire Umbrellas (UU)) 233
M/J 18/P21/Q1 (Clifford’s Supermarkets (CS)) 234
M/J 18/P21/Q2 (Veg Cans (VC)) 234
M/J 18/P23/Q1 (Delivery To You (DTY)) 235
M/J 18/P23/Q2 (Pencil Pushers (PP)) 236
March 18/P22/Q1 (Paul’s Clothes (PC)) 236
March 18/P22/Q2 (Luxury Carpets (LC)) 237
Business A-Level P-2 Topical 6 Unit 1: Business and its Environmental
Read & Write Publications

Topics
1.1 Enterprise

1.2 Business Structure

BUSINESS 1.3 Size of Business

AND ITS 1.4 Business Objectives

1.5 Stakeholders in a Business

A Level
Business
Topical Paper-2

3-C, Zahoor Elahi Road, Gulberg II, Lahore.

Unit 1: Business and its Environment

1. O/N 17/P21/Q2/a(ii) Data Response - Car Wash (CW) - See Page 225
(a) (i) Briefly explain the term ‘entrepreneur’ (line 2). [3]
Content
Someone who takes the financial risk of starting and managing a new venture. Qualities
may include in novation, self-motivation, multi-skilled, leadership, confidence, risk
taking.

Exemplar
An entrepreneur takes the risk of starting a business and makes the decisions, An
entrepreneur should be confident
Someone who makes decisions about the factors of production, takes risks and comes
up with creative ideas.
2. M/J 16/P23/Q1/a(ii) Data Response - Sailing Shop (SS) - See Page 220
(a) (i) Briefly explain the term 'business enterprise’ (line 13). [3]
` NB Business enterprise can be explained as an organisation OR as a skill/factor of
production. Examples of both are rewardable.

3. O/N 14/P21/Q1/a(ii) Data Response - Classic Cars (CC) - See Page 198
(a) Explain the following terms:
(i) Triple bottom line (line 22). [3]
The TBL is concerned with the idea that a business should be concerned with making
a profit (economic), being fair to its people and society (social) and to have sustainable
policies (environmental). Part of a corporate social responsibility strategy.
Advantages – in recruitment, in image, in productivity and in profits.

4. O/N 13/P22/Q2/a(ii) Data Response - (School Sports Shops (SSS) - See Page 190
(a) Explain the following terms:
(i) Entrepreneurs. [3]
Content:
People who take risks to start up new businesses. They usually do so in order to take
the reward from the enterprise (profit). Usually have an idea and launch it in the market
place. They are good at identifying gaps/new opportunities. Example useful.

5. O/N 13/P22/Q2/c Data Response - (School Sports Shops (SSS) - See Page 190
(a) Analyse the advantages to SSS of being a social enterprise. [8]
Context likely to come from:
 A school-based business with any profit re-invested back into the school so students/pupils will
benefit (social aspect of triple bottom line)
 Encouraging entrepreneurship with students running their own businesses may have long term
benefits if students continue being entrepreneurs after they leave education (social and
economic)
 Will give the business more chance of success (students, teachers, parents more likely to
purchase from SSS).
Advantages:
 Increased chance of success
 Giving back by reinvesting in school
 Reputation, image may lead to more sales.
Analysis from developing the issues
6. O/N 12/P22/Q1/a(i) Data Response - For BizBank (BB) - See Page 181
BizBank (BB)
(a) Explain the following terms:
(i) Social enterprise [3]
Business A-Level P-2 Topical 8 Unit 1: Business and its Environmental
Read & Write Publications

Content: A business with mainly social objectives that reinvests most of its profits into
benefiting society rather than maximising returns to owners.

1.2: Business Structure

1. M/J 18/P22/Q1/a(i) Data Response - Online Travel (OT) - See Page 232
(a) (i) Define the term ‘private limited company’ (line 1). [2]
Content
A business where shares can be sold, but not to the general public. The owners benefit
from limited liability. Accounts must be produced but not necessarily published.

Knowledge Exemplar
A private limited company has
shareholders but does not sell on the
stock exchange
It has limited liability and but cannot
sell shares to the public

2. M/J 18/P21/Q2(a)(ii) Data Response - Veg Cans (VC) - See Page 234
(a) (i) Briefly explain the term ‘public limited company’ (line 1) [3]
Content
A public limited company has shareholders who can purchase shares through the stock
exchange. It also has limited liability, continuity and a separate legal identify.

3. M/J 18/P23/Q1/a(i) Data Response - Delivery To You (DTY) - See Page 235
(a) (i) Define the term ‘tertiary sector’ (line 1). [2]
Content
Made up of businesses which sell services to consumers.

4. Mar 18/P22/Q1(d) Data Response - Paul’s Clothes (PC) - See Page 236
(a) Evaluate Paul’s decision to set up PC as a sole trader. [11]
 Paul gets to make his own decisions –he has been through survival and now focusing on
maximizing profits/sales. Gets to decide what he wants to do with the business e.g., opened
up the second shop, investing in the new stock control system
 Paul keeps the profits to himself and he has been pleased with the level of profit made.
Rewards for his investment/entrepreneurial skills.
 Unlimited liability = higher risk especially if economy slowing down and considering Paul’s
market, cash flow slowing down and so if the business fails Paul is liable.
 Unlimited liability – heightened risk as Paul financed PC with mortgage on his home
 Loss of income for Paul as revenue expected to slow for at least the next 6 months. This
will affect his livelihood and his standard of living.
 More susceptible to competition/changes in the economy.

5. Mar 18/P22/Q2(a)(ii) Data Response - Luxury Carpets (LC) - See Page 237
(a) (i) Briefly explain the term ‘public limited company’ (line 1). [3]
Rationale
Example or some other way of showing good understanding, such as:
 Limited liability
 Continuity
 Separate legal identity
 Corporation tax must be paid (not income tax
 Accounts need to be published
 Run by a Board of Directors
 Dividends may be paid
 Legal formalities (i.e. Articles, Memorandum etc.)
Business A-Level P-2 Topical 9 Unit 1: Business and its Environmental
Read & Write Publications

6. O/N 17/P22/Q1/d Data Response - Occasion Cards (OC) - See Page 223
(a) Evaluate the owners’ decision to change the legal structure of OC to a public limited
company. [11]
Answers could include:
Benefits
 OC could access more capital which may allow OC to expand further and use more
traditional marketing methods
 OC has started to see increased noncurrent liabilities – by increasing the equity this
may be reversed
 Owners may become wealthy from selling their shares
Drawbacks
 OC might lose the family atmosphere, reducing the workers motivation
 OC will need to publish their financial information if they become a plc which may give
competitors an advantage
 Owners may lose their control of OC
 Owners will need to share profits

7. O/N 17/P22/Q2/a(ii) Data Response - Nearly New (NN) - See Page 224
Nearly New (NN)
(a) (i) Briefly explain the term ‘sole trader’. [3]
Exemplar
Owned by one person who has unlimited liability
and takes of the profit for themselves.
A single owner with no shareholders and
accounts do not need to be published.
A sole trader has unlimited liability and no
continuity. It is owned by one person.

8. O/N 17/P21/Q2/a(i) Data Response - Car Wash (CW) - See Page 225
(a) (i) Define the term ‘franchise’. (line 1). [2]

Exemplar
A business that pays a licence fee/royalties to use
the logo and trading systems of an existing business

9. O/N 17/P23/Q1/a(i) Data Response - Jones Sticky Labels (JS) - See Page 226
(a) (i) Define the term ‘industrial market’. [2]
A correct definition should cover both of the following:
 An explanation of market(s) – sales, trade etc..
 An explanation of industrial – to another business, used in the production process,
purchased to change or resale
When a business sells (1) to another business (1)

10. M/J 17/P22/Q1/d Data Response - (Perfect Pizza (PP) - See Page 227
(a) Evaluate whether Paul should enter into a franchise agreement with PP. [11]
Context/content:
Advantages
 less risk to Paul as he benefits from the expertise and reputation of PP brand
 Assistance from PP so Paul makes less mistakes in his business decisions such as the
policies for diversity and equality;
 Access to local marketing and the PP website will help generate sales;

Disadvantages
 Up-front costs to purchase the franchise ($40 000);
 The royalty fee of 5% may be a drain on his cash flow
 Clash of ideas as Paul will have to follow the criteria set out in his franchise agreement
– this may limit his freedom to make decisions.