Form 2 Business Studies questions and answers model test paper 1

a)Vertical and Horizontal line of Communication
-Vertical communication is passing information between a senior and a Junior in the same organization whereas horizontal communication is takes place between/among
people of the same level in an organization
b)Over insurance and double insurance.
-Over insurance is where on e insures his/ her property at a value higher thsn the actual value while double insurance is where one insures in two or more insurance companies under the same risk
c)Hire purchase and deferred payment
-Hire purchase is where one buys goods, makes a down payment and the remaining amount is paid in equal monthly instalments whereas deferred payment is where one buys goods and pays for them at a later
date either in lump sum or in instalments
d)A share and a debenture
-A share is a unit of capital whereas a debenture is a loan advanced to a company by the public