Hi
Firstly you are not being a 'bit slow'...I think sometimes they word the questions to make you feel confused
What you need to think about is answering this in the context of the curriculum and assessment framework you are using witin your setting....EYFS?
Consider how these support the development of the systems that your setting uses to assess children's communication, language and literacy....observations? feedback from other reliable sources...parents? and the children themselves?
Think about how your setting supports the identification and referral of concerns to the appropriate agencies or other professionals.
Good luck..hope this helps a little!
x