MNB1601
EXAM PACK
,MNB1601 - BUSINESS MANAGEMENT
2025 EXAMM REVIEW QUESTIONS AND EXPLAINED ANSWERS
Section A: Purchasing and supply, operations management, quality and financial
management
Questions 1–30
Question 1. Purchasing cycle documentation
Which documents can be used during the final stage of the purchasing cycle to
complete and close an order?
a. Requisition b. Delivery note c. Proof of receipt d. Order form
Correct answer: b and d — Delivery note and order form.
Explanation: A delivery note accompanies goods supplied by a vendor and helps the
buyer verify what has been delivered. The order form records the order placed with the
supplier and provides a reference against which the delivery can be checked. Together,
these documents support the completion and closure of a purchasing transaction.
A requisition is an internal request to purchase goods or services, while proof of receipt
confirms that the goods have arrived. These documents serve related but distinct
purposes in the purchasing process.
Question 2. Classification of a banking service
First National Bank (FNB), a major South African bank known for its digital banking
services, falls into which operational service category?
a. Combination service b. Professional service c. Service shop d. Mass service
Correct answer: c — Service shop.
,Explanation: A service shop provides services through a combination of customer
contact, professional judgement, and standardised processes. Banks offer routine
transactions, such as balance enquiries, alongside more customised services, such as
business financing, investment advice and loan assessments.
A mass service generally handles large volumes of customers using relatively
standardised procedures and limited individual customisation. A professional service
involves a higher degree of specialist expertise and individual attention.
Question 3. Quality planning and control
Quality planning and control involve six stages. Which activity is performed third?
a. Establishing standards for every quality characteristic b. Identifying the relevant
quality characteristics c. Measuring the quality characteristics d. Comparing quality
results against standards and taking corrective action
Correct answer: a — Establishing standards for every quality characteristic.
Explanation: Quality management begins by identifying the characteristics that matter to
customers and the organisation. Appropriate standards must then be established so
that acceptable performance can be defined and measured.
The question's prescribed sequence places the establishment of quality standards at
stage three. Once standards have been set, actual performance can be measured and
compared with those standards, and corrective measures can be implemented where
necessary.
Question 4. Costs of granting credit
Paul operates a specialist sporting-goods store selling equipment for activities such as
paragliding and wakeboarding. He introduces a credit facility, subject to approval, to
encourage customers to spend more. Which cost of providing credit should he
consider?
, a. Loss of interest b. Insurance expenses c. Damage to customer goodwill d. Reduced
flexibility
Correct answer: a — Loss of interest.
Explanation: When a business grants credit, it may delay receiving money that could
otherwise have been used or invested. This creates an opportunity cost because the
business gives up the possibility of earning interest or obtaining an immediate return on
those funds.
Credit also creates other potential costs, including administration, bad debts and
collection expenses. However, the supplied question identifies loss of interest as the
expected answer.
Question 5. Financial leasing
Kate owns a bakery and leases essential equipment, including ovens and refrigerators,
from EasyBake. Her regular lease payments are calculated to recover the asset's value
plus interest over a period linked to its useful life. Which leasing arrangement is this?
a. Operating lease b. Direct financial lease c. Sale-and-leaseback agreement d.
Lifespan lease
Correct answer: b — Direct financial lease.
Explanation: Under a direct financial lease, the lessor provides the asset to the lessee
and recovers the investment through lease payments, including a financing return. The
payment structure is designed to recover the asset's cost and the applicable interest
over the lease term.
An operating lease is generally associated with a shorter commitment relative to the
asset's useful life, with the lessor retaining a greater share of the asset's residual-value
risk. In a sale-and-leaseback arrangement, an organisation sells an asset and then
leases it back.
EXAM PACK
,MNB1601 - BUSINESS MANAGEMENT
2025 EXAMM REVIEW QUESTIONS AND EXPLAINED ANSWERS
Section A: Purchasing and supply, operations management, quality and financial
management
Questions 1–30
Question 1. Purchasing cycle documentation
Which documents can be used during the final stage of the purchasing cycle to
complete and close an order?
a. Requisition b. Delivery note c. Proof of receipt d. Order form
Correct answer: b and d — Delivery note and order form.
Explanation: A delivery note accompanies goods supplied by a vendor and helps the
buyer verify what has been delivered. The order form records the order placed with the
supplier and provides a reference against which the delivery can be checked. Together,
these documents support the completion and closure of a purchasing transaction.
A requisition is an internal request to purchase goods or services, while proof of receipt
confirms that the goods have arrived. These documents serve related but distinct
purposes in the purchasing process.
Question 2. Classification of a banking service
First National Bank (FNB), a major South African bank known for its digital banking
services, falls into which operational service category?
a. Combination service b. Professional service c. Service shop d. Mass service
Correct answer: c — Service shop.
,Explanation: A service shop provides services through a combination of customer
contact, professional judgement, and standardised processes. Banks offer routine
transactions, such as balance enquiries, alongside more customised services, such as
business financing, investment advice and loan assessments.
A mass service generally handles large volumes of customers using relatively
standardised procedures and limited individual customisation. A professional service
involves a higher degree of specialist expertise and individual attention.
Question 3. Quality planning and control
Quality planning and control involve six stages. Which activity is performed third?
a. Establishing standards for every quality characteristic b. Identifying the relevant
quality characteristics c. Measuring the quality characteristics d. Comparing quality
results against standards and taking corrective action
Correct answer: a — Establishing standards for every quality characteristic.
Explanation: Quality management begins by identifying the characteristics that matter to
customers and the organisation. Appropriate standards must then be established so
that acceptable performance can be defined and measured.
The question's prescribed sequence places the establishment of quality standards at
stage three. Once standards have been set, actual performance can be measured and
compared with those standards, and corrective measures can be implemented where
necessary.
Question 4. Costs of granting credit
Paul operates a specialist sporting-goods store selling equipment for activities such as
paragliding and wakeboarding. He introduces a credit facility, subject to approval, to
encourage customers to spend more. Which cost of providing credit should he
consider?
, a. Loss of interest b. Insurance expenses c. Damage to customer goodwill d. Reduced
flexibility
Correct answer: a — Loss of interest.
Explanation: When a business grants credit, it may delay receiving money that could
otherwise have been used or invested. This creates an opportunity cost because the
business gives up the possibility of earning interest or obtaining an immediate return on
those funds.
Credit also creates other potential costs, including administration, bad debts and
collection expenses. However, the supplied question identifies loss of interest as the
expected answer.
Question 5. Financial leasing
Kate owns a bakery and leases essential equipment, including ovens and refrigerators,
from EasyBake. Her regular lease payments are calculated to recover the asset's value
plus interest over a period linked to its useful life. Which leasing arrangement is this?
a. Operating lease b. Direct financial lease c. Sale-and-leaseback agreement d.
Lifespan lease
Correct answer: b — Direct financial lease.
Explanation: Under a direct financial lease, the lessor provides the asset to the lessee
and recovers the investment through lease payments, including a financing return. The
payment structure is designed to recover the asset's cost and the applicable interest
over the lease term.
An operating lease is generally associated with a shorter commitment relative to the
asset's useful life, with the lessor retaining a greater share of the asset's residual-value
risk. In a sale-and-leaseback arrangement, an organisation sells an asset and then
leases it back.
